HELOC and home equity loan rates Monday, March 2, 2026: How rates vary for HELOCs and HELs

Core Insights - The article discusses the choice between variable and fixed interest rates for home equity lines of credit (HELOC) and home equity loans, emphasizing the importance of understanding the pros and cons of each option [1] Interest Rates - The average adjustable rate for HELOCs is currently 7.23%, while the national average fixed rate for home equity loans is 7.44%, both based on applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio of less than 70% [2][11] - The prime rate, which is often used as an index for HELOCs, has fallen to 6.75%, and with a typical margin of 0.75%, HELOCs could start at a variable rate of 7.50% [5] Home Equity Utilization - Homeowners currently hold approximately $34 trillion in equity, and for those with low primary mortgage rates, obtaining a second mortgage through a HELOC or home equity loan can be a beneficial option [4][12] - HELOCs allow homeowners to draw from their approved credit line as needed, while home equity loans provide a lump sum, catering to different financial needs [3] Lender Flexibility and Offers - Lenders have flexibility in pricing second mortgage products, making it essential for borrowers to shop around for the best rates, which can vary based on credit score and debt levels [6] - FourLeaf Credit Union is currently offering a HELOC rate of 5.99% for the first 12 months on lines up to $500,000, which will convert to an adjustable rate after one year [8] Payment Structures - For a $50,000 HELOC at a 7.25% interest rate, the monthly payment during the 10-year draw period would be approximately $302, but this rate is variable and may increase during the repayment period [13]