The difference between the current home equity loan (HEL) rate and the average HELOC rate is 33 basis points, according to Curinos, a real estate data analytics company. When rates are this far apart, choosing the right option isn't just about which rate is lower. How you plan to use your funds will determine the loan product that is best for you.
The average HELOC adjustable rate is **7.09%**, a new 2026 low, according to real estate data analytics company Curinos. The national average rate on a fixed-rate home equity loan is **7.42%**, up from its 2026 low of 7.31% in late June. Both rates are based on applicants with a minimum credit score of 780 and a maximumcombined loan-to-value ratio (CLTV) of less than 70%.
Most HELOCs are variable-rate products, meaning their interest rates are tied to an external interest rate. When that rate rises or falls, the rate on your HELOC generally follows suit. HELOCs are typically tied to the prime rate, the baseline rate banks currently charge their most creditworthy customers.
The best HELOC lenders will assess the risk any borrower presents and add a margin to protect themselves. Riskier borrowers will have larger margins, while those considered less risky will receive smaller ones. Factors such as your credit score, debt-to-income ratio (DTI), and loan-to-value ratio (LTV) will all be considered in this assessment.
A home equity loan and its interest rate work like a HELOC in some ways and like a traditional primary mortgage in others. As with a HELOC, the prime rate usually impacts your home equity loan rates, and home equity loan lenders incorporate a margin into your rate. Both HELOC and home equity loan rates are loosely influenced by the Federal Reserve's federal funds rate and broader economic conditions.
However, like many first mortgages, home equity loans are typically fixed-rate products, meaning you'll have the same interest rate for the entire term. Fixed-rate HELOCs exist, but they're much less common. **_Learn more:_**_HELOC and home equity loan interest rates: How they work and what you can expect to pay_ Specific loan requirements vary by lender, but generally, home equity loans and HELOCs require a borrower to: Lenders may charge origination fees and other closing costs on a HELOC or home equity loan. When shopping for yours, make sure to ask about all possible application fees, annual charges, early account closure fees, and other one-time or ongoing expenses.
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