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Tag: home equity loan

  • HELOC and home equity loan rates Saturday, January 24, 2026: Why now is a smart time to tap home equity

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    HELOC and home equity loan rates range from near 7% to 9% nationally, settling in with an average near 7.5%. Second mortgage rates are at a multi-year low, making this an opportune time to cash out some of the value in your home.

    According to Curinos data, the average monthly HELOC rate has fallen to 7.25%, down 19 basis points from one month ago. The national average rate on a home equity loan is 7.56%, down three basis points.

    Both rates are based on applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio (CLTV) of less than 70%.

    The Federal Reserve estimates that homeowners have $34 trillion dollars of equity locked within the walls of their homes. With mortgage rates refusing to budge, homeowners with home equity and a favorable primary mortgage rate may feel the frustration of not being able to access that growing value in their home. A second mortgage in the form of a HELOC or HEL can be a workable solution.

    Home equity interest rates are different from primary mortgage rates. Second mortgage rates are based on an index rate plus a margin. That index is often the prime rate, which has just fallen recently to 6.75%. If a lender added 0.75% as a margin, the HELOC would have a rate of 7.50%.

    A home equity loan may have a different margin because it is a fixed-interest product.

    Lenders have flexibility with pricing on a second mortgage product, such as a HELOC or home equity loan, so it pays to shop. Your rate will depend on your credit score, the amount of debt you carry, and the amount of your credit line compared to the value of your home.

    And average national HELOC rates can include “introductory” rates that may only last for six months or one year. After that, your interest rate will become adjustable, likely beginning at a higher rate.

    Again, because a home equity loan has a fixed rate, it’s unlikely to have an introductory “teaser” rate.

    The best HELOC lenders offer low fees, a fixed-rate option, and generous credit lines. A HELOC allows you to easily use your home equity in any way and in any amount you choose, up to your credit line limit. Pull some out; pay it back. Repeat.

    Look for a lender offering a below-market introductory rate. For example, FourLeaf Credit Union is currently offering a HELOC APR of 5.99% for 12 months on a line up to $500,000. That introductory rate will convert to a variable rate. When shopping for lenders, be aware of both rates.

    Also, pay attention to the minimum draw amount of a HELOC. The draw is the amount of money a lender requires you to initially take from your equity.

    The best home equity loan lenders may be easier to find, because the fixed rate you earn will last the length of the repayment period. That means just one rate to focus on. And you’re getting a lump sum, so no draw minimums to consider.

    And as always, compare fees and the fine print of repayment terms.

    Rates vary from one lender to the next — and by where you live. You may see rates from nearly 6% to as much as 18%. It really depends on your creditworthiness and how diligent a shopper you are. The national average for a HELOC is 7.25%, and for a home equity loan is currently 7.56%.

    For homeowners with low primary mortgage rates and a significant amount of equity in their house, it’s likely one of the best times to obtain a HELOC or home equity loan. You don’t give up that great mortgage rate, and you can use the cash drawn from your equity for things like home improvements, repairs, and upgrades.

    If you withdraw the full $50,000 from a line of credit on your home and pay a 7.50% interest rate, your monthly payment during the 10-year HELOC draw period would be about $313. That sounds good, but remember that the rate is usually variable, so it changes periodically, and your payments will increase during the 20-year repayment period. A HELOC essentially becomes a 30-year loan. HELOCs are best if you borrow and repay the balance within a much shorter period.

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  • HELOC and home equity loan rates today, January 9, 2026: A new low mark for HELOCs

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    The national average rate for home equity lines of credit (HELOC) fell to a new low in well more than a year. The average home equity loan rate is down three basis points from last month.

    According to Curinos data, the average HELOC rate is 7.25%, down 19 basis points from last month. The national average rate on a home equity loan is 7.56%, three basis points lower than one month ago.

    Both rates are based on applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio (CLTV) of less than 70%.

    Homeowners have an impressive amount of value tied up in their houses — nearly $36 trillion at the end of the second quarter of 2025, according to the Federal Reserve. That’s the largest amount of home equity on record.

