HELOC Rates Hit 7.09 Percent in September

The average adjustable rate for a home equity line of credit fell to 7.09 percent on Tuesday, September 15, 2026. This figure represents the lowest level recorded in 2026, according to data from Curinos. The national average for fixed-rate home equity loans stands at 7.42 percent. This rate is up from the 2026 low of 7.31 percent recorded in late June.

These benchmarks apply to borrowers with a minimum credit score of 780. They also require a maximum combined loan-to-value ratio below 70 percent. The gap between the two products is 33 basis points. The variable option offers a lower entry cost, while the fixed option provides payment certainty.

Variable rates track the prime benchmark

Most home equity lines of credit use variable interest rates. These rates are tied to an external benchmark, typically the prime rate. The prime rate is the baseline charge banks apply to their most creditworthy customers. When the benchmark moves, the interest rate on the line of credit follows.

Lenders add a margin to the benchmark to cover risk. This margin varies by borrower profile. Factors such as credit score, debt-to-income ratio, and loan-to-value ratio determine the size of the margin. Lower-risk borrowers receive smaller margins, resulting in lower total rates.

Fixed rates lock in long-term costs

Home equity loans generally carry fixed interest rates. The rate remains constant for the entire duration of the loan. This structure mirrors that of a traditional primary mortgage. Borrowers pay the same amount each month, regardless of market fluctuations.

Both product types are influenced by the federal funds rate and broader economic conditions. However, the fixed rate on a home equity loan shields the borrower from immediate interest rate hikes. Fixed-rate lines of credit exist but are significantly less common in the market.

Qualification standards remain strict

Lenders require a FICO credit score of at least 680 for approval. Borrowers must also demonstrate a history of good credit and sufficient monthly income. An appraisal is necessary to determine the current market value of the property.

Homeowners must possess at least 15 percent to 20 percent equity in the house. The debt-to-income ratio must not exceed 43 percent. Proof of active homeowners insurance is also mandatory. Origination fees and closing costs vary by institution, so comparing total expenses is essential. GN auto markets/bonds: interest rates data confirms these structural requirements across major lenders.