National average rates for second mortgage products, such as home equity loans and lines of credit, are just fractions off of one-year lows. Well-qualified borrowers are likely to make up that difference if they shop for the best interest rate offers from two or three lenders.
According to real estate analytics firm Curinos, the average HELOC rate is 7.23%, down just two basis points from one month ago. The 52-week HELOC low was 7.19%. The national average rate on a home equity loan is 7.44%, down 12 basis points from last month. The low was 7.38% in early December 2025.
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%.
Homeowners have a massive amount of value tied up in their houses — nearly $34 trillion at the end of the third quarter of 2025, according to the Federal Reserve.
With mortgage rates remaining in the low-6% range, homeowners are unlikely to let go of their primary mortgage anytime soon, so selling a house may not be an option. A cash-out refinance might not be workable either. Why give up your 5%, 4% — or even 3% mortgage?
Accessing some of that value with a use-it-as-you-need-it HELOC or lump-sum home equity loan can be an excellent alternative.
Home equity interest rates are calculated differently from mortgage rates. Second mortgage rates are based on an index rate plus a margin. That index is often the prime rate, which is 6.75%. If a lender added 0.75% as a margin, the HELOC would have a variable 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. 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. Shop a few lenders to find your best interest rate offer.
Today, FourLeaf Credit Union is offering a HELOC APR (annual percentage rate) of 5.99% for 12 months on lines up to $500,000. That’s an introductory rate that will convert to a variable rate in one year.
When shopping for lenders, be aware of both rates. And as always, compare fees, repayment terms, and the minimum draw amount. The draw is the amount of money a lender requires you to initially take from your equity.
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.
Rates vary significantly from one lender to the next. You may see rates from 6% to as much as 18%. It really depends on your creditworthiness and how diligent you are as a shopper. Currently, the national average for a HELOC is 7.23%, and for a home equity loan it’s 7.44%.
Interest rates fell for most of 2025. They are expected to remain steady through the first half on 2026. So yes, it’s a good time to get a second mortgage. And with a HELOC or a HEL, you can use the cash drawn from your equity for things like home improvements, repairs, and upgrades. Or just about anything else.
If you withdraw the full $50,000 from a line of credit on your home 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 of time.
