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  • Average HELOC and Home Equity Loan Rates for the week of November 23, 2022

Average HELOC and Home Equity Loan Rates for the week of November 23, 2022

By on November 23, 2022 0
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  • Home equity loan interest rates rose more than 30 basis points week over week
  • Homeowners still have high levels of usable equity despite slowing nationwide home price growth
  • The Federal Reserve should slow the pace of rate hikes, but not stop them altogether. As a result, borrowing with a home equity loan or HELOC will be more expensive in 2023

Interest rates for home equity loans and lines of credit (HELOC) are on the rise despite a recent drop in mortgage rates.

After inflation was colder than expected year-over-year in October, mortgage rates trended lower as lenders began to expect the Federal Reserve to slow its hikes rate in the coming months. That’s not the case for home equity loans and HELOCs, which have been rising steadily since the Federal Reserve’s November meeting.

Unlike traditional mortgage rates, some home equity products, especially HELOCs, are directly tied to what the Fed does. Despite weaker inflation data, home equity loan and HELOC interest rates will continue to move in concert with any hike in the Fed’s benchmark short-term interest rate, the federal funds.

Home price growth is beginning to moderate nationwide, but there would need to be a significant drop in prices before homeowners would see an impact on their high levels of usable equity.

As a result, experts expect continued interest in home equity financing products at the end of 2022.

“If you think of the mortgages that most people have taken in the last two years, they have rates between three and four percent. They don’t want to give up that mortgage rate [by taking out a cash-out refinance]so the best thing to do is a mortgage or a home equity loan,” says Scott Haymore, head of capital markets and mortgage pricing at TD Bank.

The average rate for a $30,000 HELOC is 7.93%, up four basis points week over week. Home equity loan interest rates rose more than 30 basis points week over week.

Here are the average home equity loan and HELOC rates as of November 22, 2022:

Type of loan Price for this week Last week’s price Difference
$30,000 HELOC 7.93% 7.89% +0.04
10-year $30,000 home equity loan 7.89% 7.57% +0.32
Home equity loan of $30,000 over 15 years 7.84% 7.50% +0.34

How these rates are calculated

These rates come from a survey conducted by Bankrate, which, like NextAdvisor, is owned by Red Ventures. Averages are determined from a survey of the top 10 banks in the 10 major US markets.

What are home equity loans and HELOCs?

HELOCs and home equity loans are both secured loans. You use the equity in your home, or the difference between the value of your home and what you owe on your mortgage, as collateral.

The main differences between a HELOC loan and a home equity loan are how your funds are distributed and the interest rate at which you repay your loan.

A HELOC offers a revolving line of credit, which means you don’t receive all of your funds at once. There is a limit to the total amount you can withdraw and you will only pay interest on the money you actually use during the draw period. It’s similar to a credit card, but experts warn against treating your home equity as such. HELOCs typically have variable interest rates, which means your monthly payment is subject to change, as are the rates.

With a home equity loan, you receive a cash lump sum to borrow in advance. Unlike HELOCs, most home equity loans allow you to borrow at a fixed interest rate, which can make them a more attractive option in a rising rate environment.

“Owners, for the most part, are still looking [a HELOC or home equity loan] as an easier way to get money out of their house,” says Haymore.

What consumers need to know about home equity financing

Interest rates for home equity loans and HELOCs tend to be more competitive than for unsecured loans. However, if you miss your payments for a home equity loan or HELOC, you risk losing your home.

Experts recommend taking a calculated approach to tapping into your home’s equity.

When deciding between a home equity loan and a HELOC, consider whether you need all of the loan funds at once or spread out over time. Also, make sure you can comfortably make the monthly payments, especially if you opt for a variable interest rate HELOC.

“What’s important for borrowers is to really be aware of their options and decide what’s best for themselves and their households,” Haymore says.

With the Fed expected to continue raising rates, albeit at a slower pace, through 2023, borrowing with a home equity loan or HELOC will become more expensive.

How to get home equity financing

Tapping into the equity in your home isn’t a complicated process, but you still need to do your due diligence when applying for a home equity loan or HELOC.

You will complete an application with the lender of your choice, which will determine the loan amount and interest rate you qualify for with a home equity loan or HELOC. Remember that the average rate is not necessarily the rate that a lender will offer you. You may get a rate that is significantly above or below average, depending on your financial profile and credit score.

Before applying for home equity financing, “plan ahead and focus on getting your finances in order. Whether it’s locating your income statement or taking care of any open credit lines, consumers need to clean up everything they can,” says Haywood. This will help you benefit from a more competitive interest rate.

Beyond improving your credit score and paying off high-interest debt, shopping around for lenders is more important than ever. When you borrow with a home equity loan or HELOC, you don’t have to use the same lender you got your mortgage from. Take the time to see which lender can offer the most competitive interest rate.


In a rising rate environment, shop around to see who can offer you the best rate before committing to borrow against your home.

How to Use Home Equity Financing

The most common uses of home equity financing are home improvement projects and debt consolidation efforts.

“Home equity loans and HELOCs are still the most efficient way to borrow money for home improvements because of the tax deductions you can get,” says Haymore.

According to IRS regulations, homeowners can deduct interest paid on up to $750,000 of debt secured by their home ($375,000 for married couples filing separately) if the funds were used to “buy, build or significantly improve a qualifying house (your primary or secondary home).” Note that this tax deduction does not apply if you use the funds for other purposes, such as debt consolidation.

If you’re looking to use the equity in your home to consolidate your debt, make sure you understand how you got into debt. If you don’t address these underlying behaviors, you’ll end up where you started, but with less equity in your home.

However, as long as you have a clear goal and repayment strategy, there are plenty of ways to leverage the equity in your home.