HELOC and home equity loan rates today, January 16, 2026: Rates are lower are on HELOCs

Core Insights - The national average rate for home equity lines of credit (HELOC) has reached a new low, with the average HELOC rate at 7.25%, down 19 basis points from the previous month, while home equity loan rates are at 7.56%, down three basis points [2][10] Group 1: Interest Rate Trends - The average HELOC rate has decreased, indicating a trend of falling interest rates for home equity products, which is beneficial for homeowners looking to access equity [1][2] - The prime rate has dropped to 6.75% following three rate cuts by the Federal Reserve in 2025, prompting lenders to reprice their home equity products [6] Group 2: Home Equity Value - Homeowners have approximately $36 trillion in home equity as of Q2 2025, the highest recorded amount, suggesting a significant opportunity for accessing this value through HELOCs or home equity loans [3] Group 3: Loan Characteristics - HELOCs typically have variable rates, while home equity loans offer fixed rates, providing different options for borrowers depending on their financial needs [1][4] - Lenders determine interest rates based on various factors, including credit score and combined loan-to-value ratio, allowing for flexibility in pricing [5] Group 4: Market Opportunities - With interest rates expected to continue declining, it is considered a favorable time for homeowners to obtain a second mortgage, such as a HELOC or home equity loan, for purposes like home improvements [11] - Lenders are offering competitive introductory rates, such as FourLeaf Credit Union's 5.99% APR for HELOCs, which can attract borrowers looking for lower initial costs [6][7]