Current home equity loan rates for July 2025

What are the current interest rates for home equity loans?

Comparing home equity loan interest rates

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 July 30, 2025. 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 - July 30, 2025

Home equity loan rates flat as Fed unchanged

Home equity loan rates saw little movement this week, as the Federal Reserve held its key interest rate steady. The average rates on the $30,000 5- and 15-year loans were unchanged this week, at 8.25 percent and 8.34 percent, respectively, according to Bankrate’s survey of lenders. Meanwhile, the comparable 10-year loan inched up slightly, rising one basis point to 8.41 percent.

Unlike HELOCs, home equity loan interest 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 the Fed’s monetary policy.

At its latest meeting July 29 and 30, the Fed held interest rates as-is for the fifth time in a row. Defying pressure from President Trump to lower rates, Fed Chair Jerome Powell says the central bank is continuing to keep a close eye on how tariffs impact the economy. 

For homeowners planning to finance a major expense, like renovations, choosing the right home equity product depends on both your financial goals and the interest rate environment.

"A home equity loan might be a good borrowing option when interest rates aren’t expected to fall, but your existing mortgage rate is lower than the current rates on home equity loans or lines of credit,” says Stephen Kates, financial analyst at Bankrate. “These conditions would preclude a cash-out refinance.”

Factors that determine your home equity loan rate

There are several factors—some personal, some tied to broader economic trends—that affect your home equity loan rate: 

• Federal Reserve policy: When the Fed raises or lowers the benchmark federal funds rate, it kicks off a chain reaction among interest rates: It first affects the prime rate, which in turn is used to price home equity loans. So when the Fed hikes rates, the cost of new home equity loans often increases, and vice versa. (Existing home equity loan rates remain at their current fixed levels). 
• Credit score: Lenders use a borrower’s credit score to determine how strong or weak – financially speaking – a loan candidate is. The higher the score, the more creditworthy the borrower — and the lower the interest rate they’ll be offered.
• Debt-to-income (DTI) ratio: DTI measures your monthly income relative to your monthly debts. Lenders look for a lower DTI as it shows you are able to manage your obligations, and have much more coming in than going out on a regular basis. 
• Loan amount and term: How much you are borrowing and for how long can impact the rate the lender offers you. Larger loans tend to charge less interest, because they’re generating more income for the lender overall. Generally, the longer the loan term, the higher the interest rate, because the risk of borrower default is bigger over an extended period. 
• Market competition: Offering home equity loans is a business like any other. Lenders adjust rates to match what others in the field are doing or to attract borrowers. 

How to choose the best home equity loan for you

Whether you want a competitive interest rate, favorable repayment terms, or minimal fees, finding a home equity loan that meets all of your needs can be challenging. Here are five things to look for when selecting the right loan for you:

• Figure out how much you need to borrow. Before applying for a home equity loan, you should have a financial goal. How much of an amount do you need – exact sum, plus a cushion – and for what purpose? Some lenders offer home equity loans as big as $500,000, while others have a max of $100,000. 
• Make sure you have enough equity. Take your home’s current value and subtract it from what you owe on your mortgage. The result is your equity (roughly). Some lenders only let you tap up to 80 percent of your home’s value, while others go up to 90 percent or higher. 
• Compare your credit score to lender requirements. Before applying, it’s worth checking what credit score minimums the lender sets, especially if your score is on the low side. Some lenders accept applications from borrowers with credit scores in the 600s, while others don’t.
• Weigh each lender’s offer. Don’t go with the first offer you come across. Compare offers from at least three lenders, as rates, fees and borrowing limits can vary widely. The annual percentage rate (APR) on the loan is very important to consider, as it reflects the combined impact of rates and fees.
• Read the fine print. Before signing the agreement, avoid expensive surprises and make sure you understand all the aspects of the loan, from closing costs to prepayment penalties. 

Learn more: Pros and cons of home equity loans

How different interest rates impact your monthly payments

Finding the best interest rate for a home equity loan is important, as even a quarter-point difference can impact your repayments. To demonstrate, here are the amounts you’d owe each month on a $30,000 loan within the current range of rates:

Alternatives to a home equity loan

A home equity loan is not the right choice for every borrower. Depending on what you need the money for and the stage in your life, one of these options may be a better fit:

Home equity line of credit (HELOC): Like a big credit card, a HELOC allows you to withdraw money at different times, up to a certain limit. You pay interest only on the withdrawals at a variable rate. Generally speaking, if you’ve got a regularly recurring expense or are planning on doing multiple home improvement projects over an extended period, a HELOC may be the better option for you. 

Reverse mortgage: With a reverse mortgage, you receive an advance on your home equity that you don't have to repay until you leave the home. However, these often come with many fees, and variable interest accrues continuously on the money you receive. These are also only available to older homeowners (62 and up for a Home Equity Conversion Mortgage, the most popular reverse mortgage product, or 55 and up for some proprietary reverse mortgages).

Personal loans: Like home equity loans, personal loans have fixed interest rates and disburse money in a lump sum. However, they are unsecured debt: They don’t use your home as collateral. On the downside, they tend to have higher interest rates, their terms are typically shorter, and the amounts are smaller. 

Next steps to getting a home equity loan

Before you start applying for a home equity loan, here are some home equity resources to prepare you for the process:

FAQs about home equity loans

Meet our Bankrate experts 

Written by: Linda Bell, Senior Writer, Home Lending 

For more than two decades, I have covered the housing market, including in depth coverage of the 2008 housing market collapse. To increase my knowledge of home equity and HELOCs, I earned a Certified HELOC Specialist designation from the National Association of Mortgage Underwriters (NAMU). Throughout my career, I have won more than two dozen awards, most notably from the National Association of Real Estate Editors (NAREE) and the New York Association of Black Journalists (NYABJ) for an investigative series I produced on minorities and the housing industry. 

Read more from Linda Bell

Edited by: Troy Segal, Senior Editor, Home Lending 

As a senior editor on Bankrate’s Home Lending team, I handle coverage of residential real estate, specializing in the finer points of homeownership, home equity and home-based financing. I hold a Certified Mortgage Underwriter designation from the National Association of Mortgage Underwriters. Throughout my career, I’ve also written and edited articles on a variety of personal finance, investment and wealth management topics. I was named one of Fixr.com’s “30 Top Home Improvement Journalists” in 2024. 

Read more from Troy Segal 

Reviewed by: Mark Hamrick, Senior Economic Analyst 

I am an award-winning business and financial journalist, with decades of experience in the news business. I can often be found on television, radio and in print, where I make complex financial topics easy to understand. I have also helmed two major journalism organizations and am a champion for financial literacy and press freedom around the globe. 

Read more from Mark Hamrick