economy
Home equity loan and HELOC rates: Aug. 20, 2026
Both home equity loans and HELOCs give homeowners a way to borrow against equity accumulated through mortgage paydown or an outright home purchase. These loans use your property as collateral, which generally results in lower rates compared with unsecured borrowing options.
TL;DR
- Home equity loans and HELOCs are secured loans that use a home as collateral, typically resulting in lower interest rates than unsecured loans.
- A home equity loan provides a single lump sum payment, while a HELOC offers a revolving credit line for repeated borrowing.
- Borrowing against home equity can provide access to larger loan amounts and potentially reduce overall interest paid compared to personal loans.
- Risks include losing the home to foreclosure if payments are missed, and upfront fees typically range from 2% to 5% of the loan value.
- To qualify, borrowers generally need a solid credit score, manageable debt-to-income ratio, steady income, and at least 15-20% home equity.