# Home Equity Loans Get Costly as Rates Rise

> Rising mortgage rates make home equity loans riskier for borrowers.
- Title: Home Equity Loans Get Costly as Rates Rise · Kiplinger
- Summary: Rising mortgage rates make home equity loans riskier for borrowers. Homeowners face higher costs tapping home equity as interest rates climb.
- Keywords: home equity, mortgage rates, heloc, cash-out refi, variable rate loans, fixed rate loans, federal reserve, interest rates, home equity loans, homeowners, Home, Equity
- Source: Kiplinger — https://kiplinger.com/personal-finance/home/as-rates-rise-tapping-home-equity-gets-trickier
- Published: 2026-11-01T15:15:00+00:00
- Read time: 1 min
- Topics: home equity, mortgage rates, heloc, cash-out refi, variable rate loans, fixed rate loans, federal reserve, interest rates, home equity loans, homeowners
## Home Equity Value Soars
Homeowners amass record $35.8 trillion in home equity this year, a 2.2% increase from 2025 and almost quadruple the 2012 level.
## Homeowners Tap Equity for Needs
Homeowners use home equity to finance property upgrades, pay off high-interest debt, fund college, or cover living expenses.
## HELOCs and Cash-Out Refis Rise
More than 1 million Americans borrowed against home equity in first half of 2026, the highest first-half level since 2022.
## Interest Rates Surge
Fed rate hikes have made home equity loans more expensive, with primary and secondary mortgages now in the 7% to 8.5% range.
## Experts Recommend Strategy
Choose a loan that fits your needs: lump-sum for home equity loans, ongoing flexibility for HELOCs.
## Rate Sensitivity Matters
Rate increases of one or two percentage points could squeeze budgets, making fixed-rate loans safer.
## Plan Before Acting
Small adjustments like credit score improvements can save money on interest rates.
## Shop for Best Rates
Rate variations of almost half a percentage point exist for borrowers with similar credit profiles.
## Key takeaway

Homeowners face higher costs tapping home equity as interest rates climb.