HELOC and home equity loan rates Monday, January 19, 2026: Low rates — but they probably won't plummet lower

Core Insights - Current national average rates for home equity lines of credit (HELOC) and home equity loans (HEL) are decreasing, making second mortgage options more affordable, but significant drops in rates are not expected soon [1] - The average HELOC rate is currently 7.25%, down 19 basis points from the previous month, while the average HEL rate is 7.56%, a decrease of three basis points [2] - Homeowners with low primary mortgage rates and significant home equity may find it advantageous to secure a HELOC or HEL now, as it allows access to cash without losing their favorable mortgage rate [11] HELOC and HEL Overview - A HELOC provides a line of credit that can be drawn upon as needed, while a home equity loan offers a lump sum payment [3] - The Federal Reserve estimates that homeowners have approximately $36 trillion in equity available, which can be accessed through second mortgages [4] - HELOC rates are influenced by the prime rate, which is currently at 6.75%, and lenders may add a margin to determine the final rate [5] Lender Considerations - Lenders have flexibility in pricing second mortgage products, and it is advisable for borrowers to shop around for the best rates based on their credit score and debt levels [6] - The best HELOC lenders typically offer low fees, fixed-rate options, and generous credit lines, with some introductory rates available [8] - Home equity loan lenders may be easier to find due to the fixed rate structure, which simplifies the borrowing process [9] Rate Comparisons and Payment Structures - Current HELOC rates range from nearly 6% to 18%, with the national average at 7.25% and HEL at 7.56%, serving as benchmarks for borrowers [10] - For a $50,000 HELOC at a 7.50% interest rate, the monthly payment during the 10-year draw period would be approximately $313, but rates are typically variable and can increase over time [12]