HELOC and Home Equity Loan Rates Hold Near One Year Lows

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Издатель Feb 22, 2026

Home equity borrowing costs remain near their lowest levels in the past year, but a sharp drop in rates does not appear likely anytime soon.
As of February 19, 2026, the average HELOC rate is 7.23%, while the average home equity loan rate stands at 7.44%. These averages generally apply to borrowers with strong credit and lower combined loan-to-value ratios.
Unlike traditional mortgages, HELOCs and home equity loans are closely tied to the prime rate, which is currently 6.75%. Most HELOCs are priced as the prime rate plus a lender margin. That means rates are unlikely to fall meaningfully unless the Federal Reserve cuts its benchmark rate.
For many homeowners, second mortgages are attractive because they allow access to equity without refinancing a primary mortgage locked in below 4%. With refinance rates near 6%, giving up a low first mortgage often does not make financial sense.
A HELOC offers flexible access to funds but usually carries a variable rate, meaning payments can rise over time. A home equity loan provides a lump sum with a fixed rate and predictable payments. The right choice depends on how the funds will be used and how long the borrower plans to carry the balance.
Looking ahead, if the Federal Reserve begins cutting rates later in 2026, HELOC rates could ease gradually. However, experts do not expect a rapid decline.
For now, borrowers should focus on comparing lenders, understanding margins over prime, and reviewing repayment terms carefully. Home equity can be a useful financial tool — but only when it fits into a clear, long-term plan.
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