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Borrowing money with a variable-rate product can be difficult, as payments can and likely will change over time. And it can be risky when that product leverages your home equity. If you’re ultimately unable to make the payments as agreed to you may jeopardize your homeownership. At the same time, in today’s elevated interest rate environment, home equity products are considerably more affordable and, therefore, worth a closer look.
This is especially true if contemplating the use of a home equity line of credit (HELOC). HELOCs currently have interest rates lower than those tied to home equity loans, personal loans and credit cards. And, right now, in the opening days of 2026 a HELOC isn’t just the cheapest way to borrow home equity, it’s also the cheapest way to borrow money overall.
To better determine the effectiveness of this borrowing tool, it helps to know what, exactly, is considered to be a “good” HELOC interest rate right now, at the start of 2026. Below, we’ll break down what homeowners need to know to determine their next steps.
See how much home equity you could borrow with a HELOC here.
What’s a good HELOC interest rate in 2026?
The average HELOC interest rate is now just 7.63%, according to Bankrate. So if you can secure a rate around that, you can consider it to be a good one. That said, HELOCs are like all other borrowing products in the sense that shopping around for rates and lenders will likely result in owners being able to find one that’s even lower than that 7.63%, perhaps to a considerable degree. Despite popular misconceptions, homeowners can use a lender different from the one that currently holds their mortgage. And they often should if it means paying less each month and year.
Shop for low-rate HELOCs online today.
How to get a below-average HELOC rate in 2026
The tried and true methods to secure a below-average HELOC rate in 2026 are many of the same ones from recent years. Borrowers should apply with good (or excellent) credit scores and they should take the time, as noted, to shop for lenders besides just the one that holds their mortgage. Owners with more equity to leverage should also be able to secure a more competitive rate, as will those who elect for a shorter repayment period.
There is, however, one timely way that was largely unavailable in recent years and that involves some strategic timing of the interest rate climate. While difficult to do with precision, homeowners considering this borrowing option should pay close attention to the Federal Reserve meeting calendar and any predicted rate cuts associated with those dates. Lenders often reduce their rate offers in anticipation of these reductions and borrowers will be able to take advantage if they time their application accordingly.
That said, because HELOC rates follow market conditions and because these rates will adjust independently with no work required by the borrower, it may not make sense to delay an application for future rate declines, either. In other words, if today’s HELOC rate offer is already low enough to fit your budget, consider applying anyway and hope to benefit from lower rates and monthly payments following additional Fed rate cuts later this year.
The bottom line
A good HELOC interest rate at the start of 2026 is approximately 7.63% or lower. But a “good” rate is subjective and dependent on your personal financial circumstances, goals and more. Carefully evaluate your HELOC options, then, before getting started and if home equity borrowing is your best recourse, consider comparing home equity loans and cash-out refinances, too, to truly determine which makes the most sense.