What are today's average HELOC rates?

LOAN TYPE AVERAGE RATE AVERAGE RATE RANGE
HELOC 8.65% 7.59% – 9.85%
 

To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. The rates shown above are calculated using a loan or line amount of $30,000, with a FICO score of 700 and a combined loan-to-value ratio of 80 percent.

Note: The above APRs are current as of July 12, 2023. The exact APR you might qualify for depends on your credit score and other factors, such as whether you're an existing customer or enroll in auto-payments.

National HELOC interest rate trends 

Continued highs for HELOC rates

The average rate on a home equity line of credit (HELOCs) ticked up to 8.65 percent July 12, according to Bankrate’s survey of large lenders, a high point for 2023 so far.

HELOCs come with variable interest rates, which change based on the prime rate, in turn tied to Federal Reserve policy. The Fed announced last month a pause to its rate-hiking spree, but also left open the likelihood for more increases at its next meeting at the end of July.

“As long as the Fed is active, HELOC rates are going to continue to march higher,” says Greg McBride, chief financial analyst for Bankrate.

HELOC rates can also change because one or more home equity lenders markets an especially generous rate. That’s one reason why it often pays to search around for HELOC offers, at least for a lower introductory rate.

HELOCs are still more attractively priced compared to unsecured loans, which are averaging a rate of approximately 11 percent. If you’re looking to finance a renovation and have equity to tap, a line of credit could be less expensive than a home improvement loan

A line of credit isn’t the only way to leverage your home’s equity. Another option: home equity loans, or second mortgages, which come with fixed interest rates. As of July 12, the 15-year home equity loan rate averaged 8.48 percent, while the 10-year equity loan rate averaged 8.42 percent, according to Bankrate’s survey.

How to get the best HELOC rate

When shopping for a HELOC, look for a competitive interest rate, repayment terms that meet your needs and minimal fees. Loan details presented here are current as of the publication date. Check the lenders’ websites for more current information. The top lenders listed below are selected based on factors such as APR, loan amounts, fees, credit requirements and broad availability.

Before you start shopping for a HELOC, make sure you meet lenders’ requirements. Then, take some time to improve your credit score. If you carry a big credit card balance, pay it down. If your auto loan note is almost done, you might pay it off a month or two early. You might also make a few additional mortgage payments to increase your home equity.
 
Once everything is in order, shop around. To find the best HELOC rate, compare multiple lenders — a rule of thumb is to get quotes from at least three. Remember, the rate is important, but it’s not the only factor you should consider. Competing HELOC rates are likely to be close, so be sure to also scrutinize fees and terms to get a sense of the APR, and make sure you’re not comparing apples to oranges.

 

Best home equity line of credit (HELOC) rates in July 2023

LOAN TYPE LOAN AMOUNT LOAN TERM CURRENT APR BEST FOR
Third Federal Savings and Loan
 $10,000–$200,000 10-year draw, 30-year repay 7.24% Long repayment terms
Bethpage Federal Credit Union
 Up to $500,000 10-year draw, 20-year repay 7.74% Fixed-rate options
Bank of America
 $15,000–$1 million 10-year draw, 20-year repay Starting at 6.74% Low fees
Flagstar Bank
 $10,000–$1,000,000 10-year draw, 20-year repay Starting at 8.24% Good credit
Figure
 $15,000–$400,000 5–30 years Not specified Fast funding
Citizens
 Starting at $5,000 10-year draw, 15-year repay Not specified Low loan amounts
BMO Harris Bank
 $25,000–$150,000 5-20 years Starting at 6.24% Different loan options
Lower
 $15,000–$350,000 10-year draw, unspecified repay Not specified Quick approval
PenFed Credit Union
 $25,000–$500,000 10-year draw, 20-year repay Starting at 8.375% Flexible membership requirements
PNC
 $10,000–$1 million 5-30 years (except in TN, where terms are 5-20 years) Not specified Borrowing options
TD Bank
 Starting at $25,000 Not specified Starting at 8.09% In-person service
 

Note: The above APRs are current as of May 19, 2023. The exact APR you might qualify for depends on your credit score and other factors, such as whether you're an existing customer or enroll in auto-payments.

