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Brian is the Co-Founder of MonitorBankRates.com. For over 18 years, he has utilized his background in enterprise infrastructure to engineer proprietary systems that track rates from over 8,000 financial institutions.

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| August 25, 2026 | 6 min read

HELOC Rates Pass Home Equity Loan Rates for the First Time This Summer

HELOC rates rose 0.028 points to 6.755% this week while home equity loan rates eased to 6.750%. For the first time in our summer tracking, the variable credit line carries a higher average rate than the fixed loan, and the average new HELOC offer prices above the prime rate itself.

HELOC rates rose 0.028 points to 6.755% APR this week while average home equity loan rates eased 0.019 points to 6.750%. That puts the average HELOC above the average fixed home equity loan for the first time in our summer tracking. The two products moved for different reasons: home equity loans followed the mortgage market lower, while HELOC lenders kept widening the margins on new offers even though the prime rate they price from hasn't moved all summer.

Home equity loan rates ease; HELOC rates keep rising

Home equity loan and HELOC rates, national average APR since early April

Average APRs from MonitorBankRates.com's nightly collection, the same series this report's figures come from, updated daily.

Home equity loans are second mortgages, priced off the same longer-term lending costs as first mortgages, and that market turned this week: this week's mortgage rate report had 30-year mortgage rates easing off their summer highs. Fixed home equity loan rates followed, giving back 0.019 points to 6.750% after a July and August climb that had carried them from the 6.60s to 6.769%.

HELOC rates rose anyway, adding 0.028 points to 6.755%. A HELOC is priced as the prime rate plus a margin the lender chooses, and prime has been parked at 6.75% all summer, so the entire rise has come from lenders widening the margins on new offers, the same thing behind the category's July and August increases. If you already have a HELOC, none of this changes your rate; you pay prime plus the margin written into your existing agreement, and prime hasn't moved.

The credit line now carries the higher rate

All summer, our tracking showed fixed home equity loan rates above HELOC rates, usually by 0.12 to 0.15 points. That premium was the price of certainty: a rate that can never change, in exchange for a rate that starts higher. Last week the difference collapsed to 0.042 points. This week it is gone entirely, and slightly reversed: the average HELOC sits 0.005 points above the average fixed loan. The practical differences between a home equity loan and a HELOC are still real: one hands you a lump sum with a fixed payment, the other is a line you draw on with a rate that follows prime. What changed this week is the rate side of that choice. A fixed rate no longer comes with a higher number attached.

Change since August 19, by product (percentage points)

This report's averages, August 19 to August 25. Red bars rose; green bars fell.

Home equity rates this week: August 19 vs. August 25

New HELOC offers now price above prime

Last week the average HELOC offer sat 0.023 points under the 6.75% prime rate. This week, at 6.755%, it moved past it, the first time in our summer tracking that the average new line prices above the index it is built on. When the average HELOC sits above prime, the typical lender margin on new offers has turned positive across the market. The Federal Reserve has not met since July 29, when it held its benchmark at 3.50% to 3.75% for a fifth straight time with three members preferring an increase, and it gathers again on September 15 and 16. A hike there would lift prime to 7.00% and pull every open HELOC up with it within a billing cycle or two, while existing fixed home equity loans would not move at all. Lenders adding margin to new lines now may simply be getting ahead of that possibility.

Insurance on the collateral is part of the math

A lender weighing your HELOC or home equity loan application is looking at the same asset your homeowners insurance protects, and the policy is a condition of the loan for as long as it is open. Premiums have been climbing in much of the country, and where you live drives most of the difference; our MBR Home Insurance Burden Index ranks all 50 states by how heavily those premiums weigh on homeowners. Homeowners in this issue's spotlight state can start with our California homeowners insurance guide. If the project you're financing is a roof, a remodel, or repairs, it's worth pricing the insurance side in the same sitting; the loan and the policy are attached to the same house.

Picking between the loan and the line this week

In dollars, a $50,000 balance at the average HELOC rate runs about $281 a month in interest during the draw period, while a 10-year home equity loan for the same amount at the average fixed rate runs about $574 a month with principal included; the payment structures differ far more than the rates now do. A fixed home equity loan usually carries the higher rate in exchange for a payment that can never change. This week it carries the lower one, and it stays put even if the September meeting pushes prime and every open credit line higher. For a one-time expense with a known price, that combination favors the loan. Borrowers comparing local offers can line up California home equity loan rates against these national averages.

The bottom line for equity borrowers

HELOC rates moved above both prime and the average fixed home equity loan rate this week, on lender margins alone, while home equity loan rates eased alongside the mortgage market. A variable rate that starts above the fixed alternative is a hard deal to justify unless the flexibility of a draw-as-needed line is the point. As always, these figures are averages across more than a thousand lenders, and individual quotes land all over the range; the quote your own bank gives you first is one data point, not the market.