Current Home Equity Loan Rates for October 2025

What is a home equity loan?

A home equity loan is a type of debt based on how much ownership you have built up in your house. This is one way to access the value of your home, which is likely your most valuable asset.

How do home equity loans work?

Your home’s equity is usually expressed as the difference between how much you still owe on your mortgage and your house’s market value. For example, if you owe $280,000 on your house and it’s worth $350,000, you have $70,000 in equity.

Lenders don’t usually let you borrow up to your full amount of available equity, though. Depending on the lender, you might be able to borrow up to between 80% and 90% of your home’s value, minus what you still owe on your first mortgage. In the above example, if a lender allows you to borrow up to 90% of your home’s value, you would be limited to $35,000 ($350,000 x 0.90 = $315,000, then subtract your current mortgage balance of $280,000).

Most home equity loan interest rates are fixed, so you repay your loan in monthly installments that you can budget for. It’s common to see terms of 10 or 15 years for home equity loans. A home equity loan can help you pay for home improvements, consolidate debt, pay for a purchase or achieve any other financial goal you might have.

Because a home equity loan is secured by a portion of your home’s value, if you can’t make payments, the lender can potentially foreclose on your home.

Factors that affect home equity loan interest rates

Home equity loan interest rates are impacted by factors including market conditions, Federal Reserve policies, lender requirements and your personal financial situation. 

While first mortgage rates are impacted by the 10-year Treasury note, home equity loan rates are influenced to a greater degree by the federal-funds rate. When the Fed cuts its benchmark rate, home equity loan rates tend to fall in response. 

However, other market conditions, as well as lender business goals, can also influence your rate. Your personal situation also impacts your rate. Your credit history, the amount you borrow, term length and your income all play a role in the home equity loan interest rate you’re offered.

Current home equity loan rates

As of October 15, 2025, the average home equity loan rate is 8.13%, according to Bankrate’s regular survey of rates. The average range is between 5.49% and 10.75%. Home equity loan interest rates also vary according to term length:

• 10-year home equity loan: 8.28%
• 15-year home equity loan: 8.18%

These rates are lower compared to the week before, dipping to their lowest point in two years. 

How to qualify for the best home equity loan rates

If you want to qualify for the best home equity loan rate available, there are a few things to consider:

• Credit history and score: Lenders look at your credit report and credit score. The higher your credit score, the more likely you are to get a better rate. If you have a lower score, you might not be eligible for the best home equity loan rates.
• Debt-to-income ratio (DTI): Your DTI represents the portion of your monthly income that goes toward debt payments. A higher DTI might indicate a potential risk of default and result in a higher interest rate.

Increase your credit score and reduce your overall debt to increase the chance of qualifying for the best home equity loan rates. Shop around and compare lenders to find out which might give you the best deal.

Best home equity loan rates in October 2025

Home equity loan rates vary, and your rate might be different. Compare lenders to determine which will give you the best rate and other terms.