A price break for tapping a home’s value

Rates for home equity lines of credit and home equity loans are hovering over 7.5%. HELOCs and HELs are the most affordable in a long time, giving homeowners a price break when tapping their home’s value — without selling or refinancing into a higher mortgage rate.

Today’s national average monthly HELOC rate is 7.44%. The average rate on a home equity loan is 7.59%, according to data analytics company Curinos.

Both rates are based on applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio (CLTV) of 70%.

Homeowners have a record amount of value tied up in their houses — nearly $36 trillion at the end of the second quarter of 2025, according to the Federal Reserve. That’s the highest amount of home equity ever reported.

With mortgage rates lingering near 6%, homeowners are not likely to let go of their primary mortgage anytime soon, so selling the house may not be an option. Why give up your 5%, 4% — or even 3% mortgage?

Accessing some of the value locked into your house with a second mortgage can be an excellent alternative.

Home equity interest rates are different from primary mortgage rates. Second mortgage rates are based on an index rate plus a margin. That index is often the prime rate, which has just fallen to 6.75%. If a lender added 0.75% as a margin, the HELOC would have a rate of 7.50%.

A home equity loan may have a different margin, because it is a fixed-interest product.

Lenders have flexibility with pricing on second mortgage products, such as HELOCs or home equity loans, so it pays to shop around. Your rate will depend on your credit score, the amount of debt you carry, and the amount of your credit line compared to the value of your home.

And average national HELOC rates can include “introductory” rates that may only last for six months or one year. After that, your interest rate will become adjustable, likely beginning at a substantially higher rate.

Again, because a home equity loan has a fixed rate, it’s unlikely to have an introductory “teaser” rate.

MORE: Read our guide to the best home equity loan lenders.

You don’t have to give up your low-rate mortgage to access the equity in your home. Keep your primary mortgage and consider a home equity line of credit or home equity loan.

The best HELOC lenders offer low fees, a fixed-rate option, and generous credit lines. A HELOC allows you to easily use your home equity in any way and in any amount you choose, up to your credit line limit. Pull some out; pay it back. Repeat.

Today, FourLeaf Credit Union is offering a HELOC rate of 5.99% for 12 months on lines up to $500,000. That’s an introductory rate that will convert to a variable rate of 7.25% later. When shopping for lenders, be aware of both rates.

The best home equity loan lenders may be easier to find, because the fixed rate you earn will last the length of the repayment period. That means just one rate to focus on. And you’re getting a lump sum, so no draw minimums to consider.

And as always, compare fees and the fine print of repayment terms.

Rates vary significantly from one lender to the next, making it challenging to pinpoint a single, definitive number. The national average for a HELOC is 7.44% and for a home equity loan is currently 7.59%. Those can serve as your benchmarks when shopping rates from second mortgage lenders.

It’s likely a good idea to consider a HELOC or a home equity loan now. You don’t give up that great primary mortgage rate that you’re paying on your house, and you can use the cash drawn from your equity for things like home improvements, repairs, and upgrades. Anything, really.

If you withdraw the full $50,000 from a home equity line of credit and pay a 7.50% interest rate, your monthly payment during the 10-year draw period would be about $313. That sounds good, but remember, with a HELOC, that the rate is usually variable, so it changes periodically, and your payments will increase during the 20-year repayment period. A HELOC essentially becomes a 30-year loan.