home equity

Home equity rates for Jan. 5, 2012



I'm Greg McBride, senior financial analyst with Bankrate.com and here is your weekly look at home equity rates.

Rates on home equity loans and lines of credit moved in divergent directions this week. The average fixed rate home equity loan dropped to 6.74 percent while the average variable rate home equity line of credit inched higher to 5.52 percent.

Like mortgage rates, home equity rates have been fairly placid in recent months. Since late September, both the home equity loan and home equity line of credit have remained in a range of one-eighth of a percentage point. While the line of credit rate has moved higher over that period of time, the home equity loan is a tad lower.

That being said, line of credit rates are more than a full percentage point lower, on average, and with the Federal Reserve presumed to be on hold with interest rates for much of the next two years - perhaps longer - the home equity line of credit is poised to retain its relative interest rate advantage. Home equity lines also have the added convenience of permitting borrowers to access the money only when needed and offering the flexibility of interest-only payments in the initial years it is open.

For more information on home equity loans and home equity lines of credit, and to check home loan rates in your area, go to Bankrate.com.

I'm Greg McBride.



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