Current Home Equity Loan Rates

Current home equity loan rates are a little bit lower than current HELOC rates.

If you're looking to fund a home improvement project or repair, a home equity loan can be an affordable way to do so. Compared with other options, interest rates on home equity loans are usually better than personal loan rates and credit card rates.

Current home equity loan rates

We track home equity loan rates from 11 different lenders to help you understand the range of rates that are available to borrowers right now. 

How are home equity loan rates determined?

Factors influencing home equity loan rates

As with mortgages and other consumer interest rates, home equity loan rates are affected by both the borrower's financial profile as well as larger, macroeconomic forces.

When you get a home equity loan rate quote from a mortgage lender, it will be determined by factors including:

• Your credit score
• Your debt-to-income ratio
• The amount of equity you have in your home, and how much of it you want to borrow
• The loan's term length
• Which state you live in
• Current economic conditions

Fixed vs. variable home equity loan rates

Home equity loans typically have fixed rates, meaning your rate will stay the same until you pay off the loan. Home equity lines of credit, or HELOCs, usually come with variable rates where the rate changes periodically.

Comparing current rates

Because home equity loans are a type of secured debt, they often have lower rates than many other types of debt, like credit cards. 

But rates can vary a lot from one home equity loan lender to the next. It's important to shop around and get multiple rate quotes to compare.

What is a home equity loan?

Definition and overview

A home equity loan is a type of second mortgage that lets you borrow from the equity you have in your home.

How a home equity loan works

Home equity loans work by leveraging the wealth you've built in your home. If you have a mortgage, you don't own your home outright. Instead, a portion of the home's value is tied up with the loan. The part that isn't is called equity.

To determine how much equity you have in your home, take your home's value and subtract your current mortgage balance from that. So, if your home is worth $500,000 and you still owe $200,000 on your mortgage, you have $300,000 in equity.

You'll only be able to borrow a portion of your equity. Lenders typically like to see a maximum CLTV between 80% and 90%, but it varies. A loan-to-value ratio (LTV) is the ratio of how much you owe on your mortgage versus what your house is worth. A combined loan-to-value ratio (CLTV) includes all of the loans you have on your property, including first and second mortgages.

You'll receive the funds for your home equity loan in a lump sum, and then you'll pay it back in equal installments over the life of the loan.

The best home equity loans

The best lenders for home equity loans have no or low fees, multiple term length options, high maximum CLTVs, and other beneficial features like customer discounts. Here are the best home equity loan lenders as chosen by Business Insider editors in 2025.

• U.S. Bank Home Equity Loan: Best overall
• Navy Federal Credit Union Home Equity Loan: Best overall, runner-up
• Discover Home Equity Loan: Best for no fees
• Flagstar Home Equity Loan: Best for large loan amounts
• Connexus Home Equity Loan: Best for small loan amounts

Compare the top home equity loans

Best overall: U.S. Bank

U.S. Bank is a strong lender overall for home equity loans, with no closing costs, a wide range of loan amounts, and a discount for existing customers. It ranks high in customer satisfaction and has many positive online customer reviews.

If you have a U.S. Bank checking or savings account, you could get a 0.5% rate discount if you set up automatic payments.

What to look out for: U.S. Bank home equity loans aren't available in Delaware, South Carolina, or Texas

Best overall, runner-up: Navy Federal Credit Union

Navy Federal Credit Union is a great home equity loan lender for those who qualify for a Navy Federal membership. It offers competitive mortgage rates, a good selection of term lengths, and no fees.

This lender is a strong option for VA loan borrowers, who might not have a ton of equity built up if they put 0% down on their home when they purchased it. It also has good online customer reviews.

What to look out for: Navy Federal is our "best overall" runner-up because, while it's a very strong lender overall, you have to be a member of Navy Federal Credit Union to get a loan with this lender. To qualify, you need to be a member of the military, a veteran, a family member of someone who has served, or a Department of Defense civilian.

Best for no fees: Discover

Discover is an affordable home equity loan lender that doesn't charge any closing costs, and it will also pay any third-party costs you incur.

