In the market for a HELOC? It is better to act sooner than later.
Home equity loan rates and home equity lines of credit (HELOCs) remain flat or low through 2026. However, if inflation remains the Fed’s primary concern, due to rising energy costs due to the Iran war, the Fed may raise rates later this year, driving HELOCs to cost more.
Find out how HELOC and mortgage interest rates work and what you can expect to pay.
HELOC and mortgage loan rates: Saturday, May 16, 2026
The standard ELOC level is 7.21%according to real estate appraisal firm Curins. HELOCs started to drop in 2026 to 7.19% in mid-January and again in March. The national average mortgage rate is 7.36%similar to the 2026 low we first saw in mid-March.
Rates are based on applicants with a minimum credit score of 780 and a combined maximum loan-to-value (CLTV) ratio of less than 70%.
With mortgage rates remaining at around 6%, homeowners with equity and low mortgage rates may feel frustrated by not being able to access that growing amount on their home. A second mortgage in the form of a HELOC or HEL can be a viable solution.
What can you use for a HELOC? 7 ways home owners spend money.
HELOC and mortgage interest rates: How they work
Mortgage interest rates are calculated differently than basic mortgage rates. The second mortgage rates are based on the index rate and the margin. That rate is usually the prime rate, currently 6.75%. If the lender adds 0.75% as margin, the HELOC will be worth 7.50%.
A home loan may have a different margin because it is a fixed interest product.
Each lender has its own way of pricing second mortgage products, such as a HELOC or home equity loan, so you pay to shop. Your rate will depend on your credit score, the amount of debt you carry, and the value of your line of credit compared to the value of your home.
And national average HELOC rates may include “introductory” rates that may last only six months or one year. After that, your interest rate will adjust, probably starting at a higher rate.
Also, because home equity loans have a fixed rate, there is less chance of an introductory “teaser” rate.
The presentation rate will be well below the market rate
The best HELOC lenders offer low down payments, a fixed rate option, and open lines of credit. A HELOC allows you to easily use your home equity in any way and in any amount you choose, up to your credit limit. Take out the rest; pay. Repeat.
Look for a lender that offers a below-market introductory rate. For example, FourLeaf Credit Union currently offers a HELOC APR of 5.99% 12 months on lines up to $500,000. That introductory rate will convert to a variable amount in one year. When shopping for lenders, be aware of both rates.
Also, pay attention to the minimum withdrawal amount for a HELOC. The draw is the amount of money the lender requires you to take out at the start of your equity.
The best home loan lenders may be easy to find, because the fixed rate you pay will last for the duration of the repayment period. That means just one level to focus on. And you get a whole lot of money, so there are few things to consider.
And as always, compare fees and the fine print of payment terms.
Read more: Find out how much you can borrow with a HELOC
HELOC rates today: FAQs
What is a good interest rate on a HELOC right now?
Rates vary from one lender to the next — and where you live. You can see rates from about 6% to 18%. It depends on your creditworthiness and how diligent a buyer you are. The national average for an adjustable rate HELOC is 7.21%, and for a fixed rate home loan it is 7.36%. Try to match or beat those levels.
Is it a good idea to get a HELOC right now?
For homeowners with low mortgage rates and a significant amount of equity in their home, it may be one of the best times to get a HELOC or home equity loan. You don’t give up that loan amount, and you can use the money taken from your equity for things like home improvements, repairs, and upgrades. Anything else.
What is the monthly payment for a $50,000 home equity line of credit?
If you take out the full $50,000 on your home equity line of credit and pay 7.25% interest, for example, your monthly payment over the 10-year HELOC draw period would be $302. That sounds good, but remember that the rate is often variable, so it changes from time to time, and your payments will increase over the course of a 20-year repayment period. A HELOC essentially becomes a 30-year loan. HELOCs are best if you borrow and repay the balance within a very short period of time.
