HELOC & Home Equity Loan Rates Near 1-Year Lows – Shop Now

Home equity loan and Home Equity Line of Credit (HELOC) rates are currently hovering near one-year lows, presenting potential opportunities for homeowners looking to access capital. As of February 14, 2026, the average HELOC rate stands at 7.23%, according to data firm Curinos, just slightly above the 52-week low of 7.19%. The national average rate for a home equity loan is 7.44%, with a 12-month low of 7.38% recorded in early December 2025.

These rates are based on borrowers with a credit score of at least 780 and a combined loan-to-value ratio (CLTV) of less than 70%. The CLTV represents the total of all loans secured by a property, divided by the property’s appraised value. A lower CLTV generally indicates a lower risk for lenders, and more favorable rates for borrowers.

The current environment is particularly attractive for homeowners who have built up equity in their homes but are hesitant to refinance their primary mortgage, especially given that mortgage rates remain around 6%. A second mortgage, in the form of a HELOC or home equity loan, allows homeowners to tap into that equity without altering the terms of their existing, potentially lower, mortgage rate.

Understanding HELOCs and Home Equity Loans

While both HELOCs and home equity loans allow homeowners to borrow against their equity, they function differently. A HELOC is a line of credit, similar to a credit card, allowing borrowers to draw funds as needed during a specified draw period, typically 10 years. Borrowers only pay interest on the amount they’ve drawn. Once the draw period ends, a repayment period of up to 20 years begins, during which the outstanding balance is repaid.

Home equity loans, provide a lump sum of cash upfront. Borrowers repay the loan with fixed monthly payments over a set term, typically 5 to 30 years. Because of the fixed-rate structure, home equity loans offer predictability in payments, while HELOCs have variable rates that fluctuate with the prime rate, which currently sits at 6.75%.

The interest rate on a HELOC is calculated by adding a margin to the index rate. For example, a lender might add 0.75% to the 6.75% prime rate, resulting in a HELOC rate of 7.50%. The margin can vary depending on the lender and the borrower’s creditworthiness.

Navigating Introductory Rates and Fees

Homeowners considering a HELOC or home equity loan should be aware of introductory rates. Some lenders offer promotional rates that are lower than the standard rate, but these rates are often temporary, lasting only six months to a year. After the introductory period, the rate typically adjusts to a variable rate, potentially higher than the initial offer.

It’s also crucial to compare fees associated with both types of loans. These can include application fees, appraisal fees, and annual fees. HELOCs often have minimum draw requirements, meaning borrowers must initially withdraw a certain amount of funds. The best HELOC lenders offer low fees, a fixed-rate option, and generous credit lines.

The Impact of Creditworthiness and Loan-to-Value

The interest rate a borrower receives is heavily influenced by their credit score and CLTV. A higher credit score and a lower CLTV generally result in a lower interest rate. Lenders view borrowers with strong credit and significant equity in their homes as less risky.

Rates can vary significantly, ranging from below 6% to as high as 18%, depending on these factors and the lender. Shopping around and comparing offers from multiple lenders is essential to secure the most favorable terms.

A Favorable Time for Homeowners

For homeowners with substantial equity and a low primary mortgage rate, the current rate environment may present a particularly opportune time to consider a HELOC or home equity loan. These products can provide access to capital for a variety of purposes, including home improvements, debt consolidation, or other financial needs, without sacrificing the benefits of a low-interest primary mortgage.

However, borrowers should carefully consider the terms of the loan, including the interest rate, fees, and repayment schedule, before making a decision. Understanding the difference between a HELOC’s draw period and repayment period is also crucial, as the variable rate associated with HELOCs can lead to fluctuating monthly payments during the repayment phase. A $50,000 HELOC with a 7.50% interest rate over a 10-year draw period and 20-year repayment period could result in monthly payments around $313 during the draw period, but those payments are subject to change as the rate adjusts.