Discover offers home equity loans with 10-, 15-, 20-, and 30-year terms and loan amounts from $35,000 to $300,000.

What to look out for: Not available in Iowa or Maryland. You'll need at least a 680 credit score to qualify.

Best for large loan amounts: Flagstar Bank

Flagstar Bank is a good option for borrowers who need larger loan amounts, since you can get a home equity loan for up to $1 million. It ranks high in customer satisfaction and has many positive online customer reviews.

If you qualify, you can get a home equity loan from Flagstar for any amount between $10,000 and $1 million. It also charges no lender fees, though you still may need to pay some third-party fees at closing.

If you have a bank account with Flagstar, you could get a 0.25% rate discount if you set up automatic loan payments from your account.

What to look out for: Flagstar home equity loans aren't available in Texas.

Best for small loan amounts: Connexus Credit Union

Connexus Credit Union offers smaller loan amounts, shorter terms, and a higher max CLTV, making it an affordable choice for borrowers looking to fund smaller projects or keep their interest costs down.

With Connexus Credit Union, borrowers can get a home equity loan with a term of just five years with loan amounts as low as $5,000. If you want to limit your overall interest costs, a shorter term is often a good choice because you'll spend less time paying back the loan.

What to look out for: Connexus doesn't disclose whether it charges its own closing fees, but says borrower closing costs can range from $175 to $2,000. Connexus home equity loans aren't available in Maryland, Texas, Hawaii, or Alaska.

Key factors to consider when choosing a home equity loan

Interest rates

Your interest rate will determine how much you'll pay to borrow from your home's equity. The lower your rate, the lower your monthly payment will be.

Reach out to at least two or three different lenders you're interested in to get quotes so you can compare costs. Be sure to consider both the rates you're offered as well as any fees the lender charges.

Loan fees

Home equity loans come with some closing costs, but you could pay more or less depending on what lender you work with. Some lenders charge their own fees on top of third-party closing costs like appraisal fees.

Prepayment penalties

Depending on the lender, you may have to pay a fee if you end up paying off your home equity loan early. Not every lender charges a prepayment penalty, so be sure to ask your lender what its rules are.

Term lengths

You may be able to choose a term length as short as five years or up to 30 years. Think about what term length makes the most sense for you and look for lenders that offer that length as an option.

Loan amounts

Minimum and maximum loan amounts vary by lender, so consider how much you're looking to borrow as you shop for the right lender.

How to get the best home equity loan rates

Improving your credit score

Your credit score is a major factor in determining the rate you'll get on any loan, including a home equity loan. You can build a good credit score over time by making on-time payments toward debts you owe and keeping your credit utilization low.

One relatively quick way to improve your credit score is to pay down credit card debt, since that will lower the amount of available credit you're using. You can also contact your credit card issuer and see if you're eligible for a credit line increase, as this would also lower your utilization rate. 

Shopping around for the best rates

If you're looking to get a home equity loan, you can potentially save a lot of money by shopping around with three or four different lenders to compare rates. But be sure to consider the overall picture as well. A lender that has low rates but high closing costs might ultimately not be the best fit. 

Consider the loan term

The shorter the loan term, the lower your rate will be. However, many borrowers like longer terms because it gives them more time to pay back the loan, resulting in lower monthly payments. 

Pros and cons of home equity loans

Advantages of home equity loans

One benefit of home equity loans is that they're predictable. You can borrow money at a fixed interest rate with a monthly payment that will stay the same throughout the life of the loan. 

Because they're tied to your home, home equity loans have lower rates than unsecured types of debt, like a personal loan or credit card. You may also be able to borrow more, depending on how much equity you have. 

Plus, if you plan to use the home equity loan to finance a home improvement project or repair, you can deduct the loan's interest on your taxes.

Potential drawbacks of home equity loans

Taking out additional debt on your home can be risky, since your home equity loan lender can foreclose if you stop making payments.

Compared to unsecured loan alternatives, a home equity loan comes with additional costs and requirements that can make it a less convenient option if you're in need of funds. You'll need to have enough equity in the home to qualify, and you'll be required to pay closing costs.

