What are today's home equity loan and HELOC interest rates?

While there are many ways to borrow money, a home equity loan is a great option to consider for homeowners. These loans generally come with lower rates than other personal loans, as you are putting your house up as collateral. 

That's a big deal. After all, the interest rate you pay on a home equity loan or home equity line of credit (HELOC), is one of the most important things to pay attention to. That's because even a small reduction in your interest rate can save you thousands of dollars over the life of the loan. 

But home equity loan rates fluctuate in response to federal funds rate adjustments — so it's important to keep an eye on what the rate trends are for these types of loans. Read on to learn what today's home equity loan and HELOC rates are — and how you can secure the best one.

What are today's home equity loan and HELOC interest rates?

The following rates are current as of January 5, 2024, according to Bankrate's home equity loan and HELOC averages. Note that these are nationwide rates. Average rates vary state by state, typically by one to two percentage points. 

As of January 5, 2023, average national home equity loan rates are:

• Average overall rate: 8.98%
• 10-year fixed home equity loan: 9.08%
• 15-year fixed home equity loan: 9.08%

The average HELOC rate nationwide is 10.16% as of January 5, 2024.

What rate do you qualify for? See today's home equity options to find out!

How to get a good home equity loan or HELOC rate

You can get the best rate available on your home equity loan or HELOC today using these strategies:

Get quotes from different lenders

While average rates can give you an idea of your borrowing costs, rates vary from lender to lender. To find the best rate on the market today, compare rates from at least three different lenders.

"Borrowers should thoroughly evaluate the loan terms, fees and closing costs offered by different lenders," says Mike Qiu, real estate agent and owner of Good As Sold Home Buyers. "Attention must be paid to crucial aspects such as interest rates, repayment periods and any penalties or fees associated with the loan. Comparing multiple offers will help borrowers secure the most favorable terms."

Your current mortgage lender may be a good place to start, but don't stop there. Check with other banks, credit unions and online lenders to see what's available. You can always take what you find back to your current lender to see if they'd be willing to offer something competitive.

Start your search by comparing top home equity rates online now.

Choose the right loan term

The length of your loan term can also affect the interest rate you'll pay. While longer terms can have lower monthly payments, they often come with higher interest rates, which means you'll pay more interest over time.

If you can afford higher monthly payments, a shorter loan term may help you secure a lower interest rate. Of course, it's important to make sure the payment fits within your budget. Consider your financial situation and goals to find the option that works best for you.

Explore today's home equity rates to determine which term is best for you.

Improve your credit score

Your credit score is one of the most important factors in getting a good home equity interest rate. The higher your score, the more likely you are to qualify for a lower rate.

So, check your credit score before applying for a home equity loan or HELOC. If it's less than stellar, taking steps to improve it before applying can help you secure a more attractive rate. These may include paying down outstanding debts, disputing any errors on your credit report and making all payments on time.

The bottom line

While home equity loan and HELOC interest rates can fluctuate, the rates offered on these home equity products are typically still better than other financing options, such as credit cards and personal loans, which makes them a great option to consider when you need access to cash. You can maximize your chances of getting the best rate for your unique situation by shopping around, improving your credit score and comparing rates for different loan terms. With a little time and research, you can make the most of your home equity — no matter where rates are.