The national average fixed home equity loan rate is 7.42% as of late September 2026, according to Curinos. For a HELOC, the Bankrate national average sits at 7.28%.

Now the more useful question: why won’t you get that rate?

National averages are built on a specific borrower — typically a $30,000 loan at 700 FICO and 80% combined loan-to-value on a primary residence. Change any one of those and your quote moves. This page explains how much each factor moves it, and why two lenders quote the same file differently.

Home Equity Loan Rates Don’t Follow the Prime Rate

rates on home equity loans

This is the single most misunderstood thing about home equity pricing, and it explains a lot of confusing rate news.

HELOCs are indexed to the prime rate. Your rate is prime plus a margin set at closing. When the Federal Reserve moves, prime moves with it, and every variable HELOC reprices within one or two billing cycles.

Fixed home equity loans are not indexed to anything you can look up. They’re portfolio products — lenders hold them rather than selling them into a standardized secondary market. Pricing reflects the lender’s cost of funds, which tracks deposit rates and intermediate-term Treasury yields, plus whatever margin their portfolio strategy requires.

Here’s what that looked like in practice this year. When the Fed raised its benchmark in September 2026 — its first increase in three years — prime went from 6.75% to 7.00%. HELOC averages jumped 17 basis points in a single week, the largest move of the year.

Fixed home equity loan averages had been drifting the other way over the same period, falling from above 8% earlier in 2026 to the current 7.42%.

The practical takeaway: a Fed announcement tells you something immediate about HELOC pricing and almost nothing immediate about fixed home equity pricing. Don’t time a fixed second lien off an FOMC calendar.

The Six Adjustments That Move Your Quote

Beyond credit score, six factors reprice a home equity loan. Most borrowers know about the first one and are surprised by the rest.

Factor How It Moves Your Rate
Combined loan-to-value The largest adjustment after credit. Pricing tiers commonly break at 60%, 70%, 80% and 85% CLTV. Dropping below a break can be worth more than 50 basis points — which is why requesting less money sometimes lowers your rate
Loan amount Cuts both ways. Very small loans carry higher rates because fixed origination costs spread over less principal. Very large balances also price higher — a $500,000 fixed second at 60% CLTV recently averaged 7.91% against the 7.42% headline
Term length Shorter terms usually price lower. A 5-year fixed typically beats a 20-year, because the lender’s rate exposure is shorter
Occupancy A second home or investment property adds 1 to 2 points. This is the adjustment that surprises people most — the same borrower, same credit, same equity, pays substantially more on a rental
Property type Single-family detached prices best. Condos, manufactured homes and 2–4 unit properties each carry adjustments, and some lenders decline certain types entirely
Lien position Second position is the standard assumption. A third lien prices dramatically higher and few lenders write them at all

Why Two Lenders Quote the Same File Differently

Home equity loans have no Fannie Mae. First mortgages are priced against a standardized secondary market, which compresses the spread between lenders. Second liens mostly aren’t.

That has three consequences for you:

Quote spreads are wider than on a first mortgage. Identical files routinely draw offers a half point apart or more — a dispersion you rarely see on a conventional purchase loan.

Credit unions frequently price below banks. Member-owned institutions have different return requirements and often waive closing costs outright.

Relationship pricing is real here. Discounts of 0.125% to 0.625% for existing customers are common, and on a portfolio product the lender has more room to grant them.

Rate Versus APR on a Second Lien

Compare APR, not the quoted rate — and the reason is specific to home equity loans.

Closing costs on a fixed second typically run 2% to 5% of the loan amount. On a $50,000 loan, that’s $1,000 to $2,500 spread across a 10 or 15-year term, which moves APR meaningfully above the note rate.

Meanwhile, many lenders charge nothing at all. A no-closing-cost offer at a slightly higher rate can beat a lower-rate offer with $2,500 in fees, depending on your term.

One caution on no-cost offers: most carry a recapture clause. Close the loan within a set period — commonly three years — and the waived costs come back. Ask how long that window runs before accepting.

What Current Rates Mean in Payments

Loan Amount 10-Year Payment 15-Year Payment
$25,000 $296 $231
$50,000 $592 $461
$75,000 $888 $692
$100,000 $1,184 $923

Principal and interest at 7.42%, the current national average. Your rate will differ based on the six factors above.

How to Get an Accurate Quote

Give every lender identical inputs. Rates move daily and vary by loan amount, so comparing a Tuesday quote on $60,000 against a Friday quote on $50,000 tells you nothing.

  • Request quotes the same day from at least three lenders
  • Specify the exact loan amount, term, and property type on each
  • Ask for the APR and total closing costs in dollars, not percentages
  • Ask whether a lower CLTV tier would improve pricing — and what loan amount gets you there
  • Multiple inquiries within 14 days count as one credit event, so comparing costs you nothing

Frequently Asked Questions

Why is my home equity loan rate higher than the national average?

National averages assume a specific profile — commonly a $30,000 loan at 700 FICO and 80% CLTV on a primary residence. Six factors move your quote away from it: combined loan-to-value, loan amount, term length, occupancy, property type, and lien position. Occupancy is the one that surprises people most — a rental property can add one to two full points over the same loan on a primary residence. Ask your lender which specific adjustments applied to your file; most will tell you, and some are within your control.

Do home equity loan rates go down when the Fed cuts rates?

Not directly, and not immediately. HELOCs are indexed to the prime rate and reprice within one or two billing cycles of a Fed move. Fixed home equity loans aren’t indexed to prime at all — they’re portfolio products priced off a lender’s cost of funds, which tracks deposit rates and intermediate Treasury yields. The two can move in opposite directions over the same period, and they did during 2026. Don’t time a fixed second lien around an FOMC meeting.

Can borrowing less money get me a lower rate?

Often yes, and it’s the fastest lever available. Lenders price in combined loan-to-value tiers that commonly break at 60%, 70%, 80% and 85%. If a $60,000 request puts you at 82% CLTV and a $50,000 request puts you at 79%, that smaller loan may price materially better — sometimes by more than 50 basis points. Ask your loan officer what amount would move you into the next tier down. Raising a credit score takes months; this takes a phone call.

Is a lower rate always the better offer?

No — compare APR and total cost. Closing costs on a fixed second run 2% to 5% of the loan amount, while some lenders charge nothing. A no-closing-cost offer at a slightly higher rate frequently beats a lower-rate offer carrying $2,500 in fees, particularly on shorter terms. Also ask about recapture: most no-cost offers require you to repay the waived costs if you close the loan within a set period, commonly three years.

How long is a home equity loan rate quote good for?

Typically 30 to 60 days, and some lenders charge for longer locks. Because second lien pricing moves with each lender’s portfolio strategy rather than a published index, quotes can change more unpredictably than first mortgage rates. Get your lock terms in writing, confirm the expiration date, and ask what happens if your closing is delayed past it. On a loan that may take two to six weeks to fund, that window matters.

Rates change weekly and moved substantially in September 2026. Verify current pricing directly with lenders before relying on any figure here. RefiGuide.org is an advertising marketplace, not a lender.

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