The average HELOC interest rate by loan type, credit score, and state

The average rate for a HELOC is currently over 4%.

  • The average interest rate on a HELOC is 4.14% on a 50 loan.000 USD with a loan-to-value ratio of 80%.
  • But credit score, location, and the HELOC's loan-to-value ratio can affect your interest rate.
  • Even though interest rates are currently low, remember that it may not stay that way over the many years of your loan.

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The average interest rate for a HELOC worth 50.000 USD is according to data from 4.14% S&P Global, assuming a loan-to-value ratio of 80%.

If you are a homeowner with equity, a HELOC home equity line of credit has relatively low interest rates compared to other loan options.

Unlike home equity loans, HELOCs are credit accounts where a line of credit is established that allows you to borrow over time. HELOCs are more like a credit card account than a loan in that you can borrow as often as you need up to a certain limit and up to a date when repayment begins.

HELOCs do not provide a lump sum cash payment up front. Instead, they're ideal for situations where you're not sure how much you need to borrow, such as. B. for a remodeling project.

Regardless of the situation you're borrowing for, your credit score, loan-to-value, and where you live can all affect the HELOC interest rate you receive from your lender. Here's how these factors can affect what you pay.

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Average HELOC interest rate over time

HELOCs often have a variable interest rate, which means the rate can change over the life of the loan.

These interest rates are often closely tied to the prime rate, for which loans are charged to the interest banks. This interest rate follows the Federal Funds Rate of the Federal Reserve, which can change frequently. Its effect is often reflected in interest rates on everything from auto loans to savings accounts.

Banks sometimes add a margin to the prime rate to determine their HELOC rates. Since March 2020, the key interest rate has been 3.25% – an unusually low rate due to the financial impact of the coronavirus. Here's how this rate has changed since 2001:

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Because of this low federal funds rate, interest rates on HELOCs are currently relatively low. Here's how the average interest rate changed in 2021, according to amended data from S&P Global.

Date Average HELOC interest rate
may 2021 4,27 %
June 2021 4,25 %
July 2021 4,23 %
August 2021 4,19 %
September 2021 4,17 %
October 2021 4,16 %
November 2021 4,15 %
December 2021 4,14 %

Since HELOC interest rates are variable, all of them could – and probably will – change in the future. Your interest rate may rise, especially if the economy recovers from the effects of the coronavirus.

While interest rates on HELOCs are currently low, they may not always remain so in the future, which is important to keep in mind when considering this line of credit, which could take five or 10 years to repay.

Average HELOC interest rate by collateral value

The amount you want to borrow and the value of your home play a role when considering the loan-to-value of your HELOC loan. Most lenders allow homeowners to borrow up to 80% of the value of their home minus the mortgage balance, while some lenders allow up to 90% minus the mortgage balance.

Banks view a HELOC with a loan-to-value ratio greater than 80% as a greater risk. Banks usually charge more for these loans. Here's how the average interest rate is composed based on the loan-to-value ratio.

Type of HELOC Average interest rate
50.000 $ 80% LTV 4,14 %
100.000 $ 80 % loan value 4,00 %
50.000 $ 90 % Collateral Value 4,52 %
100.000 $ 90% loan-to-value 4,36 %

HELOC interest rates by credit score

As with any other type of loan, the amount you pay in interest is determined by your credit score. HELOCs are cheapest with a good credit score and become progressively more expensive as your credit score declines.

HELOCs, however, depend heavily on credit scores and are best available to those with FICO scores above 720. According to credit bureau Experian, the minimum FICO score for a HELOC is 680. However, some exceptions can be made, especially for those with a large amount of equity in their homes.

HELOC interest rates vary according to creditworthiness. Here are the typical maximum interest rates you can expect according to data from for each loan tier

FICO score Typical maximum interest rate
740-850 4,74 %
720-739 5,12 %
700-719 6,37 %
670-699 7,74 %
640-669 9,24 %
620-639 10,74 %

The best interest rates go to borrowers with FICO scores of 740 and higher, while borrowers with credit scores below 670 see big jumps in interest rates.

Average HELOC interest rate by state

Like the average mortgage rate, the average HELOC rate varies by state.

According to S&P Global, homeowners in Arizona, Wyoming, California and Nevada are paying the most for their home equity lines of credit with an average interest rate above 4.5 percent. However, homeowners in Connecticut, West Virginia, North Carolina and Massachusetts will see the lowest interest rates with rates below 3.7.

Here's what the average HELOC rate looks like in the U.S., assuming an 80% loan-to-value: