Thinking of tapping into your equity? According to Bankrate’s national survey of rates, average home equity loan rates currently range from 8.04% to 10.17%. Borrowers may soon see a drop in home equity loan rates if the Federal Reserve moves to cut the federal funds rate in 2025.
| Lender | Rates (APR) | Fees | Loan amounts | Max. LTV |
| Aven | 6.99% – 15.49% | 4.90% origination | $5,000 – $250,000 | 89.00% |
| BMO | Starting at 8.97% | None | $5,000 – $150,000 | 80.00% |
| Connexus Credit Union | Starting at 7.31% | Closing costs | $5,000 – $200,000 | 90.00% |
| Discover | 7.85% – 12.48% | None | $35,000 – $300,000 | 90.00% |
| Figure | 7.05% – 15.20% | 4.99% origination | $15,000 – $400,000 | 95.00% |
| Flagstar Bank | Starting at 8.30% | Annual | $10,000 – $1 million | 89.99% |
| Keybank | Starting at 8.61% | $295 origination | $25,000 – $249,999 | 80.00% |
| Navy Federal Credit Union | Starting at 7.34% | None | $10,000 – $500,000 | 100.00% |
| Prosper | Starting at 8.00% | Origination (up to $1,495) | Up to $249,000 | 95.00% |
| Randolph-Brooks FCU | Starting at 5.73% | Closing costs | Not disclosed | 80.00% |
| Regions Bank | 6.75% – 14.13% | None | $10,000 – $250,000 | 89.00% |
| TD Bank | 7.74% – 11.29% | $99 origination; closing costs | $10,000 – $500,000 | 89.90% |
| Third Federal | Starting at 6.99% | None | $10,000 – $200,000 | 80.00% |
| U.S. Bank | Starting at 7.65% | None | $15,000 – $750,000 | 80.00% |
Table of Contents
Average interest rates on home equity loans
| Loan term | Average rate | Rate range |
| 5-year | 8.36% | 8.04% – 9.24% |
| 10-year | 8.51% | 8.23% – 9.43% |
| 15-year | 8.42% | 8.34% – 10.17% |
Home equity loan rates vary by term, your credit rating, and other factors. Lenders typically offer lower rates on shorter-term loans since there’s less risk. That’s why a 15-year home equity loan will cost you more than a five-year loan.
Can you get a 30-year home equity loan? Yes, it could make sense if you want the lowest payment possible. Spring EQ, Prosper, and TD Bank all offer 30-year home equity loans.
Current home equity loan rates and trends: 2025 and beyond
Home equity loan rates follow a benchmark rate, which is typically the prime rate, the rate banks offer to their most creditworthy customers. The prime rate, in turn, is influenced by movements in the federal funds rate, which is the rate banks charge to lend money to one another overnight.
The Federal Reserve, the U.S. central bank, decides where to set the federal funds rate. Here’s what that means for home equity loan rates, in simple terms:
- When the Fed raises the federal funds rate, home equity loan rates can go up.
- If the Fed cuts rates, home equity loan rates can go down.
Current interest rates on home equity loans reflect a downward trend that began in September 2024, so the cheapest home equity loans could still be on the horizon.
The Federal Reserve just decided to keep rates at the same levels for the near future, though rate cuts could come later in 2025. If that happens, home equity loan rates could drop further.
Let’s say you borrow $50,000 through a 15-year fixed-rate home equity loan. Here’s how a quarter-point drop in interest (from 8.42% to 8.17%) would affect your loan payments and total cost:
| 8.42% rate | 8.17% rate | |
| Loan amount | $50,000 | $50,000 |
| Monthly payment | $490.03 | $482.75 |
| Total interest paid | $38,205.02 | $36,894.28 |
| Total cost | $88,205.02 | $86,894.28 |
| Total principal paid | $50,000 | $50,000 |
What affects your home equity loan rate?
Several factors influence what you pay for a home equity loan, apart from Fed decisions. Whether you qualify for the lowest home equity loan rates can hinge on:
- Credit scores. Credit is a major factor in home equity lending decisions. Most lenders require a minimum 620 credit score to qualify for a home equity loan, but a higher score can help you lock in lower rates.
- Home equity. The amount of equity you have also makes a difference. You generally need 15% to 20% equity, though the amount varies by lender. Our home equity calculator can help you figure out how much equity you’re sitting on.
- Debt-to-income ratio (DTI). DTI measures how much of your gross income goes to monthly debt payments. The lower this number is, the better your chances of loan approval.
- Loan term. As we mentioned, home equity loan rates may be lower or higher, based on your loan term. A shorter term can cost you less interest, but a higher monthly payment. Longer terms usually have higher rates but lower payments.
Other factors influencing home equity loan rates include the state you live in and overall economic conditions. If a recession is looming, for example, lenders may impose stricter conditions on borrowers or scale back on lending temporarily.
When clients are considering a home equity loan, I help them weigh current rates against urgency. If there’s no immediate need, waiting for rates to drop is often best. But if they must borrow now, we discuss variable versus fixed rates and future refinancing potential.
What’s the difference between home equity loan rates and HELOC rates?
