If you’re thinking about taking out a HELOC to take care of your home renovation, but have decided to wait until inflation starts to subside, you may find that higher interest rates are what you’ve been waiting for. According to the CME Group’s FedWatch tool, the likelihood of the Federal Reserve raising rates grows with each meeting this year. The probability of an increase in June is only 1.5%. But if they skip two meetings, the probability will increase to more than 33% in September and, finally, to almost 43% in December.
More information: How the Fed’s rate decisions affect your money
Find out how HELOC and home equity loan interest rates work and what you can expect to pay.
HELOC and Home Equity Loan Rates: Saturday, May 23, 2026
The average HELOC rate is 7.21%according to the real estate analysis firm Curinos. HELOCs first hit a 2026 low of 7.19% in mid-January and then again in March. The national average home equity loan rate is 7.36%matching the 2026 low we first saw in mid-March.
Rates are based on applicants with a minimum credit score of 780 and a maximum combined loan-to-value (CLTV) ratio of less than 70%.
With mortgage rates remaining around 6%, homeowners with home equity and a low primary mortgage rate may feel the frustration of not being able to access that growing value in their home. A second mortgage in the form of a HELOC or HEL may be a viable solution.
What can a HELOC be used for? Seven ways homeowners use funds.
HELOC and Home Equity Loan Interest Rates: How They Work
Home equity interest rates are calculated differently than primary mortgage rates. Second mortgage rates are based on an index rate plus a margin. That rate is usually the prime rate, which is currently 6.75%. If a lender added 0.75% as 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.
Each lender has its own pricing methodology for second mortgage products, like a HELOC or a home equity loan, so it’s worth shopping around. Your rate will depend on your credit score, the amount of debt you have, and the size of your line of credit compared to the value of your home.
And average national HELOC rates may include “introductory” rates that may last only six months or a year. After that, your interest rate will be adjustable, probably starting with a higher rate.
Again, because a home equity loan has a fixed rate, it is unlikely to have a “promotional” introductory rate.
An introductory rate will be well below the market rate.
The best HELOC lenders offer low fees, a fixed-rate option, and generous lines of credit. A HELOC allows you to easily use your home equity in any way and in any amount you choose, up to the limit of your line of credit. Take out a little; return it. Repeat.
Look for a lender that offers a lower-than-market introductory rate. For example, FourLeaf Credit Union currently offers a HELOC APR of 5.99% for 12 months on lines of up to $500,000. That introductory rate will become a variable rate in one year. When shopping for lenders, keep both rates in mind.
Also, pay attention to the minimum withdrawal amount for a HELOC. The withdrawal is the amount of money a lender requires you to initially withdraw from your equity.
The best home equity loan lenders may be easier to find because the fixed rate you earn will last the entire repayment period. That means just one rate to focus on. And you will receive a lump sum, so there are no withdrawal minimums to consider.
And as always, compare rates and the fine print of payment terms.
More information: Find out how much you can borrow with a HELOC
HELOC Rates Today: Frequently Asked Questions
What is a good interest rate for a HELOC right now?
Rates vary from lender to lender and depending on where you live. You may see rates from almost 6% to as high as 18%. It really depends on your creditworthiness and how diligent you are as a buyer. The national average for an adjustable rate HELOC is 7.21% and for a fixed rate home equity loan is currently 7.36%. Try to match or beat those rates.
Is it a good idea to get a HELOC right now?
For homeowners with low primary mortgage rates and a significant amount of equity in their home, it is likely one of the best times to take out a HELOC, or home equity loan. You don’t give up that great mortgage rate and you can use the cash withdrawn from your equity for things like home improvements, repairs and upgrades. Or almost anything else.
What is the monthly payment on a $50,000 home equity line of credit?
If you take out the full $50,000 on a home line of credit and pay an interest rate of 7.25%, for example, your monthly payment over the 10-year HELOC draw period would be about $302. That sounds good, but remember that the rate is usually variable, so it changes periodically and your payments will increase over the 20-year repayment period. A HELOC essentially becomes a 30-year loan. HELOCs are better if you borrow and pay off the balance in a much shorter period.