HELOC and home equity loan rates as of January 22, 2026: Significant decreases are not anticipated in the near future

Current Trends in Home Equity Rates

Home equity interest rates are generally holding steady, ranging from 7.25% to 7.50%. With the upcoming Federal Reserve meeting, the likelihood of an imminent rate reduction is extremely low. Market forecasts suggest that any potential rate decrease may not occur until June, so HELOC and home equity loan rates are expected to remain stable for now.

HELOC and Home Equity Loan Rates as of January 22, 2026

Data from Curinos, a real estate analytics provider, shows that the average rate for a HELOC is 7.25%. Meanwhile, the national average for a home equity loan has dipped to 7.56%.

These averages assume applicants have a credit score of at least 780 and a combined loan-to-value ratio (CLTV) of 70% or less.

Choosing Between a HELOC and a Home Equity Loan

Deciding whether to use a HELOC or a home equity loan depends on your financial needs. A HELOC offers flexibility, letting you access funds as needed from your approved credit line. In contrast, a home equity loan provides a single lump sum upfront.

With refinance rates still around 6%, homeowners who have built up equity but hold a much lower primary mortgage rate may find it difficult to tap into their home’s value without sacrificing their favorable rate.

If you want to keep your low mortgage rate, taking out a second mortgage—either as a HELOC or a home equity loan—can be a practical alternative.

How Lenders Set HELOC and Home Equity Loan Rates

Interest rates for home equity products differ from those for primary mortgages. Second mortgage rates are typically calculated by adding a margin to an index rate, often the prime rate, which is currently 6.75%. For example, if a lender adds a 0.75% margin, the resulting HELOC rate would be 7.50% and would fluctuate over time.

Home equity loans, on the other hand, usually come with a fixed rate, and the margin may differ from that of a HELOC.

Lenders have considerable discretion when pricing second mortgage products like HELOCs or home equity loans. Your interest rate will be influenced by factors such as your credit score, your existing debt, and the ratio of your credit line to your home’s value.

It’s important to note that average HELOC rates may include introductory offers, which often last six to twelve months. After this period, the rate typically becomes variable and may increase significantly.

Since home equity loans have fixed rates, they generally do not feature introductory “teaser” rates.

Tips for Finding the Best Home Equity Rates

The top HELOC lenders typically offer competitive fees, options for fixed rates, and generous credit limits. HELOCs provide flexibility, allowing you to borrow and repay funds as needed, up to your approved limit.

Currently, FourLeaf Credit Union is advertising a 5.99% APR for the first 12 months on HELOCs up to $500,000. After the introductory period, the rate will adjust to a variable rate.

When it comes to home equity loan lenders, finding a good option may be easier since the fixed rate remains constant throughout the repayment term. You’ll receive a lump sum, and there are no minimum draw requirements to worry about.

Always review lender fees and carefully read the repayment terms before making a decision.

Frequently Asked Questions About HELOC and Home Equity Loan Rates

What is considered a competitive rate for a HELOC or home equity loan right now?

HELOC rates can vary widely between lenders, with offers ranging from about 6% up to 18%. The current national average is 7.25% for HELOCs and 7.56% for home equity loans. These averages can serve as a benchmark when comparing offers from different lenders.

Is now a good time to get a HELOC or home equity loan?

If you have a low-rate primary mortgage and substantial equity in your home, this could be an excellent time to consider a HELOC or home equity loan. You can keep your favorable mortgage rate while accessing funds for renovations, repairs, or any other financial needs.

How much would the monthly payment be on a $50,000 HELOC?

Withdrawing the full $50,000 from your HELOC at a 7.50% interest rate would result in a monthly payment of approximately $313 during the 10-year draw period. However, keep in mind that HELOC rates are usually variable, so your payment could increase over time, especially during the 20-year repayment phase. In total, a HELOC can function much like a 30-year loan, but it’s most advantageous if you can repay the balance sooner.