Additionally, depending on how current mortgage rates are trending, it could be cheaper to get a cash-out refinance to tap into your home's equity. But this only makes sense if you can get a lower rate on the new mortgage than what you're currently paying. 

Comparing home equity loan rates to other loan options

Home equity loan vs. HELOC

Like home equity loans, HELOCs are a type of second mortgage. A home equity loan differs from a HELOC in that HELOCs operate more like a credit card.

With a HELOC, you'll borrow against a line of credit and accrue interest at a variable rate during the draw period. During that time, you can borrow as little or as much as you need, up to the total loan amount. You'll only pay interest on what you borrow.

When you're in the HELOC draw period, you'll need to make payments toward the interest you accrue. Once the draw period is over, you'll no longer be able to borrow from the HELOC, and you'll begin making principal and interest payments to pay back what you owe.

HELOCs give you more flexibility to borrow exactly what you need and only pay interest on what you've borrowed. But because they come with variable rates, the amount you pay each month could change over time. 

Home equity loan vs. mortgage refinancing

You can also use your regular mortgage to tap into your home's equity. To do this, you'll get a type of mortgage refinance called a cash-out refinance. 

With a cash-out refinance, you'll replace your current mortgage with a new, larger one. The new loan pays off your existing mortgage, and you receive the remaining amount of the loan in cash. You'll need to keep some of your equity in the home — generally at least 20% of the home's value. 

Cash-out refinancing, like other types of mortgages, can come with hefty closing costs. These costs may range from 3% to 6% of the loan amount. 

First mortgages like cash-out refinances have lower rates compared to other types of loans. But remember that you'll be paying interest on the full amount you owe on your home, not just the portion of equity you want to borrow. Unless you can get a rate that's lower than your current mortgage rate, you're probably better off with another type of financing.

Home equity loan vs. personal loan

A personal loan is a type of unsecured installment loan. Though these loans typically have higher interest rates compared to home equity loans, you don't have to sacrifice your home equity to get the loan funds. The application process for personal loans is often faster as well, meaning you can get your cash more quickly.

But because personal loans have shorter term lengths, you'll have a higher monthly payment. 

Applying for a home equity loan

Required documentation

The documentation you'll need for a home equity loan is similar to what you'll need for a regular mortgage application. This includes documents showing how much you earn, like pay stubs and W2s. The lender will also do a hard check of your credit.

You'll likely also be asked for documentation for your home and current mortgage, like recent mortgage statements or property tax information. 

The application process

Before you apply for a home equity loan, you'll want to determine how much equity you have in your home. Sites like Realtor.com, Zillow, and Redfin have tools that can help you get an estimate of what your house is currently worth.

Once you submit an application with a lender, the lender will order an appraisal. Home appraisals determine how much your home is actually worth according to current market conditions and recent similar home sales in your area.

Then, the lender will look over your application and the appraisal and determine how much it's willing to lend you. Once you've got final approval, you'll close on the loan and receive your money. 

Current home equity loan rates FAQs

Molly Grace

Mortgage Reporter

Molly Grace is a mortgage reporter for Business Insider with over six years of experience writing about mortgages and homeownership. ExperienceIn addition to her daily mortgage rate coverage, Molly also writes mortgage lender reviews and educational articles on homebuying and analyzes data and economic trends to give readers actionable and up-to-date information about the housing market.She also tracks affordable mortgage and down payment assistance programs offered throughout the country to keep her readers informed of homebuyer programs available to them. Before Business Insider, Molly was a blog writer for Rocket Companies and helped to create Rocket Mortgage’s Shorty Award-winning podcast Home. Made.Molly is passionate about covering personal finance topics with empathy. Her goal is to make homebuying knowledge more accessible, especially for groups that may think homeownership is out of reach. ExpertiseMolly is an expert in the following topics:

• Mortgages and mortgage lenders
• Home equity
• The housing market
• The economy and the forces that impact mortgage rates
• Budgeting and saving
• Credit
• Insurance
• Retirement savings

EducationMolly earned a bachelor's degree in journalism from Indiana University. She is based in Michigan and has a dog and two cats. 

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