| LOAN TYPE | AVERAGE RATE | AVERAGE RATE RANGE |
|---|---|---|
| 5-year home equity loan | 8.40% | 8.04% - 9.24% |
| 10-year home equity loan | 8.53% | 8.23% - 9.43% |
| 15-year home equity loan | 8.44% | 8.34% - 10.17% |
To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. The rates shown above are calculated using a loan or line amount of $30,000, with a FICO score of 700 and a combined loan-to-value ratio of 80 percent.
Note: The above APRs are current as of Apr. 16, 2025. The exact APR you might qualify for depends on your credit score and other factors, such as whether you're an existing customer or enroll in auto-payments.
Modest gains across the board for home equity loan rates this week: The average rate on the 10-year, $30,000 home equity loan rose one basis point to 8.53 percent and the 15-year $30,000 loan climbed two basis points to 8.44 percent, according to Bankrate’s survey of large lenders. The 5-year loan also rose two basis points, to 8.40 percent.
Unlike HELOCs, home equity loan interest rates are fixed. Once you close your loan, your rate will stay the same whether market rates rise or fall (unless you refinance). However, interest rates on new home equity loans do shift in response to economic conditions and influences, including Federal Reserve monetary policy.
At its latest policy-setting meeting on March 18-19, the Fed left its benchmark rate unchanged but noted that it is carefully watching to see if inflation and employment will be impacted by the Trump administration’s policies. The next Fed policy meeting is scheduled for May 6-7.
Greg McBride, CFA, Bankrate's chief financial analyst, forecasts that the Fed could cut rates three times in 2025, setting the stage for home equity loans to average 7.90 percent by the end of the year.
“Fixed-rate home equity loans will be lower, but the volatility in longer-term Treasury yields will temper the extent of declines seen in the average home equity loan rate,” McBride says.
Generally, a home equity loan is best when you’re certain of the total lump sum you need and exactly when and how you’ll spend the money. Renovations remain the most popular use of one. Among current homeowners, 55% see home improvements or repairs as a good reason to tap home equity, according to Bankrate’s Home Equity Insights Survey.
“It starts with what you are trying to accomplish, then I talk to clients about the benefits,” says Matt Vernon, head of consumer lending at Bank of America. “If it's debt consolidation, [the benefits are] a low interest rate, potential tax benefits and [increased] cash flow. If it's for home improvement, you have the potential to increase the value of your home and receive a tax benefit.”
Many lenders have fixed loan-to-value (LTV) ratio requirements for their home equity loans, meaning you'll need to have a certain amount of equity in your home to qualify. Lenders will also factor in your credit score and income when determining your rate and eligibility. Minimum requirements generally include a credit score of 620 or higher, a maximum loan-to-value ratio of 80 percent or 85 percent and a documented source of income.
When shopping for a home equity loan, look for a competitive interest rate, repayment terms that meet your needs and minimal fees. Loan details presented here are current as of the publication date, but definitely check the lenders’ websites to see if there is more recent information.
How to choose the best home equity loan for you:
Choosing the right lender is an important part of the home equity loan process. Start out with three lenders. Take the time to research them thoroughly, comparing their reputation, loan terms, rates and customer service. Not only will this streamline the borrowing process, but it will also help you secure the right home equity loan for your financial situation.Linda Bell, Senior Writer, Home Lending
The best home equity loan lenders offer a variety of repayment terms, low interest rates and few fees. Each lender will evaluate your eligibility differently, so shopping around can help you find the best offer. Your rate will depend on your credit score, income, home equity and more, with the lowest rates going to the most creditworthy borrowers.
| LOAN TYPE | LOAN AMOUNT | LOAN TERM | STARTING APR |
|---|---|---|---|
| $10,000–$250,000 | 10 to 20 years | 6.75% | |
| Up to $600,000 | 5 to 20 years | 6.99% | |
| $10,000–$300,000 $5,000 minimum | 5 to 20 years 5 to 15 years | 6.99% | |
| $5,000 minimum | 5 to 15 years | 7.31% | |
| $25,000–$750,000 ($1 million in CA) | Up to 30 years | 7.65% | |
| $10,000 minimum | 5 to 30 years | 7.74% | |
| $35,000–$300,000 | 10 to 30 years | 6.55% 1st lien | 7.85% 2nd lien | |
| $25,000–$400,000 | 5 to 20 years | 8.12% |
Note: The above APRs are current as of Apr. 3, 2025. The exact APR you might qualify for depends on your credit score and other factors, such as whether you're an existing customer or enroll in auto-payments.
To determine the best home equity loan rates, we surveyed over 30 home equity lenders. The top home equity loan rates listed account for the lowest advertised APR (annual percentage rate), based on a borrower with a credit score of 700 or higher and a combined loan-to-value (CLTV) ratio of 80 percent obtaining a 30-year home equity loan for $30,000.
Note that these lenders listed here are based solely on their offering the lowest APR, and are not necessarily the best overall home equity lenders Bankrate has scored. Learn more about Bankrate’s lender review methodology.
A home equity loan is a lump sum that you borrow against the equity you’ve built in your home. Like other installment loans, you receive all of the money upfront and then make equal monthly payments of principal and interest for the life of the loan (similar to a mortgage). Most lenders will let you borrow up to 80 percent to 85 percent of your home’s equity; that is, the value of your home minus the amount you still owe on the mortgage.
