Home equity rates today: what moves them, and how to get the best
A HELOC averages 7.90% right now, a fixed home equity loan a bit higher, and a cash-out refinance lower still — because each is priced differently. Understanding what drives your home equity rate, and which product matches your need, is worth more than chasing the lowest advertised number.
The three products price on different benchmarks. A HELOC is variable and tied to the prime rate, so it moves when the Federal Reserve moves — cheaper today, but your payment can rise later. A fixed home equity loan locks a rate for the life of a lump sum, trading a slightly higher rate for certainty. A cash-out refinance replaces your first mortgage entirely, so it prices like a mortgage — usually lowest, but it resets your whole loan.
On top of the product, the usual levers apply. Your credit score, your combined loan-to-value ratio (most lenders cap borrowing at 80–85% of the home's value), and your debt-to-income ratio each move the rate. More equity and a stronger score mean a better price, so the same home can carry very different rates for different borrowers.
Match the product to the need before you chase the rate. A HELOC suits staggered spending like a phased remodel; a fixed equity loan fits a one-time cost you can size now; a cash-out refinance makes sense mainly when you also want to change your first mortgage. All three are secured by your home, so weigh the rate against the stakes. Run the payment in the HELOC calculator.
Questions people ask
What is the average HELOC rate right now?
Around 7.90%, though it varies by lender, your credit, and your combined loan-to-value. HELOC rates are variable and tied to the prime rate, so they move with Federal Reserve rate changes.
Why is a cash-out refinance rate lower than a HELOC?
Because it replaces your entire first mortgage and is priced like one — a first-lien loan carries less risk to the lender than a second-lien HELOC. The trade is that it resets your whole mortgage, which may not be worth it if your current rate is low.
What affects my home equity rate?
Your credit score, your combined loan-to-value ratio (usually capped at 80–85%), your debt-to-income ratio, and which product you choose. More equity and stronger credit earn a lower rate.
Fixed home equity loan or variable HELOC?
Choose fixed for a one-time cost you can size now and want a stable payment on. Choose a HELOC for staggered or uncertain spending — but remember its rate and payment can rise with the prime rate.