To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. The rates shown above are calculated using a loan or line amount of $30,000, with a FICO score of 700 and a combined loan-to-value ratio of 80 percent.
Note: The above APRs are current as of November 6, 2024. The exact APR you might qualify for depends on your credit score and other factors, such as whether you're an existing customer or enroll in auto-payments.
National home equity loan interest rate trends
Home equity loan rates rise in early November
Home equity rates increased the first week in November, with the average rate on a 10-year, $30,000 home equity loan and a 15-year $30,000 loan rising to 8.50 percent and 8.42 percent, respectively, according to Bankrate’s survey of large lenders.
Unlike HELOCs, home equity loan rates are fixed. Once you close your loan, your rate will stay the same whether market rates rise or fall (unless you refinance). However, interest rates on new home equity loans do shift in response to economic conditions and influences, including Federal Reserve policy. At its meeting on Sept. 18, the central bank cut interest rates by half a point — the first reduction in years. Another cut followed at the subsequent Fed meeting on Nov. 7, this one by just a quarter-point.
“Borrowers who have equity loans or equity lines of credit should carefully assess their personal financial circumstances to determine whether it is more beneficial to retain their loan with decreasing rates or to consolidate their loans into a single loan at a potentially lower or higher combined rate,” says Jason Obradovich, chief investment officer at New American Funding, a mortgage lender.
Generally, a home equity loan is best when you’re certain of the total lump sum you need and exactly when you’ll spend the money. Home improvements/repairs, debt consolidation and tuition/education expenses were the top three valid reasons homeowners gave for accessing their home equity, according to Bankrate’s Home Equity Insights survey.
“A lot of our customers are part of the “sandwich generation” – they’re taking care of themselves while supporting aging parents and children,” says Michael Tannenbaum, Chief Executive Officer of Figure, an online HELOC lender. “They are paying off their own debt while helping children pay off student loans and helping parents with medical bills. Others may be experiencing the “lock-in effect” of a low-interest mortgage and are looking to fund a renovation, like an ADU (accessory dwelling unit), to support multi-generational living or a new income stream.”
