{"id":22882,"date":"2026-01-15T03:04:54","date_gmt":"2026-01-15T03:04:54","guid":{"rendered":"https:\/\/budgetadirect.com\/?p=22882"},"modified":"2026-01-15T03:04:54","modified_gmt":"2026-01-15T03:04:54","slug":"heloc-rates-plunge-to-lowest-level-in-3-years","status":"publish","type":"post","link":"https:\/\/budgetadirect.com\/?p=22882","title":{"rendered":"HELOC Rates Plunge To Lowest Level In 3 Years"},"content":{"rendered":"
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\n Image: Getty Images; Illustration: Bankrate\n <\/p>\n<\/p><\/div>\n

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HELOC rates took a big dive in the latest week, dropping to three-year lows. The $30,000 home equity line of credit plummeted 78 basis points to 7.44%, as a major lender resumed its promotions, according to Bankrate\u2019s national survey of lenders. Meanwhile, the benchmark five-year $30,000 home equity loan rose one basis point to 7.98%.\u00a0<\/p>\n

Ted Rossman, senior industry analyst at Bankrate, puts the two-week HELOC roller coaster ride in context.<\/p>\n

\u201cIn general, it\u2019s a falling-rate environment for HELOCs and home equity loans, although we got a head fake last week when Bank of America ended a HELOC promotion, causing the HELOC average to jump more than half a percentage point,\u201d he says. \u201cA couple of years ago, the average HELOC rate was around 10%, while the average home equity loan charged about 9%. With rates perhaps headed closer to 7% by the end of the year, it\u2019s getting more attractive to use home equity for purposes such as home improvements and debt consolidation.\u201d<\/p>\n

\n\n\n\n\n\n\n\n\n
\u00a0<\/strong><\/td>\nCurrent<\/strong><\/td>\n4 weeks ago<\/strong><\/td>\nOne year ago<\/strong><\/td>\n52-week average<\/strong><\/td>\n52-week low<\/strong><\/td>\n<\/tr>\n
HELOC<\/td>\n7.44%<\/td>\n7.63%<\/td>\n8.28%<\/td>\n8.05%<\/td>\n7.44%<\/td>\n<\/tr>\n
5-year home equity loan\n<\/td>\n7.98%<\/td>\n7.99%<\/td>\n8.40%<\/td>\n8.23%<\/td>\n7.97%<\/td>\n<\/tr>\n
10-year home equity loan<\/td>\n8.16%<\/td>\n8.18%<\/td>\n8.54%<\/td>\n8.39%<\/td>\n8.16%<\/td>\n<\/tr>\n
15-year home equity loan<\/td>\n8.11%<\/td>\n8.13%<\/td>\n8.49%<\/td>\n8.31%<\/td>\n8.10%<\/td>\n<\/tr>\n
Note: The home equity rates in this survey assume a line or loan amount of $30,000.<\/em><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

What\u2019s driving home equity rates today?<\/h2>\n

Home equity rates are driven primarily by two factors \u2014 Federal Reserve policy and long-term inflation expectations. The Fed cut rates three times in 2025, sending HELOCs and home equity loans to their lowest levels in two years.<\/p>\n

More relief could be on the way in 2026. Rossman forecasts that home equity rates will continue edging lower if the Fed delivers the three quarter-point cuts currently projected for 2026.<\/p>\n

According to Rossman, the Fed is now more focused on labor market conditions than on inflation pressures. He believes the economy will stay in good shape this year, and that could increase the appetite for home equity borrowing. \u201cThat could actually apply a little downward pressure on rates, too,\u201d he says.<\/p>\n

Current home equity rates vs. rates on other types of credit<\/h2>\n

Because HELOCs and home equity loans use your home as collateral, their rates tend to be much less expensive \u2014 more akin to current\u00a0mortgage rates \u2014 than the interest charged on credit cards or personal loans, which aren\u2019t secured.<\/p>\n

\n\n\n\n\n\n\n\n\n
Credit type<\/strong><\/td>\nAverage rate<\/strong><\/td>\n<\/tr>\n
HELOC<\/td>\n7.44%<\/td>\n<\/tr>\n
Home equity loan<\/td>\n7.98%<\/td>\n<\/tr>\n
Credit card<\/td>\n19.64%<\/td>\n<\/tr>\n
Personal loan<\/td>\n12.19%<\/td>\n<\/tr>\n
\nSource: Bankrate national survey of lenders, Jan. <\/em>14<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

While average rates are useful to know, the individual\u00a0offer you receive\u00a0on a particular HELOC or new home equity loan reflects additional factors, like your creditworthiness and financials. Then there\u2019s the value of your home and the size of your ownership stake. Lenders generally limit all your home loans (including your mortgage) to a maximum of 80% to 85% of your home\u2019s worth.<\/p>\n

Keep in mind: Even if you\u2019re able to secure a favorable rate from a lender, home equity products are still relatively high-cost debt.<\/p>\n

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\n Unlock your home\u2019s value
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A fixed-rate home equity loan offers a lump-sum payout and a predictable repayment schedule. <\/p>\n

Explore offers<\/p><\/div>\n<\/div>\n

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\n Home equity trends\n <\/p>\n

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