A HELOC Now Costs More Than a Fixed Home Equity Loan. The Fed Says It Isn't Done.

Update, October 12, 2026: The hike this post warned about happened. The Fed raised rates on September 16, prime went to 7%, and the average HELOC now costs slightly more than the average fixed home equity loan. The numbers and the advice below are rewritten for today’s rates.

If you’ve been holding off on a home equity line until rates come down, they went up instead. The average HELOC rate is 7.54%, per Curinos data reported by Yahoo Finance on October 9. The average fixed home equity loan is 7.50%.

Read that again. The variable product now costs more than the fixed one. You’d be paying extra for the right to have your rate rise later.

For a lump sum, that’s dumb math. Take the fixed loan.

What happened

In June, the Fed held rates and its officials penciled in a hike. On September 16 they delivered: a quarter point, to a 3.75% to 4% target range, and the minutes say all participants supported it.

Banks moved the prime rate from 6.75% to 7%, and the Fed’s H.15 release has it at 7% through October 8. Most HELOCs are priced as prime plus a margin, so the line followed. Curinos had the HELOC average at a 2026 low of 7.09% a month ago. It’s 7.54% now.

The fixed home equity loan barely moved. It went from a 2026 low of 7.31% in late June to 7.50% today.

The Fed also says it probably isn’t finished. Per the September minutes, “most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end.” The next meeting is October 27 and 28.

What this means for your math

Take $50,000 drawn in full.

• Fixed home equity loan at 7.50%: $3,750 a year in interest, locked for the life of the loan.
• HELOC at 7.54%: $3,770 a year today.
• One more quarter-point hike, HELOC at 7.79%: $3,895.
• Two more, HELOC at 8.04%: $4,020.

When we first ran this in June, Bankrate’s survey had the variable line 0.61 points cheaper, so you were at least getting paid to take the risk. That discount is gone. Now the HELOC costs more and can still go up.

One caveat: Curinos’s averages assume a credit score of 780 or higher and a combined loan-to-value under 70%. Below that, both quotes will be higher, and the gap between them could go either way. That’s why you get both quotes from the same lender.

What to do this week

If you need a lump sum now (a roof, a tuition bill, paying off a card balance), ask one lender for a HELOC quote and a fixed home equity loan quote on the same day. Then get the same pair from a credit union. If the fixed rate is the same or lower, take it.

If you’ll spend in stages over a year (a remodel paid out by milestone), a HELOC can still win, because you only pay interest on what you’ve drawn. Ask whether the lender lets you lock part of the balance at a fixed rate. Yahoo Finance notes fixed-rate HELOCs exist but are much less common.

If you don’t need the money yet, don’t open the line. Some lenders charge annual or inactivity fees just to keep it open.

Before you borrow, check your first mortgage rate. Freddie Mac’s 30-year average hit 7.40% on October 8. If your current rate is well under that, keep it and borrow against the equity with a second loan. Model the payment in our mortgage calculator, and compare lenders on our mortgages hub and best mortgage lenders page.

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