Specifically, mortgages taken out between 20 have average interest rates below 4.00%. If you took out your current mortgage before 2022, you likely have a more favorable rate than what you'll find on the market now. "If we use 2008 to 2009 as a teaching lesson when home values fall, you might find yourself in a negative equity position that might take years to recover from." Cash-out refinance loans However, a home equity loan could be a better option than the below five alternatives in specific situations.Ĭonsidering tapping into your home equity? See what interest rate you could qualify for here now.īill Westrom, the CEO and founder of, advises borrowers refrain from borrowing the maximum amount, even if they qualify. The best lending option depends on a several factors, including the loan amount, borrowing costs and your time horizon for repayment. With lower interest rates than other forms of lending, home equity loans may be a good option for borrowers. A 2023 report from the real estate analytics firm CoreLogic says the average homeowner in the U.S. The good news for homeowners is that despite dips in some areas, prices are generally holding steady and preserving home equity for owners. According to Freddie Mac, the rate on a conventional 30-year fixed-rate mortgage is currently 6.90%, down from 7.79% in late October. Nevertheless, lenders have already begun lowering mortgage rates in anticipation of any cuts to the federal funds rate. Still, the long line graph indicates a cooling trend, albeit a bumpy one. Inflation remained stubbornly high in January, possibly pushing back any interest rate cuts by the Federal Reserve. For a variety of reasons, a home equity loan stands apart from other popular lending options.