Current home equity loan and HELOC rates, Oct. 27, 2026

Home equity loans and home equity lines of credit, or HELOCs, allow borrowers to use the value they have built in their homes. Since these loans are secured by the property, lenders generally charge lower rates than they do for unsecured borrowing.

The main difference is how the money is delivered. A home equity loan provides a single upfront payment, while a HELOC offers a revolving credit line that can be used again and again. To help homeowners assess whether it is a good time to borrow, nationwide average rates from the Mortgage Research Center are listed below.

Fortune reviewed the most recent MRC data available as of Oct. 26. The figures reflect national averages for an owner-occupied single-family home with an 80% loan-to-value ratio, a $350,000 loan amount ($850,000 for non-conforming loans), and a 30- to 60-day rate lock. They assume a FICO score of 620 or above.

Your actual rate will vary based on your credit history, the amount of equity in your home, your debt-to-income ratio, the loan size and term you choose, and the kind of property used as collateral. If the home is worth less than the balance you owe, or if the loan is tied to a second home or investment property, the rate is likely to be higher than the averages shown here.

How home equity loans work

In essence, a home equity loan is secured borrowing.

After years of mortgage payments, and possibly improvements you have made, your home may have accumulated substantial equity. A home equity loan lets you borrow against part of that value.

Once approved, the lender sends a single lump sum to your bank account. The funds can be used for many purposes, including paying off high-interest credit cards, building a pool, or making a down payment on another property. Repayment then happens through fixed monthly installments, often for as long as 30 years.

How HELOCs work

A HELOC also lets you borrow against the equity in your home, but instead of receiving one payout, you are given a reusable line of credit.

It functions somewhat like a credit card: you borrow only what you need, leave the rest available, and pay interest only on the amount actually drawn.

A HELOC usually has two phases:

1. The draw period - This starts when the loan is approved and may last up to 10 years, depending on the lender. During this time, you can withdraw money and repay it repeatedly.
2. The repayment period - Once the draw phase ends, you can no longer take out new funds and must begin paying down the remaining balance, either in one payment or through monthly installments.

Why borrowing from home equity can be appealing

There are several reasons homeowners turn to home equity financing.

For one thing, these loans usually come with lower rates than unsecured personal loans. Because the borrowing is backed by collateral, secured debt is typically priced more favorably. That can translate into lower interest costs over time.

Home equity borrowing can also give you access to much larger sums than a personal loan. Personal loans often top out around $100,000, while a home equity loan or HELOC may allow you to borrow several times that amount, depending on how much equity you have built.

What risks come with borrowing against your home?

Although using home equity can be useful, it is not without serious risk. It is one of the more dangerous forms of borrowing because failure to repay could put your home on the line.

When you borrow against your house, the property serves as collateral. If you miss enough payments, the lender can move to sell the home to recover the debt. That could mean losing the property altogether, and you may still owe money if the sale does not fully cover the balance. Your credit score would also suffer, which could make future mortgage applications harder.

There are also upfront expenses to think about. Closing costs, including origination fees, credit checks, appraisals, and paperwork processing, usually range from 2% to 5% of the loan amount.

The bottom line

For homeowners looking for an affordable way to borrow, especially to finance projects that could improve their finances or pay off expensive debt, home equity financing can be a sensible option. Monitoring home equity loan and HELOC rates can help you identify a good time to apply.

Still, the downside is significant: falling behind on payments could put your home at risk, and you might still owe money after foreclosure if the sale price falls short.

If you have carefully reviewed your finances and built a realistic repayment plan, a home equity loan or HELOC can be a practical financial tool.

Frequently asked questions

How soon can I tap my home equity?

You can usually access home equity once you have built at least 15% to 20% equity, depending on the lender. Most banks require you to keep at least that amount in the home at all times.

How do you qualify for a home equity loan or HELOC?

To qualify, borrowers generally need a strong credit score, a manageable debt-to-income ratio, and steady, reliable income. You also need more than 15% to 20% equity in the home.

How do I calculate my home equity?

To figure out your home equity, subtract the amount you still owe on your mortgage from your home’s current estimated value. For example, if a home is worth $350,000 and the mortgage balance is $200,000, the equity is $150,000.