Core Insights - Home equity lines of credit (HELOC) and home equity loan rates are currently at their lowest in years, with introductory offers also being attractive [1] - The national average HELOC rate is 7.25%, while the average home equity loan rate is 7.56% as of January 28, 2026 [2][11] - Homeowners have approximately $34 trillion in home equity, making second mortgages a viable option for accessing this value [3] Interest Rate Dynamics - Home equity interest rates differ from primary mortgage rates, being based on an index rate plus a margin, often linked to the prime rate [4] - The prime rate has decreased to 6.75% after three Federal Reserve rate cuts, influencing the pricing of HELOCs and home equity loans [4] - Lenders have flexibility in pricing second mortgage products, making it essential for borrowers to shop around for the best rates [5] Loan Features and Options - HELOCs typically offer introductory rates that may last for six months to a year before converting to a variable rate [5][8] - Home equity loans generally do not have introductory rates, providing a fixed rate for the duration of the repayment period [6][8] - The best HELOC lenders provide low fees, fixed-rate options, and generous credit lines, allowing homeowners to utilize their equity flexibly [7] Current Offers and Comparisons - FourLeaf Credit Union is currently offering a HELOC rate of 5.99% for 12 months on lines up to $500,000, which will convert to a variable rate of 7.25% after one year [8] - The average monthly payment 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]