Home equity loan interest rates averaged 8.14% as of September 2, 2026, according to data from Money.com. This rate level follows a period where homeowners reached record-high levels of equity last year, with trillions of dollars currently classified as borrowable. The market currently offers fixed-rate loans as an alternative to variable-rate products like home equity lines of credit (HELOCs).
The current rates represent a decrease from previous periods. In September 2025, a 10-year home equity loan carried an average rate of 8.34%, while a 15-year loan averaged 8.21%. By November 2025, following a Federal Reserve interest rate cut, those rates shifted to 8.20% and 8.15% respectively. Financial institutions generally take guidance from the Federal Reserve, though they do not always move rates in direct proportion to central bank actions.
For a $150,000 loan at the current 8.14% average rate, a 10-year repayment term results in a monthly payment of $1,831.03. A 15-year term for the same amount costs $1,445.63 per month. Borrowers utilizing these loans use their homes as collateral, which carries the risk of foreclosure if payments are not maintained. Lending institutions like Bank of America offer various terms for lines of credit, including 30-year terms with 10-year draw periods and interest rate discounts for automatic payments or specific initial withdrawal amounts.
Homeowners will notice these rates reflected in the fixed monthly payments of new loans, providing budget certainty compared to HELOCs, where payments fluctuate based on variable interest rates. However, the requirement of using a home as collateral means that failure to meet these monthly payments could result in the loss of the property through foreclosure. For a primary residence, Bank of America limits borrowing for new HELOCs to 85% of the home's total equity, or 80% for residences in Texas.
The current borrowing window exists amid expectations that the Federal Reserve may raise interest rates during its meeting later this September. If a rate hike occurs, banks may increase their offers for new loans, raising the monthly cost for future borrowers. While existing fixed-rate loans would remain unchanged, those who have not yet locked in a rate would see higher costs in their monthly bills. The Federal Reserve is scheduled to meet later this month to determine the next direction for benchmark interest rates.