    With mortgage rates remaining in the low-6% range, homeowners are unlikely to let go of their primary mortgage anytime soon, so selling a house may not be an option. A cash-out refinance might not be workable either. Why give up your 5%, 4% — or even 3% mortgage?

    Accessing some of that value with a use-it-as-you-need-it HELOC or lump-sum home equity loan can be an excellent alternative.

    MORE: Here are our picks for the best home equity loan lenders.

    Home equity interest rates are calculated differently from mortgage rates. Second mortgage rates are based on an index rate plus a margin. That index is often the prime rate, which is 6.75% following the last Federal Reserve rate cut on December 10. If a lender added 0.75% as a margin, the HELOC would have a variable rate of 7.50%.

    A home equity loan may have a different margin, because it is a fixed-interest product.

    Lenders have flexibility with pricing on a second mortgage product, such as a HELOC or home equity loan. Your rate will depend on your credit score, the amount of debt you carry, and the amount of your credit line compared to the value of your home. Shop two or three lenders to find your best interest rate offer.

    With three rate cuts from the Federal Reserve in 2025, the prime rate has fallen to 6.75%. As a result, home equity lenders have been repricing their products.

    Today, FourLeaf Credit Union is offering a HELOC APR of 5.99% for 12 months on lines up to $500,000. That’s an introductory rate that will convert to a variable rate at a later date.

    As the offer proves, lenders will not only lower their adjustable rates, but their introductory rates too, following the Fed’s lower-rate policy.

    When shopping for lenders, be aware of both rates. And as always, compare fees, repayment terms, and the minimum draw amount. The draw is the amount of money a lender requires you to initially take from your equity.

    The best home equity loan lenders may be easier to find, because the fixed rate you earn will last the length of the repayment period. That means just one rate to focus on. And you’re getting a lump sum, so no draw minimums to consider.

    Rates vary significantly from one lender to the next. You may see rates from 6% to as much as 18%. It really depends on your creditworthiness and how diligent you are as a shopper. Currently, the national average for a HELOC is 7.25%, and for a home equity loan it’s 7.56%.

    Interest rates fell for most of 2025. They will likely keep dipping lower this year. So yes, it’s a good time to get a second mortgage. And with a HELOC or a HEL, you can use the cash drawn from your equity for things like home improvements, repairs, and upgrades.

    If you withdraw the full $50,000 from a line of credit on your home and pay a 7.50% interest rate, your monthly payment during the 10-year draw period would be about $313. That sounds good, but remember that the rate is usually variable, so it changes periodically, and your payments will increase during the 20-year repayment period. A HELOC essentially becomes a 30-year loan. HELOCs are best if you borrow and repay the balance within a much shorter period of time.

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  • Higher Hotel And Car Supply Chain Pressuring Package Travel Options

    Higher Hotel And Car Supply Chain Pressuring Package Travel Options

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    Supply chain is a term that used to be used only by those in business or logistics. Today, we hear this daily as to why baby formula is not available, or why containers are stacked up in a port. At Dario’s Italian restaurant in Boston’s Logan airport, on a recent visit they had no cream delivered so could not make some of the items on the menu. The waiter said “you know, the supply chain problem.” Airlines have used supply chain excuses to explain late delivery of aircraft or why they can’t meet a pre-anticipated level of capacity. In many things we buy, we realize our dependency on supply chains when things are not available as we’d expect.

    Airline travelers are facing supply chain problems in other areas, too. Package tours, meaning vacations bought that include a flight, hotel, maybe a car, and experiences, have been affected because not all opportunities have been available or the prices have been especially high. While leisure travel in general was strong in the summer and has stayed strong into the fall, this category of leisure travel is challenged and represents a small risk to a full airline demand recovery.

