HELOC and home equity loan rates, Monday, June 15, 2026: A 61-basis-point spread between HELOC and HEL rates - but why?

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According to real estate data analytics company Curinos, the difference between the current home equity loan (HEL) rate of 7.86% and the average HELOC rate of 7.25% is 61 basis points. But why the difference? How could the HEL rate be so much higher? Second mortgage rates are based on an index rate plus a margin. The index for a home equity line of credit, an adjustable-rate product, can differ from the index used for a fixed-rate HELOC. Keep reading to learn more.

The average HELOC adjustable rate is 7.25% , according to real estate data analytics company Curinos. The national average fixed rate on a home equity loan is 7.86% . Both rates are based on applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio (CLTV) of less than 70%.

A HELOC allows you to draw from your approved line of credit as you need it. A home equity loan gives you a lump sum.

With first-mortgage rates not moving significantly lower, homeowners with home equity and a low primary mortgage rate may not be able to access that growing value in their home without a home equity loan or HELOC.

The Federal Reserve estimates that homeowners have $34 trillion of equity in their homes. For those who are unwilling to give up their low home loan rate, a second mortgage in the form of a HELOC or HEL can be an excellent solution.

Second mortgage rates are based on an index rate plus a margin. That index for a home equity line of credit is often the prime rate, which has fallen to 6.75%. If a lender added 0.75% as a margin, the HELOC would have a variable rate beginning at 7.50%.

A home equity loan may have a different margin because it is a fixed-rate product.