Current HELOC & Home Equity Loan Rates: July 2, 2024—Rates Are Mixed (2024)

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Home equity loans and home equity lines of credit (HELOCs) allow homeowners to tap into the value of their homes.

A home equity loan is a fixed-rate, lump-sum loan that allows homeowners to borrow up to 85% of their home’s value and pay that amount back in monthly installments. A home equity line of credit is a variable-rate second mortgage that draws on your home’s value as a revolving line of credit.

Both options use your property as collateral for your payments, which means your lender can seize your property if you can’t repay what you borrow.

Related: Best Home Equity Loan Lenders

$100K HELOC Loan Rates

—Ideal for Medium-Sized Projects

LOAN TERMAPR

60.00% LTV

9.13%

80.00% LTV

9.31%

90.00% LTV

10.18%

A $100K HELOC is suitable for more extensive renovation projects or other significant financial needs. Compare the rates and terms to find the best fit for your situation.

$250K HELOC Loan Rates

—Access More Funds for Major Investments

LOAN TERMAPR

60.00% LTV

9.13%

80.00% LTV

9.31%

90.00% LTV

10.22%

For larger projects or investments, a $250K HELOC provides the necessary funds with various LTV options. Explore these rates to determine the right balance between borrowing capacity and risk.

$500K HELOC Loan Rates

—Maximize Your Borrowing Power

LOAN TERMAPR

60.00% LTV

9.18%

80.00% LTV

9.38%

90.00% LTV

10.36%

If you have substantial equity in your home and need significant financing, a $500K HELOC offers a great deal of borrowing power. Evaluate these options to find the optimal rate and term for your goals.

*Data accurate as of July 1, 2024

Pros and Cons of a HELOC

PROSCONS

Average interest rates range between 8% and 10%, which is lower than other loan types

Variable interest rates fluctuate based on the federal benchmark rate, potentially increasing monthly payments

Like a traditional credit card, HELOCs give you access to a revolving line of credit that you can use as needed to cover unexpected expenses and other needs

When you take out a HELOC, the lender will use your property as collateral, which means you can lose your home if you fall behind on payments

Interest payments may be tax deductible if you meet IRS guidelines and prove that you will use the funds to buy, improve or build a home

You may be required to pay several fees, including appraisal, application and closing fees

If you use a HELOC to repay other debt, you can reduce your credit utilization and improve your credit score

You can end up with an upside-down loan, which means you owe more than your property is worth

5-Year Home Equity Loan Rates (60 Months)

LOAN TERMAPR

60.00% LTV, $50K

8.13%

80.00% LTV, $50K

8.39%

90.00% LTV, $50K

9.10%

A 5-year term offers a shorter repayment period with typically higher monthly payments. These products are suitable for borrowers looking for a quicker payoff.

10-Year Home Equity Loan Rates (120 Months)

LOAN TERMAPR

60.00% LTV, $150K

8.31%

80.00% LTV, $150K

8.58%

90.00% LTV, $150K

9.25%

With a 10-year term, borrowers can enjoy a balanced monthly payment while still building equity quickly. 10-year home equity loans are ideal for medium-sized projects or financial needs.

15-Year Home Equity Loan Rates (180 Months)

LOAN TERMAPR

60.00% LTV, $200K

8.49%

80.00% LTV, $200K

8.77%

90.00% LTV, $200K

9.42%

A 15-year term provides lower monthly payments compared to shorter terms, offering more affordability while still progressing toward your financial goals.

20-Year Home Equity Loan Rates (240 Months)

LOAN TERMAPR

60.00% LTV, $250K

8.72%

80.00% LTV, $250K

9.08%

90.00% LTV, $250K

9.63%

Offering longer repayment and lower monthly payments, 20-year home equity loans are suitable for larger investments and long-term financial planning.

30-Year Home Equity Loan Rates (360 Months)

LOAN TERMAPR

60.00% LTV, $500K

9.30%

80.00% LTV, $500K

9.93%

90.00% LTV, $500K

10.05%

The 30-year term maximizes affordability with the lowest monthly payments. These options are best for substantial borrowing needs and long-term investments.

*Data accurate as of June 1, 2024

Pros and Cons of a Home Equity Loan

PROSCONS

Your interest rate will remain static over the life of your loan, giving you a consistent monthly payment amount

You put your property at risk of foreclosure since your home secures your loan against defaulted payments

Home equity loans offer lump-sum funds that are ideal for tackling large expenses like home repairs, down payments and more

Lenders impose strict credit score and debt-to-income ratio requirements that make it difficult to qualify for a home equity loan

Unlike other fixed loan types, you can use your home equity loan funds for any purpose

Closing costs, appraisal fees, application fees and other charges can add up quickly and raise your overall loan bill

If you use the loan to buy, build or improve your home, you can potentially deduct your interest payments from your tax return

If your home’s value decreases over time, you could end up with a loan balance that’s higher than your property’s value

Why Is Home Equity Important?

Home equity is important because it signifies how much wealth you have based on how much of your home you own. The more equity you have, the more wealth you’ve accumulated.

If you ever need to utilize your home equity, you can tap into it with a home equity loan or home equity line of credit. You might also want to explore a cash-out refinance as an option to use your home’s equity.

How Does a Home Equity Loan Work?

You earn home equity every month when you make your mortgage payments. The more payments you make, the more your equity increases.

A home equity loan is a lump-sum loan based on how much of your home you own outright. So if your loan-to-value ratio (LTV) is 50%, you can borrow, say, 80% of that LTV. Most lenders won’t let you access 100% of your home’s equity, but even getting a portion of it through a home equity loan could be a game-changer for your big financial needs.

How Do I Calculate Home Equity?

You’ll calculate your home equity by taking your home’s current value—based on its most recent appraisal—and subtracting it from your current mortgage balance.

For example, say your home is valued at $500,000 and your mortgage’s outstanding balance is $250,000. This would mean you have $250,000 in home equity, and your loan-to-value ratio (LTV) would be 50%. If you’re looking for a home equity loan or line of credit, lenders usually only approve up to a certain LTV ratio. For example, some lenders require 80% LTV or less.

Find the Best HELOC Rates of 2024

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Current HELOC & Home Equity Loan Rates: July 2, 2024—Rates Are Mixed (2024)

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