Key Takeaways
- Your credit score is the single biggest driver of home equity loan rates, with spreads of 3–4 percentage points between top and bottom tiers.
- Raising your score, even slightly, especially past 680 or 740, can save you tens of thousands in interest.
- Loan-to-value, debt-to-income ratio, loan term, and lender also affect your rate.
Your credit score plays a major role in the home equity loan rate lenders will offer you. Even a modest difference in score can change your rate by several percentage points, which affects how much you pay each month and over the life of the loan. Lenders use credit scores to assess risk, but they also look at other factors when setting rates.
Below, you’ll find typical home equity loan rates by credit tier, what else influences pricing, and practical steps you can take to qualify for a lower rate in 2026.
In this article (Skip to...)
- Current home equity rates
- Rates by credit score
- Credit score impact
- Minimum credit requirements
- Other rate factors
- Qualify for lower rates
- Rates by monthly payment
- Compare rates by loan
- FAQs
Current home equity loan rates
A home equity loan lets you borrow a lump sum against the equity in your home, then repay it with fixed monthly payments over a set term. Your credit score plays the biggest role in what rates lenders will quote, though rates also change with broader market conditions.
As of early 2026, average home equity loan rates range from roughly 7.5% to over 10%, according to Bankrate’s weekly lender survey. Borrowers with excellent credit often land at the lower end, while those with fair credit see offers closer to—or above—the higher end.
Compare home equity rates with multiple lenders. Start here
Average home equity loan rates by credit score
The table below shows typical rate ranges by credit score tier. Note that individual offers vary by lender, loan amount, and other factors.
Check your home equity loan eligibility. Start here| Credit Score Range | Typical Rate Range |
| 740+ (Excellent) | 7.00% – 8.25% |
| 680–739 (Good) | 8.25% – 9.50% |
| 620–679 (Fair) | 9.50% – 11.00% |
| Below 620 (Poor) | 11.00%+ or may not qualify |
Excellent credit (740 and above)
Borrowers in the excellent-credit tier qualify for the lowest rates available. Lenders view a score of 740+ as low risk, which translates to better terms and more options. If you’re here, you’ll likely have your pick of lenders and may see offers with minimal fees.
Good credit (680 to 739)
This good credit score range still qualifies for competitive rates, though you will typically pay 0.5% to 1.5% more than borrowers with excellent credit. Most mainstream lenders approve applicants in this tier. Because you are close to the excellent tier, reducing credit card debt may help you qualify for better rates.
Fair credit (620 to 679)
A fair credit score of 620 is often the minimum for home equity loans, but rates increase significantly at this level. You may also encounter stricter requirements for your loan-to-value or debt-to-income ratios. If your score is in the low 600s, consider improving it before applying.
Poor credit (below 620)
Options are limited below a score of 620. Many lenders will not approve home equity loans for this tier, and those that do often charge rates above 11%-12%. If you are in this range, consider alternatives or credit repair before applying.
How do credit scores affect home equity interest rates?
Lenders use your credit score as a shorthand for how likely you are to repay. The higher your score, the less risk they see, and the less they charge.
Explore your home equity loan options. Start hereHere’s how lenders determine interest rates:
- Risk-based pricing: Lenders assign rates based on default probability. A borrower with a 780 score presents less risk than someone with a 620 score, so rates adjust accordingly.
- Rate spread: The gap between the best and worst rates can reach 3 to 4 percentage points. On a $50,000 loan over 15 years, that difference could mean paying an extra $15,000 in interest.
- Score thresholds: Many lenders use tiered pricing with cutoffs at 620, 680, 700, and 740. Moving just a few points across a threshold can meaningfully change your rate.
Minimum credit score requirements for home equity loans
While 620 is a common minimum, requirements vary by lender type. Meeting the minimum gets you in the door, but it doesn’t guarantee the best rate.
Talk to several lenders at once. Start hereMinimum scores by lender type
- Banks and credit unions: Most require a minimum score of 620-680. Credit unions sometimes offer more flexibility to members with established relationships.
- Online lenders: Many accept scores as low as 620, with some specializing in borrowers with less-than-perfect credit. Rates from online lenders may be higher because they often assume greater risk than traditional banks or credit unions.
- Portfolio lenders: These lenders keep loans on their own books rather than selling them, so they may offer more flexible underwriting or consider unique cases. The rates can vary, sometimes higher or lower, based on their risk tolerance and lending strategy.
When should you improve your credit before applying for a home equity loan?
If your credit score is just below a pricing tier, such as 675 when 680 qualifies for better rates, waiting a few months before applying can reduce your borrowing costs. Moving to a higher tier often requires strategies, such as paying credit card balances below 30% of your credit limit, disputing reporting errors, and avoiding new credit applications. Depending on your profile, these changes can increase your score by 20 to 40 points within 60 to 90 days, which may be enough to qualify for a lower home equity loan rate.
What other factors affect home equity loan interest rates?
Your credit score carries significant weight, but lenders review several other risk factors before setting your home equity rate. These variables influence the risk the lender takes on and can raise or lower your interest rate.
Get personalized home equity loan quotes. Start here- Loan-to-value ratio. Lenders calculate combined loan-to-value, or CLTV, by adding your first mortgage balance to the new home equity loan and dividing that total by your home’s current value. Most lenders cap CLTV between 80% and 85%, though some allow up to 90%. A lower CLTV often qualifies for a lower rate because the lender has more equity as collateral.
