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The U.S. housing market is becoming increasingly localized. According to the latest S&P Cotality Case-Shiller U.S. National Home Price NSA Index, home prices in metro areas across the country are moving in different directions. While metro areas like Denver, Seattle, and Tampa Bay are experiencing year-over-year price declines, other metros like Chicago, New York, and Cleveland are seeing appreciable gains.<\/p>\n
The latest price shifts should be a call to action for all homeowners nationwide who want to lock in a low rate for a home equity loan or home equity line of credit.<\/p>\n
Today’s national average monthly HELOC adjustable rate is 7.24%<\/strong>. The average fixed rate on a home equity loan is 7.37%<\/strong>, according to data analytics company Curinos. Both rates are based on applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio (CLTV) of 70%.<\/p>\n Home equity interest rates are priced to a different benchmark than primary mortgage rates. First-lien mortgage rates are guided by the 10-year Treasury, while second mortgage rates are based on the prime rate plus a margin. The prime rate is currently 6.75%. If a lender added a 0.75% margin, the HELOC rate would be 7.50%.<\/p>\n A home equity loan may have a different margin because it is a fixed-interest product.<\/p>\n Every lender has its own methodology for pricing second mortgage products, such as HELOCs or home equity loans, so it pays to shop around. Your rate will depend on your credit score, the debt you carry, and the amount of your credit line relative to your home’s value.<\/p>\n And average national HELOC rates can include super-low “introductory” rates that may last for six months or one year. After that, your interest rate will become variable, likely beginning at a substantially higher rate.<\/p>\n Again, because a home equity loan has a fixed rate, it’s unlikely to have an introductory “teaser” rate.<\/p>\n MORE<\/em><\/strong>: <\/em>Read our guide to the best home equity loan lenders.<\/em><\/p>\n How HELOC and home equity loan interest rates work <\/h2>\n