Home Equity Loan Rates

A home equity loan is a second mortgage that allows you to borrow against the value of your home. Your home equity is calculated by subtracting how much you still owe on your mortgage from the appraised value of your home. See below for top uses of home equity and more information.

If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you, please contact us.

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

Loan Type Rate
Last update: 12/7/2018 8:15am
Home Equity 8.37%
Home Equity Line of Credit 5.56%
As of December 7, 2018, the average Home Equity Rate is 8.37%. Today's Average Home Equity Line of Credit (HELOC) is 5.56%.

A home equity loan is a type of second mortgage that lets you borrow money against the value of your home. 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.

The benefit of home equity loans is that the interest rates are usually lower than personal loans or credit cards because your house is the collateral.

“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.

What are top uses of home equity loans?

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:

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 Help

Home equity loans can seem complicated — especially when you’re just starting out. Take a look at the breakdown below to learn more about the variables we use to find you the best rates.

Give us an idea of the value of your home and we can help match you with the best home equity loans rates.


Provide us with the outstanding balance of your current mortgage so we can determine how much available equity you have in your home.


Tell us how much you want to borrow and we can help eliminate some of the guesswork involved with shopping for loans.


If you know your credit score, then be sure to provide that. Scores higher than 740 tend to be eligible for more and better opportunities when it comes to rates and loan amounts.


By entering your ZIP code, you might discover a more extensive selection of lenders and offers in your area.


Home Equity Loans Rates Terminology

Below are common terms we use when displaying rates.

Loan-to-value (LTV) is the percentage of value a bank will lend, using your home for collateral. Some lenders might say you’ll get up to 80% of your home’s value. That means the lender will give you 80% of what your home is worth. You also have to add your outstanding mortgage amount together with the HELOC and stay under 80% combined.

Some lenders might say a percentage and then specify an upper limit (like $350k). This means the bank will lend you the percentage of equity up to $350k.


When you pay back your loan, you will sometimes be given the option of fixed and variable rates. These refer to the rate of interest you’ll incur on your monthly payments. Fixed rates are just that: fixed. They will not alter during the life of your loan. Variable rates can fluctuate and are less predictable.


Some lenders offer an introductory rate on interest that is greatly reduced from the standard rate. This intro rate is usually for a set window of time and, upon reaching the end of this window, the interest rates will revert to the standard.


Prime rates are sometimes referred to as prime lending. These are the lowest commercial interest rates charged by a bank. These come into play when discussing variable mortgage rates.


The minimum credit score a lender will specify when determining your eligibility for a loan.


Sometimes shortened to “Req. Draw.” Some lenders might require you to draw at least a set amount, every time you want to get money. These are known as draw requirements – when you are required to draw from your equity.


Home Equity Loan FAQs

If you have more questions or are still unsure about home equity loans, take a look at the following frequently-asked questions.

HELOC stands for home equity line of credit. It is a loan based on the equity of the borrower’s home. Similar to how a credit card works, it allows you to take out money and pay it back down at your own pace up to a certain amount during the draw period.


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).


There are a variety of banks and lenders that offer HELOC loans. Our storefront can help you target the best opportunities and rates in your area.


Taking out a HELOC can be a good idea for a number of reasons. Maybe you need to fund a home improvement project or, maybe, you might even be trying to finance your education. It is also very flexible, especially if you don’t need all the money upfront. When a HELOC is not a good idea, however, is when you aren’t in a position to pay it back or cope with the interest.


The Draw Period Expiration of a HELOC refers to a time when you can no longer draw any remaining loan amounts. This draw period expiration will vary based on the lender and the payment period you have signed on for. Some can last as long as 20 years. At the end of the draw period the facility converts to a fixed repayment schedule, like a mortgage, where you make equal monthly payments.


Yes, so long as the HELOC is used for home-related investments (home improvements). Interest is capped at $750,000 in home loans (combined mortgage and HELOC/HE Loan). So if you had a $600,000 mortgage and $300,000 HELOC for home improvements on a house worth $1,200,000, you can only deduct the interest on the first $750,000 of the $900,000 you borrowed.

If you are using a HELOC for any other purpose other than the home, you cannot deduct interest under the new federal tax laws (as of 06/13/2018).


Quality Assurance

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Home equity tips

A home equity line of credit, or HELOC, has an adjustable rate of interest attached to paying it off, which means that your payments can fluctuate based on the federal funds rate. Think about a home loan if the idea of an adjustable rate unnerves you.

Know your loan-to-value, or LTV, ratio. This is how much you owe versus how much the home is worth. Many people are in trouble now because their homes dropped in value. You don't want to be stuck owing more than your house is worth.

Figure out what the loan is for and how long you'll need the money to help decide which kind of loan you need. Home equity loans are better for single lump sum expenses while home equity lines of credit, or HELOCs, are best for prolonged expenses, like college tuition.