The Equity Advantage in 2026

The national average home equity line of credit the interest rate continues to fall. For 2026, the year will start with the lowest HELOC rates in more than three years. This is a huge benefit that will benefit homeowners looking to access their home value in the new year.

According to Curinos data, the average monthly HELOC rate is 7.44%. This rate is based on applicants with a minimum credit score of 780 and a maximum score combined loan-to-value (CLTV) ratio by 70%.

As mortgage rates refuse to budge, homeowners with home equity and a favorable primary mortgage rate may feel the frustration of not being able to access this growing value in their home.

For those who don’t want to give up their low interest rate on their home loan, a home equity line of credit may be a viable solution.

The Federal Reserve estimates that homeowners have $36 trillion in equity locked within the walls of their homes. A HELOC second mortgage allows American homeowners to tap into their accumulated record-breaking equity.

HELOC interest rates are different from primary mortgage rates. Second mortgage rates are based on an indexed rate plus a margin. This index is often the prime rate, which has just fallen to 6.75%. If a lender added 0.75% margin, the HELOC would have a rate of 7.50%.

Lenders have the flexibility to price a second mortgage product, such as a HELOC or Home Equity Loanso it is worth shopping around. Your rate will depend on your credit score, the amount of debt you have, and the amount of your line of credit relative to the value of your home.

And average national HELOC rates may include “introductory” rates that may only last six months or a year. After that, your interest rate will become adjustable, likely starting at a significantly higher rate.

You don’t have to give up your low-rate mortgage to access the equity in your home. Keep your primary mortgage and consider a second mortgagesuch as a home equity line of credit.

THE best HELOC lenders offer low fees, a fixed rate option and generous credit lines. A HELOC allows you to easily use your home equity in any way and amount you want, up to your line of credit limit. Take a little out; pay it back. Repeat.

During this time, you pay off your low-interest primary mortgage.

Today, LendingTree offers a HELOC APR as low as 6.36% on a $150,000 line of credit. However, keep in mind that HELOCs typically come with variable interest rates, meaning your rate will fluctuate periodically. Make sure you can afford to pay monthly payments if your rate increases.

And as always, compare fees, repayment terms and minimum withdrawal amount. The drawdown is the amount of money a lender asks you to initially draw down from your equity.

The power of a HELOC is leveraging only what you need and leaving a portion of your credit line available for future needs. You don’t pay interest on what you don’t borrow.

Rates vary so much from lender to lender that it’s hard to find a magic number. You can see rates ranging from just under 6% to 18%. It really depends on your creditworthiness and diligence as a buyer.

For homeowners with low primary mortgage rates and a lot of equity in their home, it’s likely one of the best times to get a HELOC. You don’t give up that great mortgage rate, and you can use the money from your equity for things like improvements, repairs, and upgrades. Of course, you can also use a HELOC for fun things, like a vacation, if you have the discipline to pay it off quickly. A vacation probably isn’t worth going into debt in the long run.

If you withdraw the entire $50,000 from a home line of credit and pay an interest rate of 7.50%, your monthly payment during the 10-year period drawing period would be around $313. This sounds good, but remember that the rate is usually variable, so it changes periodically and your payments will increase over the 20-year repayment period. A HELOC essentially becomes a 30-year loan. HELOCs are better if you borrow and pay off the balance in a much shorter time frame.