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Find out more about home equity debt. Learn about the criteria used in surveys of rates above. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own website, where you can find additional information. Rates are subject to change without notice and may vary from branch to branch.
Today's Average Home Equity Rates
|Last update: 4/25/2019 9:20am|
Home equity loan rate: As of April 25, 2019, the average Home Equity Loan Rate is 7.74%.
Whether you own your home outright or have a standard first mortgage, home equity loans let you unlock the equity in your home in exchange for a second mortgage. Home equity loan rates are usually lower than personal loans or credit cards because your house is the collateral that secures the loan.
“A home equity loan offers the certainty of a fixed interest rate, the same payment every month, and a specific date when it will be paid off entirely.” Greg McBride, CFA, Bankrate’s chief financial analyst.
A home equity loan makes more sense for a large, upfront expense because it’s paid in a lump sum. If you have smaller expenses that will be spread out over several years, such as multiple home projects or college tuition payments, a home equity line of credit, or HELOC, may make more sense.
Top uses of home equity loans:
- Making substantial home improvements.
- Consolidating higher-interest debt, such as credit cards.
- Buying a vacation home or investment property.
- Paying for college tuition or expenses for yourself or a child.
- Starting a business.
What are the benefits of a home equity loan?
Home equity loans are best suited for people who know how much they need as they’re distributed in one lump sum. Additionally, they’re a good option for folks who want to use the funds for home improvements. The reason for this is that the interest you’ll pay is tax deductible if the money is used for renovation.
Conversely, if you use home equity loan funds for any other reason, such as paying off student debt or consolidating credit card bills, the interest you pay wouldn’t be eligible for a tax deduction under The Tax Cuts And Jobs Act.
Another benefit of home equity loans are the competitive interest rates, which are usually much lower than personal loans and cash-out refinances. Be sure to compare lenders’ rates for the best deal available.
Why is now a good time to use a home equity loan?
If you’ve been considering a home equity loan, now is the time to lock in your rate. Rates have been slowly moving higher, but they’re still lower than historical benchmarks. If you get a fixed-rate loan, which most home equity loans are, you will end up saving money in the long run if rates continue to climb, which they’re expected to.
Home Equity Loan FAQs
If you have more questions or are still unsure about home equity loans, here’s a list of questions and answers to help you better understand these products.
What is home equity?
Your home equity is calculated by subtracting how much you still owe on your mortgage from the appraised value of your home. Home equity is one way to measure your personal wealth.
What is a home equity loan?
A home equity loan based on the equity of the borrower's home. Unlike a HELOC, you receive all of the money upfront and then may equal monthly payments of principal and interest for the life of the loan (similar to a mortgage).
Where can I get a home equity loan?
A variety of banks and lenders offer home equity loans. Our storefront can help you target the best opportunities and rates in your area. It’s always a good idea to shop around with a few lenders to compare rates, fees and loan terms.
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