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HELOC and home equity loan rates Monday, January 12, 2026: Lower rates can give your budget some breathing room

Hal Bundrick, CFP® · Senior Writer

Laura Grace Tarpley · Lead Editor and Content Strategist, Mortgages Mon, January 12, 2026 at 7:00 PM GMT+8 4 min read

Current national average rates for home equity lines of credit and home equity loans are continuing to fall, making your second mortgage options even more affordable. Whatever your financial plans for 2026, a HELOC or HEL can give your budget some breathing room.

Learn how to use home equity to build wealth.

HELOC and home equity loan rates: Monday, January 12, 2026

According to Curinos data, the average HELOC rate is 7.25%, down 19 basis points from last month. The national average rate on a home equity loan is 7.56%, three basis points lower than one month ago.

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

HELOC or home equity loan: How to decide

Choosing between a HELOC and a HEL is not that complicated. A HELOC allows you to draw from your approved line of credit as you need it. A home equity loan gives you a lump sum.

With mortgage rates refusing to budge, homeowners with home equity and a favorable primary mortgage rate may feel the frustration of not being able to access that growing value in their home.

For those who are unwilling to give up their low home loan rate, a second mortgage in the form of a HELOC or HEL can be a workable solution.

The Federal Reserve estimates that homeowners have $36 trillion of equity locked within the walls of their homes. A second mortgage allows U.S. homeowners to tap into the record-setting equity they have accumulated.

Learn the differences between a HELOC and a home equity loan.

HELOC and home equity loan interest rates differ from mortgage rates

HELOC 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 a second mortgage product, such as a HELOC or home equity loan, 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 higher rate.

Again, because a home equity loan has a fixed rate, it's unlikely to have an introductory "teaser" rate.

Learn about home equity and how it works.

What the best HELOC lenders offer

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 an adjustable rate 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.

HELOC rates today: FAQs

What is a good interest rate on a HELOC right now?

Rates vary from one lender to the next. You may see rates from nearly 6% to as much as 18%. The national average for a HELOC is 7.25% and for a home equity loan is currently 7.56%. Those can serve as your benchmarks when shopping rates from second mortgage lenders.

Is it a good idea to get a HELOC or a home equity loan right now?

For homeowners with low primary mortgage rates and a chunk of equity in their house, it's probably one of the best times to get a HELOC or home equity loan. You don't give up that great mortgage rate, and you can use the cash drawn from your equity for things like home improvements, repairs, and upgrades.

What is the monthly payment on a $50,000 home equity line of credit?

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 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. HELOCs are best if you borrow and repay the balance within a much shorter period.

Is now a good time to take out a HELOC?

It can be a good time to get a HELOC, especially if you don’t want to lose the low rate on your first mortgage. Learn how the housing market could affect your decision.

How to use a HELOC to pay off debt (and when it makes sense)

If you’re burdened by loan payments, using a HELOC to pay off debt could save you big in interest. But it’s not for everyone. See if this option is for you.

HELOC vs. personal loan: Which should you choose?

HELOCs and personal loans are two strong financing options for home improvements or other large expenses. Learn which is the better fit for your situation.