Home equity loan rates average 9.65 percent in September 2026

The national average interest rate for a fixed-rate home equity loan is 9.65 percent. This figure reflects data from September 9, 2026. The benchmark assumes a loan-to-value ratio of 80 percent. Borrowers must maintain a FICO score of at least 620.

Homeowners use these products to access accumulated equity. A home equity loan provides a single lump sum. A Home Equity Line of Credit offers a revolving credit line. Both use the property as collateral. This security typically lowers rates compared to unsecured debt.

Key differences between loan types

A home equity loan disburses funds in one transaction. Repayment occurs via fixed monthly installments. The term can extend up to 30 years. A HELOC functions like a credit card. Borrowers draw funds only when needed. Interest accrues solely on the used balance.

HELOCs consist of two distinct phases. The draw period allows repeated borrowing and repayment. This phase lasts up to 10 years. The repayment period follows the draw period. No new borrowing is permitted during this stage. The remaining balance must be paid down.

Factors influencing individual rates

Individual rates vary based on credit profiles. Debt-to-income ratios also play a role. The specific loan amount and term affect pricing. The property type determines the final rate. Second homes or investment properties face higher rates. Borrowers with negative equity face stricter terms.

Benefits and risks of borrowing

Secured debt usually carries lower interest rates. Personal loans often cap at $100,000. Home equity products allow for larger sums. The primary risk involves property loss. Defaulting can trigger foreclosure. Lenders may sell the home to recover funds. Credit scores suffer significantly in these cases.