How HELOC Rates Work (Prime + Margin)
Home equity rates track the Prime rate and the bond market. Here is what drives how heloc rates work (prime + margin) and how to get the best price.
What to know
A HELOC rate equals an index plus a margin - the index is usually the Prime rate (about 7.5-8% in 2026) and the margin is a fixed add-on based on your credit and CLTV. When Prime changes, your rate and payment adjust, typically monthly. The margin stays fixed for the life of the line.
What affects your rate
- Your credit score and combined loan-to-value
- HELOC (variable, Prime + margin) vs home equity loan (fixed)
- Lien position and occupancy (primary vs rental)
- The Prime rate and Fed policy — and lender margins, so compare quotes
Example HELOC cost by rate (on a $100,000 balance)
| Rate | Interest-only / mo | Amortizing (20-yr) / mo |
|---|---|---|
| 7.50% | $625 | $806 |
| 8.00% | $667 | $836 |
| 8.50% | $708 | $868 |
| 9.00% | $750 | $900 |
| 9.50% | $792 | $932 |
| 10.00% | $833 | $965 |
Rates move with Prime. Join the free Cashout Equity alerts so you can lock a fixed-rate option at the right time.
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Frequently Asked Questions
- How HELOC Rates Work (Prime + Margin) — the quick answer?
- A HELOC rate equals an index plus a margin - the index is usually the Prime rate (about 7.5-8% in 2026) and the margin is a fixed add-on based on your credit and CLTV. When Prime changes, your rate and payment adjust, typically monthly. The margin stays fixed for the life of the line.
- Are HELOC rates higher than mortgage rates?
- Usually yes — HELOCs are variable and sit in second lien position, so they price above first-mortgage rates, but you only pay interest on what you draw.