Average Home Equity Rates
A home equity loan (HEL) is a loan where a borrower gets an amount of money after they provide their house as collateral. A home equity line of credit (HELOC) is a revolving credit line set by the lender and is based on the equity of the home.
Average Home Equity Rates Today
The average rates for a HEL or HELOC for an amount below $25,000 are as follows:
- 15-year fixed: 5.76% average rate and a range of 3.25%-9.50%
- 10-year fixed: 5.50% average rate and a range of 2.99%-11.00%
- 5-year fixed: 5.09% average rate and a range of 2.75%-11.00%
- HELOC: 5.51% average rate and a range of 3.50%-13.25%.
HELOC rates are mentioned by calculating the interest rate at the time of initiation of the credit line. Afterward, these rates are subject to change depending on market conditions.
The credit score is a determining factor behind the rates applicable to both HEL and HELOC. The amount of debt in relation to your income, known as debt-to-income ratio, and your loan-to-value ratio, are also deciding factors for your rates.
Favorable conditions include a low loan-to-value ratio or a high credit score. Note that a high debt-to-income ratio may require a higher rate from you, or may even result in you being precluded from home equity financing.