Compare HELOC Rates for October 2026

A home equity line of credit (HELOC) is a revolving credit line secured by your home. You borrow what you need, when you need it, up to a set limit. During the draw period, often 10 years, many lenders let you pay interest only. In the repayment period that follows, often 20 years, you repay principal and interest.

Most HELOCs have a variable rate equal to the prime rate plus a margin set by the lender. When the Federal Reserve raises or cuts rates, the prime rate usually moves with it, and so does your payment.

Because you only pay interest on what you draw, a HELOC suits costs that arrive in stages, such as a renovation paid contractor by contractor.

Lenders cap your total home debt at a percentage of your home's value, called the combined loan-to-value (CLTV). Many lenders allow 80% to 85%. With a $400,000 home, an 85% limit and a $250,000 mortgage, the most you could borrow is $90,000.

Your credit score, income and debt-to-income ratio also affect the limit. The lender confirms your home's value with an appraisal or an automated valuation.

If your home's value drops, the lender can freeze or reduce an unused line. Many did this during the 2008 housing downturn.

A HELOC is a revolving line with a variable rate. A home equity loan pays a lump sum at a fixed rate with a fixed payment. A cash-out refinance replaces your mortgage with a larger one and gives you the difference in cash.

If your current mortgage rate is lower than today's rates, a cash-out refinance means giving up that rate on your whole balance. A HELOC or home equity loan leaves your first mortgage untouched.

Choose a home equity loan when you know the exact amount you need and want a payment that never changes. Choose a HELOC when the amount or timing is uncertain.

Many lenders look for a score of 680 or higher, and the best rates usually go to scores of 740 and above. Some lenders accept scores in the 620s, often with a lower loan-to-value limit or a higher rate.

Lenders also look at your debt-to-income ratio. Many prefer 43% or less, counting the new HELOC payment.

Checking your rate on a lender's site may use a soft credit check that doesn't affect your score. A full application usually triggers a hard inquiry. Each lender states which one it uses.

Under current IRS rules, HELOC interest is deductible only if you use the money to buy, build or substantially improve the home that secures the loan, and only if you itemize deductions. Interest on money used for other purposes, such as paying off credit cards, is not deductible.

The deduction also falls under the overall limit on mortgage debt that qualifies for the interest deduction.

Keep receipts that show how you used the funds. This is general information, not tax advice; a tax professional can tell you how it applies to you.

Your home is the collateral, so falling behind on payments can lead to foreclosure. The rate is usually variable, so payments can rise. And when the draw period ends, payments jump because you start repaying principal.

On a $50,000 balance at 8.00%, an interest-only payment is about $333 a month. Repaid over 20 years at the same rate, the payment rises to about $418.

Ask each lender about closing costs, annual fees, minimum draw requirements and early closure fees before you apply.