These loans have fixed interest rates and typical repayment periods between five and 30 years. Because your home serves as the collateral for a home equity loan, a lender can foreclose on it if you fail to make the payments.
Home equity loans are available at many banks, credit unions and online lenders. You can use these funds for a range of purposes, including debt consolidation, home improvement projects or higher education costs. The amount you can borrow depends on how much equity you have, your financial situation and other factors.
After reviewing your application and checking your credit, the lender will tell you how much you can borrow, your interest rate, your monthly payment, your loan term and any fees involved. Once you agree to the loan terms, the financial institution will disburse funds as one lump sum. You then repay the loan over time in fixed monthly payments.
Home equity is the stake you have in your property – the percentage of the home you own outright. Over time, you build up equity in your home as you make payments on your mortgage or your home’s value rises. To calculate your home equity (and how much you may be able to borrow), subtract your current mortgage balance from the appraised value of your home.
For (a simplified) example, say you owe $200,000 on a home worth $400,000. This means that you have 50 percent equity in your home. If your lender lets you take out up to 85 percent of your home’s value ($340,000), you could borrow $140,000 through a home equity loan. A home equity loan calculator (like Bankrate’s) can estimate how much you can borrow.
Because the proceeds from a home equity loan come in one lump sum, home equity loans are best suited for homeowners who have a set budget. They’re a good option for those who want to use the funds for home renovations – the interest can be tax deductible if the money is used for certain repairs, expansions or improvements. Conversely, if you use home equity loan funds for any reason aside from substantial home improvements, such as paying off student debt or consolidating credit card bills, the mortgage interest is not deductible.
Another benefit of home equity loans is that they have competitive interest rates, which are usually much lower than those of personal loans and cash-out refinances. Compare lenders’ rates for the best deal available.
However, if you need money quickly, a home equity loan may not be the way to go. It can take longer to receive the funds from a home equity loan than a personal loan. Additionally, you may be subject to expensive closing costs and a more drawn-out application process.
Lower interest rates than those of unsecured debt such as credit cards or personal loans.
High borrowing limits.
Fixed monthly payments.
Interest may be tax deductible.
Potentially expensive closing costs.
Risk of losing your home if you are unable to make the payment or end up underwater on your mortgage if the home value drops.
Longer application/funding timeline than that of personal loans.
A home equity loan may be a good option if you've been planning a large home renovation or if you need to consolidate debt and you spot a good rate. If you’ve been considering a home equity loan, now might be a good time to lock in your rate before they rise further.
Because mortgage rates have risen sharply since early 2022, home equity loans have grown more attractive as an alternative to a cash-out refinance.
A home equity loan is not the right choice for every borrower. Depending on what you need the money for, one of these options may be a better fit:
Home equity loans and home equity lines of credit (HELOCs) are both loans backed by the equity in your home. However, while a home equity loan has a fixed interest rate and disburses funds in a lump sum — just like a traditional mortgage — a HELOC allows you to make periodic draws up to a certain amount, like a credit card. You pay interest on the withdrawals at a variable rate. You can withdraw funds, repay them and then borrow again, for a number of years. After that, you can no longer tap the credit line, but must repay it all, over a period of time.
Generally speaking, if you're planning on doing multiple home improvement projects over an extended period of time, a HELOC may be the better option for you. If you're thinking about consolidating high-interest credit card debt or doing a short-term remodel that would require all of the funds upfront, a home equity loan may be the best option.
With a reverse mortgage, you receive an advance on your home equity that you don't have to repay until you leave the home. However, these often come with many fees, and variable interest accrues continuously on the money you receive. These are also only available to older homeowners (62 and up for a Home Equity Conversion Mortgage, the most popular reverse mortgage product, or 55 and up for some proprietary reverse mortgages).
Before you start applying for a home equity loan, here are some home equity resources to prepare you for the process:
What is home equity?
Discover what home equity means and how you can tap it to pay for home renovations or pay off debts, and how to get the best rates.
How to calculate your home equity
Follow these steps to calculate how much equity you have in your home and how to tap into it via a home equity loan or line of credit (HELOC).
HELOC and home equity loan requirements
Everything you need to know about HELOC and home equity loan requirements: credit scores, DTI ratios and more.
Where to get a home equity loan: finding the best lender for your needs
Your loan provider makes a difference in the terms, rates, even if you get the loan at all. Here's where to find the best home equity lender.
At Bankrate, our mission is to empower you to make smarter financial decisions. We’ve been comparing and surveying financial institutions for more than 40 years to help you find the right products for your situation. Our award-winning editorial team follows strict guidelines to ensure our content is not influenced by advertisers. Additionally, our content is thoroughly reported and vigorously edited to ensure accuracy.
Bankrate analyzes loans to compare interest rates, fees, accessibility, online tools, repayment terms and funding speed to help readers feel confident in their financial decisions. Our meticulous research done by loan experts identifies both advantages and disadvantages to the best lenders.
When shopping for a home equity loan, look for a competitive interest rate, repayment terms that meet your needs and minimal fees. Loan details presented here are current as of the publication date. Check the lenders’ websites to see if there is more recent information. The top lenders listed below are selected based on factors such as APR, loan amounts, fees, credit requirements and broad availability.