    Important Segment Of Leisure Travel

    People travel for leisure for many reasons. Package Tours make up a small segment of all leisure travel, but this segment is more important to certain destinations. About 30% of travelers say that they want to pack a lot experiences into their vacation. For these people, a package tour can be the way to fill the days. In 2019, my family took a two-week vacation to Vietnam. We worked with a local travel agency who arranged our internal flights, all hotels, and made us aware of many different activities. We likely could have arranged this all ourselves had we taken time to explore and search, but buying the tour was worth it for us and we had a great and memorable time.

    Especially internationally, package tours can be way to see things and get access that would be difficult or more expensive another way. When hotels are not available or certain activities are not available due to supply chain shortages, this could change the desire to visit a place. While the amount of travel or number of travelers may not change, these supply chain challenges could affect international leisure destinations the most and correspondingly the airlines that fly these routes.

    Staffing Issues Affecting Hotels And Resorts

    One of the biggest issues affecting package rates is the sharp increase in hotel and resort rates. One industry executive stated that while the employee shortages were more acute last year, many properties have kept the higher rates put in place at this time even as some of the pressures have waned. Like airlines, price elasticity affects hotels and resorts, meaning that higher rates reduce the demand. While the “revenge travel” idea may mute this somewhat, eventually higher rates will dampen demand.

    Consumers often decide a trip based on the total price. Higher prices for air fares and hotel rates means one of two things: some locations will suffer absolute volume, and others will get visits but for shorter stays. For both airlines and hotels, one advantage of a package price is that the amount paid for the air fare and the hotel is opaque to the buyer. This allows the airline or the hotel to offer promotional rates to fill otherwise unused capacity, but in a way that doesn’t invite a competitive match or dilute the non-packaged “rack rates.’’

    Car Rentals Still Challenged

    Car rental companies returned many vehicles just after the pandemic hit, and still are facing shortages in vehicles in many locations. Just as new cars are facing supply problems, due to chips or other supply chain issues, this has meant that rental companies often don’t have enough vehicles to meet demand. On a recent trip to Florida, we were told that on check-in that no cars would be available for two to three hours. When we walked out to the car area were able to take a Ford F150 that had just been returned, even though we had rented a mid-size.

    Another industry executive referred to car rental rates as staying “incredibly inflated.” This, like the flight and hotel issue, adds more uncertainty to the package opportunity that likely will be more highlighted at busy holiday times. It also means that ride share, like Uber or Lyft, will likely to be used more often for some trips. Like the hotels are doing, it is likely that car rental companies will test keeping their higher rates even as they bring car inventories back to demand-satisfying levels.

    Housing Prices Can Affect This Travel

    One often under-appreciated aspect of package vacations is the relationship with housing prices and valuations. For some demographics, home equity loans are the primary way these vacations are funded. When housing values are high and interest rates are low, there is more equity to tap in a loan to take this kind of family trip. With interest rates shooting up and housing values stalling, this limits the ability to take such a loan or raise the rates to a point uncomfortable for many potential buyers.

    This doesn’t affect all buyers of these products, but affects some of it. The industry has seen this in other environments, like in the housing crisis of 2008-2011. During this time, some of the most price-sensitive travel just vanished as people’s source of funding evaporated.

    Contributes To Revenue Uncertainty

    In the recent Delta Airline’s earnings release, CEO Ed Bastian spoke bullishly about the demand environment. He focused on the normal drop off from summer to fall not happening, and pointed out that there are no signs demand is weakening. Most of his comments were about business travel and higher-priced leisure travel. While higher-priced leisure may be an industry strength over the next year, there are still many pressures holding back a full volume return of corporate business travel.

    Airline industry revenues may be leveraged more on business and higher-end travel, but the high fixed costs of the industry means that airlines often need to fill in gaps with price-sensitive leisure travelers. When hotel, rental car and other prices for vacationers rise, it adds to the the uncertainty of the revenue environment. While many trends are positive, as Delta pointed out, this strength is not top to bottom and this creates some uncertainty in total revenues. Different airline business models may be more at risk than others for some of these trends.

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    Ben Baldanza, Contributor

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