HELOC rates hit lowest level in more than three years as Fed stands pat on rates

A slight drop in HELOC rates for the week, as the Federal Reserve left interest rates unchanged at its second meeting of 2026. The $30,000 home equity line dipped one basis point to 7.17%, the lowest it’s been in three-plus years, according to Bankrate’s national survey of lenders. Meanwhile, the five-year $30,000 home equity loan jumped one basis point to 7.85%. 

If you’re watching the rates and trying to decide between a HELOC and a home equity loan, while timing is key, there is no guarantee that rates will decline in the near term, says Stephen Kates, financial analyst at Bankrate.

“Homeowners planning a project or large expense that could be funded with a HELOC should carefully review their borrowing options,” he says. “Using a HELOC today requires the understanding that rates may not fall quickly, so borrowers should not rely on future rate declines to make payments more affordable. If the payments fit comfortably within your budget, a HELOC can be a useful tool that preserves flexibility and allows other cash reserves to remain intact.”

What’s driving home equity rates today?

Home equity rates are driven primarily by two factors — Federal Reserve policy and long-term inflation expectations. At the Fed’s latest policy-setting meeting in March, the central bank once again left rates unchanged, as it continues to monitor inflation and the job market.

“The Fed standing pat should keep home equity borrowing rates more or less unchanged,” says Bankrate senior industry analyst Ted Rossman. “They’re currently hovering around three-year lows, so while borrowers would surely welcome lower rates, current levels aren’t too bad relative to the recent past. This situation could persist for the balance of the year.”

Inflation and geopolitical tensions are also expected to impact rates. At the start of the year, Rossman predicted the Fed would deliver three quarter-point cuts in 2026. However, because of stubborn inflation and the war in Iran, Rossman no longer believes the Fed’s rate cuts will be that aggressive. “In other words, rates probably won’t move much for the foreseeable future,” he says.

Current home equity rates vs. rates on other types of credit

Because HELOCs and home equity loans use your home as collateral, their rates tend to be much less expensive — more akin to current mortgage rates — than the interest charged on credit cards or personal loans, which aren’t secured.

While average rates are useful to know, the individual offer you receive on a particular HELOC or new home equity loan also reflects additional factors, like your creditworthiness and financials. Then there’s the value of your home and the size of your ownership stake. Lenders generally limit all your home loans (including your mortgage) to a maximum of 80% to 85% of your home’s worth.

Keep in mind: Even if you’re able to secure a favorable rate from a lender, home equity products are still relatively high-cost debt.

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A fixed-rate home equity loan offers a lump-sum payout and a predictable repayment schedule.

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