 

Methodology

Bankrate’s experts regularly research, review and rate home equity lenders to help you objectively compare and choose a lender that fits your needs. To determine a home equity lender’s Bankrate Score, Bankrate rates lenders on a scale of one to five stars — with five the highest rating — based on a variety of factors relating to the lender’s products and services. To assign our ratings, we assessed each home equity lender across three core areas-

  • Availability: The minimum loan amount, time to approval, days to close, minimum draw requirement, minimum credit score and loan types offered
  • Affordability: The minimum APR, intro APR, discounts for auto-payers and fees
  • Borrower experience: Online application availability, online account access, customer support options, auto-payment and app availability.
View our full methodology here.

What is a home equity line of credit, or HELOC?

A HELOC is a variable-rate home equity product that works like a credit card — you have access to a credit line that you can draw from and pay back as needed. HELOC rates are tied to a benchmark interest rate. As the prime rate moves up or down, so does your HELOC rate. Payments vary depending on the interest rate and how much money you have used.

With a HELOC, you’re given a line of credit that’s available for a set time frame (known as the draw period), usually up to 10 years. While most HELOCs have an interest-only draw period, you can make both interest and principal payments to pay off the line of credit faster.

When the line of credit’s draw period expires, you enter the repayment period, which can last up to 20 years. You’ll pay back the outstanding balance that you borrowed, as well as any interest owed. A lender may allow you to renew the credit line.

What is a good HELOC rate?

Home equity line of credit rates are determined by your financial assets and liabilities, your credit score and broader economic factors outside of your control. Generally speaking, any rate below the average HELOC would be considered a good rate. 

Home equity rates moved up sharply in 2022, reflecting mostly what the Federal Reserve was doing with interest rates — a trend that has continued in 2023, albeit at a slower pace.. That said, lenders often dangle attractive promotional rates to win your business. Just make sure that you’ll be happy with the new (almost certainly higher) rate when it resets in six months to a year.

Who is a HELOC best for?

Because you have the ability to borrow only the amount you need from a HELOC over the draw period, a HELOC works best for people who require access to funds over a number of years — for a series of home improvement projects, for example — and who are comfortable using their homes as collateral.

What should I look for in a HELOC lender?

When you’re shopping for a lender, you should consider a variety of factors. Does the lender’s requirements around loan-to-value and credit score fit your financial profile? Do you prefer doing business with a brick-and-mortar lender or an online company? What are the policies concerning prepayment, refinancing and adjusting the credit line limit? You also should research the company’s geographic availability and consumer reviews.

How do I qualify for a HELOC?

In addition to estimating your home equity, lenders look at your credit history, credit score, income and other debts. Most lenders require a combined loan-to-value ratio (CLTV) of 85 percent or less, a credit score of 620 or higher and a debt-to-income (DTI) ratio below 43 percent to approve you for a home equity line of credit.

How do rising interest rates affect HELOCs?

The Federal Reserve implemented historic rate hikes in 2022 to combat inflation, and has continued raising them, although more modestly in 2023. This action from the Fed has driven HELOC rates higher. “As long as the Fed is active, HELOC rates are going to continue to march higher,” says Greg McBride, Bankrate's chief financial analyst. “The important point for homeowners who have a home equity line is that if the Fed raises interest rates another percentage point, your home equity line is going to go up another point.”

Pros and cons of HELOCs

HELOCs combine relatively low interest rates with the flexibility to borrow what you need when you need it. If you need money over an unpredictable period of time, a line of credit is ideal. However, there are always risks when you take out a loan, especially one that's secured by your home. Here are some of the key considerations for getting a HELOC.

PROS

  • Lets you tap home equity without disturbing the primary mortgage (nice if you’ve locked in a low rate).

     

  • Typically lower upfront costs than home equity loans.

     

  • Lower interest rates than with credit cards.

     

  • Usually low or no closing costs.

     

  • Interest charged only on the amount of money you use.

     

CONS

  • Lenders may require minimum draws.

  • Interest rates can adjust upward or downward.

  • Lenders may charge a variety of fees, including annual fees, application fees, cancellation fees or early closure fees.

  • Late or missed payments can damage your credit and put your home at risk.

HELOC vs. home equity loan

While HELOCs and home equity loans are similar in some ways, they have a few distinct differences. These are some of the key factors you should consider when deciding between a HELOC and a home equity loan.