Home equity loan interest rates have been gradually declining in recent years.
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If you find yourself entering 2026 in need of extra financing and can't pick up additional work, you may want to consider your borrowing options. After the inflationary economic cycle of recent years, both personal loans and credit cards can comfortably be ruled out as viable options, at least for the time being. Personal loans come with interest rates comfortably over 10%, on average, right now, while credit card interest rates remain over 20%, near a record high first reached as far back as 2024. And the potential for either to decline materially anytime soon currently looks low.
Home equity loans, however, provide a viable and cost-effective recourse for borrowers now. Home equity levels in many parts of the United States are robust, and home equity loan interest rates have markedly declined as the interest rate climate has cooled over the past year and a half, approximately. So these products can both provide access to large sums of money, and they can do so at a cost that's much lower than the alternatives. At the same time, you are leveraging your home with this secured type of loan, so you need to be sure of your ability to make repayments before getting started.
That confidence will come, in part, from understanding your costs and the interest rates that will define those costs. But what's considered to actually be a good home equity loan interest rate in 2026? That's what we'll define below.
See how much home equity you could borrow here.
What's a good home equity loan interest rate in 2026?
Average home equity loan rates on January 7, 2026, declined to 7.97% for 5-year terms, according to Bankrate. The 10-year home equity loan rate is now 8.16% and just 8.10% for 15-year options. So, if you can find a rate around these figures or, preferably, below them, you can consider it to be a good home equity loan interest rate right now, in the early days of 2026.
That said, it's important to remember that these are just averages, and with a little effort, it's possible to find rates even lower than those listed online. Here's how:
- Shop around online: Don't accept the first offer you receive. Instead, shop around for rates and lenders and look to others besides just the one who currently holds your mortgage loan. This will take time and may extend the process a bit but if the end result is a much lower interest rate, it will be worth it.
- Choose a shorter term: As can be clearly seen above, shorter-term loans come with more competitive rates than longer ones do. While not always the case, many lenders will reward borrowers who are willing to repay their loan more rapidly with a better rate, as it means less risk being taken on by the lender.
- Boost your credit score: The best rates and terms are always reserved for those borrowers with the cleanest credit backgrounds. So, if your credit score needs improving or your other debts are holding you back, consider working on those first and then apply after you've had a chance to improve your borrower profile.
See how low your current home equity loan rate offers are here.
The bottom line
A good home equity loan rate in 2026 is about or below 7.97% for 5-year terms, 8.16% for 10-year terms and 8.10% for 15-year ones. But home equity loan rates can and will change this year based on market conditions, so pay attention to any developments that can cause rates to move up or downward and try to time your application accordingly. Consider speaking with a home equity lender, too, who can answer any questions you may have and help you better determine your next steps.
Edited by Angelica Leicht
