HELOC and home equity loan rates today, January 6, 2026: Holding near 7.5%

Core Insights - Home equity lines of credit (HELOC) and home equity loan (HEL) rates are currently stable around 7.5%, providing homeowners with access to their home equity at favorable rates not seen in three years [1] Group 1: Current Rates and Trends - The average HELOC rate is reported at 7.44%, while the national average for home equity loans stands at 7.59%, based on applicants with a minimum credit score of 780 and a combined loan-to-value ratio of less than 70% [2] - The Federal Reserve estimates that homeowners have approximately $36 trillion in equity locked in their homes, indicating a significant opportunity for homeowners to leverage this equity through second mortgages [4] Group 2: Product Comparison - A HELOC allows homeowners to draw from an approved line of credit as needed, while a home equity loan provides a lump sum payment [3] - Home equity interest rates differ from primary mortgage rates, typically based on an index rate plus a margin, with current prime rates at 6.75% [5] Group 3: Lender Considerations - Lenders have flexibility in pricing second mortgage products, making it essential for borrowers to shop around for the best rates, which can vary significantly based on creditworthiness and debt levels [6] - Some lenders may offer below-market introductory rates for HELOCs, which can last for a limited time before converting to a variable rate [9] Group 4: Financial Implications - For homeowners with low primary mortgage rates, obtaining a HELOC or HEL can be advantageous, allowing access to cash for home improvements or other expenses without sacrificing a favorable mortgage rate [12] - Monthly payments for a $50,000 HELOC at a 7.50% interest rate would be approximately $313 during the draw period, but payments may increase during the repayment period due to variable rates [13]