Current HELOC & Home Equity Loan Rates: February 5, 2024

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advisor Home Equity Advertiser Disclosure Current HELOC & Home Equity Loan Rates: February 5, 2024 Andrea RiquierForbes Advisor StaffAndrea Riquier is a New York-based writer covering mortgages and the housing market for Forbes Advisor. She was previously at Dow Jones MarketWatch, on the housing market and financial markets beats. Before that, she covered macro and central banks for Investor's Business Daily, and municipal bonds for Debtwire.Dori ZinnContributorDori Zinn has been a personal finance journalist for more than a decade. Aside from her work for Forbes, her bylines have appeared on CNET, Yahoo! Finance, New York Times, Quartz, Inc. and more. She loves helping people learn about money and specializes in topics like fintech, investing, real estate, borrowing money and financial literacy.Andrea Riquier, Andrea RiquierForbes Advisor StaffAndrea Riquier is a New York-based writer covering mortgages and the housing market for Forbes Advisor. She was previously at Dow Jones MarketWatch, on the housing market and financial markets beats. Before that, she covered macro and central banks for Investor's Business Daily, and municipal bonds for Debtwire.Dori Zinn Dori ZinnContributorDori Zinn has been a personal finance journalist for more than a decade. Aside from her work for Forbes, her bylines have appeared on CNET, Yahoo! Finance, New York Times, Quartz, Inc. and more. She loves helping people learn about money and specializes in topics like fintech, investing, real estate, borrowing money and financial literacy.Forbes Advisor Staff, Contributor Caroline BasileeditorCaroline Basile is Forbes Advisor's student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She holds a degree in journalism from the University of North Texas. When she's not working on finance-related content, Caroline enjoys baseball, traveling and going to concerts.

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Caroline BasileCaroline BasileeditorCaroline Basile is Forbes Advisor's student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She holds a degree in journalism from the University of North Texas. When she's not working on finance-related content, Caroline enjoys baseball, traveling and going to concerts.editor

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Published: Feb 5, 2024, 4:37am

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. Getty

Home equity loans and home equity lines of credit are two products that let homeowners tap into their home equity. What's the difference?

A home equity loan is a fixed-rate, lump sum loan that is secured by the borrower's equity in their home. This type of loan enables a homeowner to borrow up to 85% of their home equity and pay it back in monthly installments over a period of five to 30 years, depending on the loan term.

A home equity line of credit (HELOC) is a variable-rate second mortgage that utilizes a portion of your home's value through a revolving line of credit. You can use, pay down and reuse the credit line during a set time period as needed.

Related: Best Home Equity Loan Lenders

$100K HELOC Rates

-- Ideal for Medium-Sized Projects

Loan term APR 60.00% LTV 9.11% 80.00% LTV 9.26% 90.00% LTV 9.95%

A $100K HELOC is suitable for more extensive renovation projects or other significant financial needs. Compare the rates and terms to find the best fit for your situation.

$250K HELOC Loan Rates

-- Access More Funds for Major Investments

Loan term APR 60.00% LTV 9.10% 80.00% LTV 9.25% 90.00% LTV 9.98%

For larger projects or investments, a $250K HELOC provides the necessary funds with various LTV options. Explore these rates to determine the right balance between borrowing capacity and risk.

$500K HELOC Loan Rates

-- Maximize Your Borrowing Power

Loan term APR 60.00% LTV 9.14% 80.00% LTV 9.31% 90.00% LTV 10.08%

If you have substantial equity in your home and need significant financing, a $500K HELOC offers a great deal of borrowing power. Evaluate these options to find the optimal rate and term for your goals.

*Data accurate as of February 2, 2024

5-Year Home Equity Loan Rates (60 Months)

Loan term APR 60.00% LTV, $50K 8.16% 80.00% LTV, $50K 8.40% 90.00% LTV, $50K 9.19%

A 5-year term offers a shorter repayment period with typically higher monthly payments. These products are suitable for borrowers looking for a quicker payoff.

10-Year Home Equity Loan Rates (120 Months)

Loan term APR 60.00% LTV, $150K 8.35% 80.00% LTV, $150K 8.60% 90.00% LTV, $150K 9.34%

With a 10-year term, borrowers can enjoy a balanced monthly payment while still building equity quickly. Ideal for medium-sized projects or financial needs.

15-Year Home Equity Loan Rates (180 Months)

Loan term APR 60.00% LTV, $200K 8.53% 80.00% LTV, $200K 8.79% 90.00% LTV, $200K 9.51%

A 15-year term provides lower monthly payments compared to shorter terms, offering more affordability while still progressing toward your financial goals.

20-Year Home Equity Loan Rates (240 Months)

Loan term APR 60.00% LTV, $250K 8.79% 80.00% LTV, $250K 9.11% 90.00% LTV, $250K 9.73%

Offering longer repayment and lower monthly payments, 20-year home equity loans are suitable for larger investments and long-term financial planning.

30-Year Home Equity Loan Rates (360 Months)

Loan term APR 60.00% LTV, $500K 9.54% 80.00% LTV, $500K 10.16% 90.00% LTV, $500K 10.28%

The 30-year term maximizes affordability with the lowest monthly payments. These options are best for substantial borrowing needs and long-term investments.

*Data accurate as of February 2, 2024

Why Is Home Equity Important?

The more home equity you have, the higher your net worth rises. Building wealth is vital to having long-term financial health, and home equity is one way to build wealth.

Every time you make a mortgage payment, you increase your home equity, or how much you own of your home. The more equity you have, the more wealth you amass.

HELOC rates are tied more closely to banks than are first-mortgage rates, which tend to track the performance of the bond market. The Federal Reserve, which controls the interest rates that banks charge each other, has signaled to investors that it expects to raise those rates several times in 2022 and beyond.

How Do I Calculate Home Equity?

You'll calculate your home equity by taking your home's current value -- based on its most recent appraisal -- and subtracting it from your current mortgage balance.

For example, say your home is valued at $500,000 and your mortgage's outstanding balance is $250,000. This would mean you have $250,000 in home equity, and your loan-to-value ratio (LTV) would be 50%. If you're looking for a home equity loan or line of credit, lenders usually only approve up to a certain LTV ratio. For example, some lenders require 80% LTV or less.

Find the Best HELOC Rates of 2024

Learn More

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