Lowest rates since late 2022
Homeowners across the country are in luck as national average rates for second mortgage home equity loans and lines of credit are now at their lowest point since late 2022, hovering around 7%. This means that accessing the equity in your home has never been more affordable.
According to real estate analytics firm Curinos, the average rate for a Home Equity Line of Credit (HELOC) is currently at 7.23%, while the national average rate for a home equity loan stands at 7.44%. These rates are based on applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio (CLTV) of less than 70%.
With primary mortgage rates remaining in the low 6% range, homeowners are hesitant to give up their lower interest rates by selling their homes or opting for a cash-out refinance. This is where a HELOC or lump-sum home equity loan can come in handy. These options allow you to access some of the value in your home without sacrificing your current mortgage rate.
When it comes to calculating home equity interest rates, second mortgage rates are typically based on an index rate plus a margin. The index rate is often the prime rate, currently at 6.75%. For example, if a lender adds a 0.75% margin, the HELOC would have a variable rate of 7.50%. On the other hand, a home equity loan may have a different margin as it is a fixed-interest product.
Lenders have the flexibility to price second mortgage products, such as HELOCs and home equity loans, based on factors such as your credit score, debt amount, and credit line compared to the value of your home. It’s important to shop around and compare offers from different lenders to find the best interest rate for your situation.
One lender currently offering a competitive HELOC APR is FourLeaf Credit Union, with a rate of 5.99% for the first 12 months on lines up to $500,000. It’s essential to be aware of both the introductory rate and the variable rate that will apply after the initial period, as well as any fees, repayment terms, and minimum draw amount.
For those looking for a more straightforward option, home equity loan lenders may be easier to find as you’ll be locked into a fixed rate for the entire repayment period. This means you’ll only have one rate to focus on, without any draw minimums to consider.
Interest rates have been on a downward trend for most of 2025 and are expected to remain stable through the first half of 2026. This makes it a favorable time to consider a second mortgage. Whether you use the funds for home improvements, repairs, upgrades, or any other purpose, a HELOC or home equity loan can provide the cash you need.
It’s important to consider the repayment terms when opting for a HELOC, as the interest rate is usually variable and payments can increase over time. HELOCs are best suited for those who plan to borrow and repay the balance within a shorter period.
Overall, with national average rates for second mortgage products at their lowest in years, now is a great time for homeowners to tap into their home equity and take advantage of these favorable interest rates.
