May data shows home equity loan rates surged to 7.86% while HELOC rates remained stable at 7.25%, reflecting divergent trends in second mortgages.
Home equity loan rates climbed sharply in May, ending the month at 7.86%, a notable increase from earlier levels. The rise contrasts with HELOC rates, which stayed near yearly lows at 7.25%, moving only slightly during the period.
Both rates apply to borrowers with credit scores of at least 780 and a combined loan-to-value ratio below 70%. The stability in HELOC rates aligns with broader trends in adjustable-rate products, while fixed-rate home equity loans saw more volatility.
Homeowners hold an estimated $34 trillion in home equity, but with primary mortgage rates stagnant, many are turning to second mortgages to access that value without refinancing their first loans.