HELOC Rates Dip, Home Equity Rises To 2026 High

Image: Getty Images; Illustration: Bankrate

A mixed week for home equity rates. The $30,000 home equity line of credit fell two basis points to 7.43%, according to Bankrate’s national survey of lenders. Meanwhile, the five-year $30,000 home equity loan rose two basis points to 8.12%, its highest level this year.

As HELOC rates become more affordable, Brandon Schneider, founder and financial planner at Deliberate Wealth, highlights some of their benefits. “If you’re a disciplined financial person, it’s kind of like a Swiss army knife, as opposed to the home equity loan, where you can use the money when you want to,” he says. “You can use it multiple times depending on where you’re getting it from. You can probably create a fixed structure inside of the actual variable rate product.”

What’s driving home equity rates today?

Home equity rates are being driven primarily by two factors — Federal Reserve policy and long-term inflation expectations.

As expected, the Fed held interest rates steady at its latest policy-setting meeting in May. However, uncertainty is intensifying about its next moves. In the largest show of dissent since 1992, four Fed officials opposed the decision to keep rates unchanged.

“If not for the inflation created by the war in Iran, there’s a good chance the Fed would be cutting rates,” says Ted Rossman, principal Bankrate analyst. “They’re standing pat for now, waiting to see what happens with prices. The job market, the other side of the Fed’s dual mandate, appears relatively stable for now.” As a result, Rossman predicts that “it should be a generally flat rate environment for the balance of 2026, meaning an average around 7% for HELOCs and around 8% for home equity loans.”

Current home equity rates vs. rates on other types of credit

Because HELOCs and home equity loans use your home as collateral, their rates tend to be much less expensive — more akin to current mortgage rates — than the interest charged on credit cards or personal loans, which aren’t secured.

While average rates are useful to know, the individual offer you receive on a HELOC or new home equity loan also reflects additional factors, such as your creditworthiness and financials. Then there’s the value of your home and the size of your ownership stake. Lenders generally limit all your home loans (including your mortgage) to a maximum of 80% to 85% of your home’s worth.

Keep in mind: Even if you’re able to secure a favorable rate from a lender, home equity products are still relatively high-cost debt.

Unlock your home’s value

A fixed-rate home equity loan offers a lump-sum payout and a predictable repayment schedule.

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