Homeowners looking to borrow money may want to look at their house instead of a credit card. According to Money, the average home equity loan rate today stands at 8.14%, while the average HELOC rate today sits at 8.03%.
These figures come from a report dated September 11, 2026, and they represent nationwide averages. The actual offers you receive will depend on where you live, which lender you choose, and your credit profile.
The difference between the two is more than just a letter. A home equity loan gives you a lump sum with a fixed interest rate. A HELOC gives you a revolving line of credit with a variable rate, and you only pay interest on what you borrow.
The Rates at a Glance
The numbers are simple to state:
- Average home equity loan rate today: 8.14%
- Average HELOC rate today: 8.03%
Both are lower than most personal loan rates, which have been frozen around 12% for months. Credit card rates have fallen recently, but they started from a recent record high of 23%.
The gap is real. A home equity loan costs less than half what a credit card costs, and it is far cheaper than a personal loan.
How a Home Equity Loan Works
A home equity loan is a second mortgage. You borrow a fixed amount, pay it back over time, and the interest rate stays the same throughout. The catch is that you start making payments immediately.
The loan is secured by your home. Miss enough payments, and the bank can take the house. That is why lenders offer lower rates — they believe the collateral makes the risk worthwhile.
How a HELOC Works Instead
A HELOC is a line of credit tied to your home. You borrow as much as you need, up to a ceiling set by the lender, and you pay interest only on what you use. The rate can move with the market, though the report ties future declines to a declining federal funds rate rather than general market movement.
There is also an initial draw period. During that time, you pay interest only — no principal. After the draw period ends, typically after 10 or 15 years, you start paying both interest and principal together.
“Payments will only need to be made on the amount of credit used, not the full line of credit you’ve been approved for.”
That line comes directly from the report. It is a key feature of HELOCs — you are not borrowing the whole amount at once, and you are not paying for what you do not use.
Why the Rates Matter Now
The current climate is one of elevated interest rates. Personal loans have been frozen at around 12% for months, while credit card rates have declined recently, but only from a recent record high of 23%. Both remain double-digit rates, which makes borrowing with either especially cost-prohibitive right now, even with the potential for interest rate cuts to be issued later in 2025.
Home equity loans and HELOCs sit below both. The report points to the Federal Reserve’s declining federal funds rate as a reason rates could fall further in the months ahead.
What Determines Your Offer
Nationwide averages are useful, but they are not your offer. Lenders set rates based on several factors:
- Location: Some states have higher costs than others.
- Lender: Different banks compete on pricing.
- Credit profile: Your history matters.
- Collateral: The value of your home.
The report recommends shopping around. Comparing offers from multiple lenders is the only way to know what you actually qualify for.
The Tax Angle
Both products carry a tax benefit if you use them for the right purposes. The IRS allows you to deduct interest paid on home equity loans and HELOCs when the money goes toward eligible home repairs and renovations.
That is a real advantage. You are paying less in interest, and you may pay less in taxes on top of it.
The Risk of Borrowing Against Your Home
The collateral is the trade-off. Missing payments on a home equity loan or HELOC can lead to foreclosure. The bank takes the house.
That is a serious risk. It is why the report urges homeowners to choose carefully. The right product depends on your budget and your financial goals.
Shopping Around Is the Smart Move
The report’s bottom line is clear: shop around. Not every lender offers the same rates and terms. With your home at stake, the cheapest offer may not be the best fit.
The report also mentions that homeowners should familiarize themselves with today’s average HELOC and home equity loan rates, both of which change often based on market conditions. It then directs readers to see how much home equity they could borrow here now.
What This Means for Homeowners
The takeaway is straightforward. If you need to borrow a large sum and you own a home, the equity in that home may be your cheapest option right now.
Rates are lower than other borrowing products, and they could fall further if the Federal Reserve cuts rates again later this year. The timing favors the borrower who acts soon.
For anyone carrying credit card debt at 23% or personal loan debt at 12%, a home equity loan or HELOC at 8.03% or 8.14% looks very attractive indeed. The collateral requirement is the price of admission, but the savings are substantial.
The numbers are the story. The rates are low, the collateral is real, and the decision is yours.
Key Facts Box
- Average home equity loan rate today: 8.14%
- Average HELOC rate today: 8.03%
- Personal loan interest rate: frozen around 12% for months
- Credit card interest rate: fell from a recent record high of 23%
- Report date: September 11, 2026
- Draw period for HELOCs: typically after 10 or 15 years
See the video the story is built around at Cbsnews.
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