A home equity loan allows you to borrow a lump sum, using your home as collateral. A home equity line of credit (HELOC) is also secured by your home, but instead of a lump sum, you get access to a revolving line of credit, similar to a credit card.
Home equity loans usually have fixed rates, meaning they don’t change over the life of the loan. HELOCs more often have variable rates, which can go up or down, depending on which way their benchmark rate moves.
- Fixed-rate home equity loans offer predictability, but they could cost more in interest if rates go down after you borrow.
- Variable-rate HELOCs can save money on interest if rates stay low, but potentially become more expensive if rates increase.
Variable-rate HELOCs may have a floor rate, which caps the interest at a set maximum. You can find fixed-rate HELOCs, though they’re less common. Fixed-rate HELOCs may offer a fixed rate initially and then switch to a variable rate, or start with the variable rate and let you lock in a fixed rate later.
In terms of which one is less expensive, HELOC rates typically trail home equity loan rates. However, you’re taking a risk with a variable-rate HELOC since there’s no guarantee your rate won’t go up later. The average HELOC rate for May 2025 was 7.95%, according to Bankrate, with an average range of 6.32% to 9.51%.
How home equity interest rates and loans compare
It helps to compare home equity loan rates to similar products to decide which is right for your needs. We’ve already covered the differences between home equity loans and HELOCs; cash-out refinancing is another possibility you might consider.
A cash-out refinance allows you to replace your current mortgage with a new one. You get a new loan term and rate, and withdraw your equity in cash at closing. Instead of two mortgage payments (for a first mortgage and a home equity loan or HELOC), you just have one.
Here’s how the average rates for all three compare.
| Home equity loan | HELOC | Cash-out refinance |
| 8.36% | 7.95% | 6.98% |
So is it better to get a home equity loan, HELOC, or cash-out refinance loan? It depends.
- Home equity loans can offer predictable monthly payments at fixed interest rates.
- HELOCs offer flexibility, since you only pay interest on the amount of your credit line you use.
- Cash-out refinancing means you don’t have to double-up on mortgage payments, and you can lock in a fixed rate.
If you don’t want to borrow against your home, you might consider a personal loan instead. Personal loans can let you borrow up to $100,000 at fixed rates without collateral.
The average personal loan rate for May was 12.36%.
How does your home equity loan rate affect your payment?
A good rate can mean significant savings on a home equity loan. Here’s another example of how rate differences affect your borrowing cost.
We’ll use a $50,000 home equity loan, with the average low and high rates for a 15-year term.
| 8.34% | 10.17% | |
| Monthly payment | $1,021.98 | $1,066.54 |
| Interest paid | $11,318.51 | $13,992.36 |
| Total cost | $61,318.51 | $63,992.36 |
You’ll save $2,673 in interest charges if you qualify for the lowest home equity loan rate. You’ll also pay $45 less each month for the loan.
How to find the lowest home equity loan rates
Who has the best home equity loan rates? In a nutshell, the best home equity loan for you offers the lowest rate you qualify for, based on your credit scores, debt-to-income ratio, and other qualifications.
Here are our tips to help you find the lowest rates on home equity loans.
- Consider different terms. You may be set on a 15-year or 30-year home equity loan, but a shorter term could help you land a lower rate. Use our home equity loan calculator to estimate what your payments and interest savings might be with different terms.
- Search online. You may be tempted to apply for a home equity loan with your current bank, but online lenders might yield lower rates. Compare rates online with at least three lenders to see which offers the best home equity loan deals.
- Get preapproved. Preapproval means a lender tentatively approves you for a home equity loan. Getting preapproved won’t lock in a low rate, but it can give you an idea of what you’ll likely qualify for.
If you need help searching, check out our roundup of the best home equity loan lenders.
FAQ
What is the downside of a home equity loan when it comes to interest rates?
One of the biggest downsides of a home equity loan is that it typically has a higher interest rate than your original mortgage, especially if you secured your mortgage when rates were lower.
Since a home equity loan is a second loan secured by your property, lenders often charge slightly more to offset their risk. Over time, even a modestly higher rate can add up to significant interest costs, especially if you’re borrowing a large amount.
Plus, if market rates rise after you take out the loan, you might feel locked into a less favorable deal.
Is the bank the best place to find the cheapest home equity loan rates?
Not always. While some banks offer competitive home equity loan rates, they aren’t always the cheapest option. Credit unions, online lenders, and mortgage brokers can often beat traditional banks on rates and fees.
Credit unions are known for offering lower rates and more flexible terms to their members. It’s wise to compare offers from multiple sources before choosing a lender—sometimes the best deal comes from a less traditional institution.
Who has the best home equity loan rates?
The lenders with the best home equity loan rates can vary depending on your credit score, loan amount, property value, and location. Generally, credit unions, online lenders, and specialized home loan companies tend to offer some of the lowest rates.
Our research found that Randolph-Brooks FCU offers the lowest rate in May 2025. Only the most creditworthy borrowers will qualify for this rate, and likely with the shortest home equity loan term available. The best rate for you will depend on your personal financial profile, so it’s worth getting personalized quotes from several lenders to find the lowest possible rate for your situation.
