HELOC and home equity loan interest rates for Monday, January 12, 2026: Reduced rates may help ease your financial burden

Home Equity Loan and HELOC Rates Continue to Drop

National averages for home equity lines of credit (HELOCs) and home equity loans are on a downward trend, making it more cost-effective to consider a second mortgage. Whether you're planning for 2026 or looking to free up some cash, these options can provide valuable financial flexibility.

Latest HELOC and Home Equity Loan Rates (January 12, 2026)

Recent data from Curinos shows the average HELOC rate at 7.25%, a decrease of 19 basis points from the previous month. Home equity loans now average 7.56% nationally, down three basis points month-over-month.

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

Choosing Between a HELOC and a Home Equity Loan

Deciding on a HELOC or a home equity loan is straightforward: a HELOC offers a revolving credit line you can access as needed, while a home equity loan provides a single lump sum.

With mortgage rates remaining high, homeowners with substantial equity and a low-rate primary mortgage may feel limited in accessing their home's value. For those hesitant to refinance and lose a favorable mortgage rate, a second mortgage—either a HELOC or a home equity loan—can be a practical alternative.

The Federal Reserve estimates that U.S. homeowners collectively hold $36 trillion in home equity. A second mortgage enables you to tap into this record-breaking equity.

How HELOC and Home Equity Loan Rates Differ from Mortgage Rates

Interest rates for HELOCs are calculated differently than those for primary mortgages. Second mortgage rates typically combine an index rate—often the prime rate, which recently dropped to 6.75%—with a lender's margin. For example, with a 0.75% margin, your HELOC rate would be 7.50%.

Home equity loans, on the other hand, feature fixed interest rates, which may come with a different margin structure.

Lenders set their own pricing for second mortgages like HELOCs and home equity loans, so it's wise to compare offers. Your rate will be influenced by your credit score, existing debt, and the ratio of your credit line to your home's value.

Be aware that average HELOC rates often include introductory offers that last six to twelve months. After this period, your rate will adjust—usually to a higher, variable rate.

In contrast, home equity loans generally have fixed rates for the entire term, so teaser rates are uncommon.

Top Features Offered by Leading HELOC Lenders

The most competitive HELOC lenders provide low fees, fixed-rate options, and substantial credit limits. With a HELOC, you can access your home's equity as needed, repay what you use, and borrow again up to your limit.

Currently, FourLeaf Credit Union is advertising a 5.99% introductory HELOC rate for 12 months on lines up to $500,000. After the introductory period, the rate becomes adjustable, so it's important to consider both the initial and future rates when comparing lenders.

Finding the best home equity loan lenders may be simpler, as the fixed rate remains constant throughout the repayment period. You'll receive a lump sum, with no minimum draw requirements to worry about.

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

HELOC Rates Today: Frequently Asked Questions

What is a competitive HELOC interest rate right now?

Rates can range widely by lender, from about 6% up to 18%. The current national averages are 7.25% for HELOCs and 7.56% for home equity loans. Use these figures as a reference point when comparing offers.

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

If you have a low-rate primary mortgage and significant equity, now could be an excellent time to consider a HELOC or home equity loan. You can retain your favorable mortgage rate while using equity funds for renovations, repairs, or upgrades.

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

With a $50,000 HELOC at a 7.50% interest rate, your monthly payment during the 10-year draw period would be approximately $313. Keep in mind, HELOC rates are usually variable, so payments may rise during the 20-year repayment phase. While HELOCs can last up to 30 years, they are most advantageous when you borrow and repay funds over a shorter timeframe.