- Debt-to-income ratio. Your DTI compares monthly debt obligations to gross monthly income. Many lenders prefer a DTI below 43%, though some approve borrowers up to 50%. Higher DTI can lead to a higher interest rate, even with good credit scores.
- Loan amount and repayment term. Shorter repayment terms, such as 10 years instead of 20, often carry lower interest rates but higher monthly payments. Larger loan amounts may also fall into different pricing tiers, depending on the lender.
- Property type and location. Primary residences usually qualify for the lowest rates. Loans secured by second homes or investment properties often carry rates that are 0.5% to 1% higher than those for primary residences.
How to qualify for the best home equity loan rates
You have more control over your rate than you might think.
Compare home equity loan rates from multiple lenders. Start here1. Check your credit reports for errors
Obtain your free credit reports from AnnualCreditReport.com and review them for inaccuracies, such as accounts that are not yours, incorrect balances, or misreported late payments. Disputing errors can sometimes improve your score quickly.
2. Pay down existing debt
Reducing credit card balances improves both your credit utilization ratio and your DTI. Aim to get utilization below 30% of your available limits before applying. Below 10% is even better.
3. Compare rates from multiple lenders
Rates can vary significantly between lenders, sometimes by a full percentage point or more for the same borrower. Comparing rate quotes from at least three to five lenders helps ensure you secure the most competitive rate. Multiple mortgage inquiries within a 14- to 45-day window typically count as a single inquiry for scoring purposes.
4. Choose a shorter loan term
A 10-year term usually carries a lower rate than a 15- or 20-year term. The trade-off is higher monthly payments, but you’ll pay less interest overall.
5. Lock your rate at the right time
Once you receive an offer you’re happy with, ask about locking your rate. A rate lock protects you from rate increases while your loan is being processed, which typically takes 15 to 45 days.
How different interest rates affect your monthly payment
Even small rate differences add up. The table below shows how rates affect monthly payments and total interest on a $50,000 home equity loan with a 15-year term.
Find your lowest home equity rate. Start here| Interest Rate | Monthly Payment | Total Interest Paid |
| 7.50% | $463 | $33,340 |
| 8.50% | $493 | $38,740 |
| 9.50% | $522 | $43,960 |
| 10.50% | $553 | $49,540 |
The difference between 7.50% and 10.50% is $90 per month and more than $16,000 in total interest over the life of the loan.
Home equity loan vs. HELOC vs. cash-out refinance
All three types of home equity loans let you borrow against your home’s equity, but they differ in structure, repayment, and rate type. The right choice depends on whether you want a fixed lump sum, flexible access to funds, or a full mortgage replacement.
Get personalized home equity loan quotes. Start hereHome equity loan
A home equity loan provides a lump sum at a fixed interest rate with fixed monthly payments over a set term. This structure works best when you know exactly how much you need and want predictable repayment, such as for debt consolidation or a defined project, because the rate and payment do not change over time.
HELOC
A home equity line of credit (HELOC) provides a revolving credit limit that you can draw from as needed, typically with a variable interest rate. You pay interest only on the amount you use during the draw period, and you keep your existing first mortgage unchanged, which can be important if you secured a lower rate in prior years.
Cash-out refinance
A cash-out refinance replaces your current mortgage with a new, larger loan and pays you the difference in cash. This option can make sense when current mortgage rates are equal to or lower than your existing rate, but it also resets your loan term and may increase total interest paid if rates are higher.
Compare offers and see what rate you qualify for
Your credit score gives you a starting point, but the only way to know your exact home equity loan rate is to get personalized quotes. Rates and fees can vary widely from one lender to another. Reviewing multiple offers lets you compare APRs, terms, and closing costs so you can choose the loan that fits your budget.
Explore the lenders below to see what rate you may qualify for and take the next step with confidence.
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FAQs about home equity loan rates and credit scores
Yes, you can refinance a home equity loan if your credit score improves, and a higher score may qualify you for a lower interest rate or better terms. Before refinancing, compare the new rate with your current rate and calculate whether the interest savings outweigh the closing costs. In many cases, reducing your rate by at least 1% can justify the costs, but your break-even point depends on your loan balance and how long you plan to keep the loan.
Yes, applying for a home equity loan can temporarily lower your credit score because lenders perform a hard inquiry during underwriting. The impact is usually modest, often around 5 to 10 points, and tends to recover within a few months. Credit scoring models typically treat multiple mortgage-related inquiries within a 14- to 45-day period as a single inquiry, which allows you to compare offers without significant additional impact.
Home equity loan rates can change frequently because lenders adjust pricing in response to market conditions, including Treasury yields and Federal Reserve policy. However, once you lock your rate and close on a fixed-rate home equity loan, that rate remains the same for the entire repayment term.
The interest rate represents the cost of borrowing the principal balance, while the annual percentage rate, or APR, includes both the interest rate and certain lender fees. Because APR reflects the total financing cost, it provides a more accurate basis for comparing loan offers from different lenders.
No, traditional home equity loans require a credit check because lenders evaluate your credit history and score to determine eligibility and pricing. Some alternative products, such as home equity investments, may rely less on credit underwriting, but they often involve higher overall costs or require sharing a portion of your home’s future appreciation.
