Home Equity Loan and HELOC Resources
A home equity guide for beginners — with expert guidance, tools and more.
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Your guide to home equity loans and HELOCs
One of the biggest perks of homeownership is leveraging your home equity to achieve other goals, like home improvements or debt consolidation. A home equity loan and a home equity line of credit (HELOC) both let you access funds secured by your equity, but they work differently.
Understanding how interest rates, monthly payments and borrowing flexibility vary between these home loan types is crucial. This guide explains how each option works, who can qualify and how to decide which option is right for you.
Explore equity-tapping loan types
Learn about the different loan types that allow you to tap your home equity.
Home equity loan and HELOC rates and market insights
Follow current home equity rate trends and understand the factors that can affect your interest rate.
Tools and calculators
Estimate how much cash you can access using an equity loan and what your monthly payments could look like.
Expert guides and advice
Learn about how to qualify for a home equity loan or HELOC, how to get approved with bad credit and more.
Lender reviews and our picks for the best lenders
Research home equity loan and HELOC lenders and explore their requirements.
Types of equity-tapping loans
Compare your options
HELOC vs. home equity loan: What’s the difference?
Compare these equity-tapping loan types and determine which is the best for you.
Reverse mortgage vs. home equity loan or HELOC: Which should you choose?
Learn how a reverse mortgage works, and when it might be a better option than a second mortgage.
Second mortgage rates and market insights
Current average home equity loan rates
Interest rate vs. APR An interest rate is the basic cost of borrowing money, while an annual percentage rate (APR) includes the interest rate plus additional fees like origination costs. APR gives you the true total cost of the loan, so it’s always higher than the interest rate alone.See more home equity loan rates on LendingTree.
Current average HELOC rates
APR vs. interest rate
A loan’s interest rate is what your lender charges you to borrow money, while an annual percentage rate (APR) includes both interest charges and other loan fees.
View more HELOC rates on LendingTree.
Home equity market insights
- While overall equity-tapping loans are increasing in popularity, that’s largely due to HELOCs. The flexibility of HELOCs, in contrast to lump-sum loans like home equity loans, is the most likely reason.
- Paying for home improvements and consolidating debt are the two most common reasons homeowners tap their equity, according to a LendingTree study.
- Home equity loan and HELOC interest rates remain elevated compared to where they sat before the coronavirus pandemic, and spiked after the Federal Reserve increased the federal funds rate on Sept. 17.
- The average homeowner with a mortgage has $310,000 in tappable home equity, as of Q2 2026.
Explore this month’s mortgage rate predictions.
Average second mortgage rates by credit score
Home equity loan and HELOC rates currently sit as low as 7.25% on the LendingTree platform.
Rates are calculated based on conditional offers for both home equity loans and home equity lines of credit with 30-year repayment periods presented to consumers nationwide by LendingTree’s network partners in the past 30 days for each loan amount. Rates and other loan terms are subject to lender approval and not guaranteed. Not all consumers may qualify. See LendingTree’s Terms of Use for more details.
Tools and Resources
Expert guides and advice
Mortgage lender reviews and our top picks
Mortgage lenders reviewed by LendingTree
How to get banks to compete for your business with LendingTree
Shopping for a home equity loan shouldn’t mean filling out tons of applications. With one form, compare rates from our network of vetted home equity lenders — when banks compete, you win.
1. Tell us what you need
Take two minutes to tell us about yourself, your home and when you need the money.
2. Shop your offers
If you qualify, we’ll send you offers from up to five lenders from the nation’s largest lender network.
3. Access your home equity
You’ll choose the lender that fits your budget and needs and send in a formal application. They’ll send you the money for your home equity loan if you’re approved.
Frequently asked questions
| Home equity loan | HELOC | |
|---|---|---|
| Payout type | Lump sum | Revolving credit line |
| Interest rate | Fixed | Variable |
| Payments | Principal and interest payments that won’t change over time. | Payments change as the interest rate adjusts. You’re also typically required to go from making interest-only payments during the draw period to full principal-and-interest payments during the repayment period. |
| Best for | Projects with a set budget, like debt consolidation or college tuition. | Needs that will occur over time and may not have a predetermined amount, like home improvement projects or higher education expenses. |
You can typically borrow up to 85% of your home’s value, minus your outstanding mortgage balance. Use LendingTree’s home equity loan and HELOC calculator to find out your estimated loan amount. Or, if you’d like to do some back-of-the-napkin math, use this formula:
Borrowing limit = (Current home value x 85%) – Current mortgage balance
For example, if your home is worth $350,000 and you still owe 100,000 on your mortgage, your borrowing limit would be $97,500.
Borrowing limit = (350,000 x 0.85) – 200,000
= 297,500 – 200,000
= 97,500
Generally, you’ll need a minimum 620 credit score and a maximum 50% debt-to-income (DTI) ratio, but it can pay to shop around — lenders have the freedom to set their own requirements and some are more lenient than others. You’ll also need a home appraisal, which helps the lender ensure that your home’s value is high enough to secure the loan.
Home equity loan and HELOC interest payments are typically only tax-deductible if the equity loan was used to “buy, build or substantially improve” the home securing it. Only interest up to the first $750,000 (or $375,000 if married or filing separately) qualifies, according to the IRS rules.