HELOC and home equity loan rates as of January 9, 2026: HELOCs reach a new record low

Current Trends in Home Equity Loan and HELOC Rates

Recently, the average rate for home equity lines of credit (HELOCs) has dropped to its lowest point in over a year. Home equity loan rates have also decreased slightly compared to last month.

• Learn how interest rates for HELOCs and home equity loans are set and what you might pay.

Latest HELOC and Home Equity Loan Rates – January 9, 2026

Data from Curinos shows that the average HELOC rate now stands at 7.25%, a decrease of 19 basis points from the previous month. The average rate for a home equity loan is 7.56%, down by three basis points.

These averages are calculated for borrowers with a credit score of at least 780 and a combined loan-to-value ratio (CLTV) below 70%.

According to the Federal Reserve, homeowners collectively held nearly $36 trillion in home equity by the end of Q2 2025—a record high.

Why Homeowners Are Holding Onto Their Mortgages

With mortgage rates still hovering in the low 6% range, many homeowners are reluctant to refinance or sell, especially if they have locked in rates of 5%, 4%, or even 3%. In these cases, cash-out refinancing is often not appealing.

Instead, tapping into home equity through a flexible HELOC or a lump-sum home equity loan can be a smart alternative.

More: See our top picks for home equity loan lenders.

How HELOC and Home Equity Loan Rates Are Set

Interest rates for home equity products are determined differently than those for primary mortgages. Second mortgages typically use an index rate—often the prime rate—plus a margin. For example, with the prime rate at 6.75% after the Federal Reserve’s most recent cut, a lender adding a 0.75% margin would offer a HELOC with a variable rate of 7.50%.

Home equity loans, which have fixed rates, may use a different margin structure.

Lenders have discretion in pricing these products, so your rate will depend on factors like your credit score, existing debt, and the ratio of your credit line to your home’s value. Comparing offers from several lenders can help you secure the best rate.

• Discover how fixed-rate HELOCs operate.

Home Equity Lenders Respond to Lower Prime Rates

After three Federal Reserve rate cuts in 2025, the prime rate has dropped to 6.75%. This has prompted lenders to adjust their home equity product rates accordingly.

For instance, FourLeaf Credit Union is currently advertising a 12-month introductory HELOC APR of 5.99% on lines up to $500,000, after which the rate becomes variable.

This trend shows that lenders are reducing both their adjustable and introductory rates in response to the Fed’s actions.

When evaluating lenders, consider not just the rates but also fees, repayment terms, and the minimum amount you must initially borrow (the “draw”).

Choosing from the best home equity loan lenders can be simpler, since fixed rates remain constant throughout the repayment period and there are no minimum draw requirements for lump-sum loans.

Frequently Asked Questions About HELOC and Home Equity Loan Rates

What Is a Competitive HELOC Rate Right Now?

HELOC rates can vary widely, ranging from 6% up to 18%, depending on your credit profile and how thoroughly you compare offers. The current national averages are 7.25% for HELOCs and 7.56% for home equity loans.

Is Now a Good Time to Get a HELOC or Home Equity Loan?

Interest rates declined throughout 2025 and are expected to continue falling. This makes it an opportune moment to consider a second mortgage. With a HELOC or home equity loan, you can use the funds for home renovations, repairs, or upgrades.

What Would the Monthly Payment Be on a $50,000 HELOC?

If you borrow $50,000 at a 7.50% interest rate, your monthly payment during the 10-year draw period would be around $313. Keep in mind, however, that HELOC rates are typically variable, so your payment may increase during the 20-year repayment phase. In total, a HELOC can function like a 30-year loan, but it’s most beneficial if you pay off the balance much sooner.