economy
Home equity loan and HELOC rates: Aug. 26, 2026
Homeowners can access the value they’ve built in their property, whether through steady mortgage payments or an all-cash purchase, by taking out either a home equity loan or a home equity line of credit (HELOC). Since your house backs the debt, these loans often come with more favorable interest rates than unsecured borrowing. So what differentiates the two?
TL;DR
- A home equity loan provides a lump sum, while a HELOC offers a revolving credit line.
- Both loans are secured by the home, typically leading to lower interest rates than unsecured loans.
- National average rates on August 25, 2026, were 8.136% for a 10-year home equity loan, 8.665% for a 15-year loan, and 8.240% for a HELOC.
- Factors influencing your rate include credit score, debt-to-income ratio, loan amount, and property type.
- Borrowing against home equity carries risks, including the potential loss of the property if payments are defaulted on.
- Closing costs for these loans typically range from 2% to 5% of the borrowed amount.
- To qualify, homeowners generally need a solid credit score, manageable DTI, predictable income, and at least 15%-20% equity in their home.