Second mortgage rates: why they run higher than first mortgages and how to compare offers

6 min read · LenderMatch Learn

Second mortgage rates (the rates on home equity loans and HELOCs) usually run higher than first-mortgage rates, because a second lender is paid only after the first if the home is sold to settle its debts. As of October 21, 2026, Bankrate’s national averages were 7.36% for a HELOC and 8.67% to 8.77% for a 5- to 15-year home equity loan, compared with a 7.32% average for a 30-year fixed first mortgage (Freddie Mac, week of October 22, 2026).

Your own rate depends mostly on how much of your home’s value you borrow against, your credit, the type of loan and the lender. Below: today’s averages, why seconds cost more, what moves your rate, and how to compare offers by APR and fees. Because pricing varies so much from lender to lender, getting several offers is the surest way to see your number.

Second mortgage rates today

Bankrate’s averages assume a $30,000 loan or line, a 700 FICO score and an 80% combined loan-to-value on a primary single-family home. Bankrate reported a range of 6.00% to 10.49% for the 5-year home equity loan. Different surveys use different methods, so treat the gaps as rough. Live figures: mortgage rates and prime rate.

Those are survey averages for one borrower profile. For what loans actually closed at, our analysis of federal HMDA data shows the median HELOC opened at 7.50% in 2025 and the median home equity loan closed at 8.50%, with figures for every state on our HELOC rates and home equity loan rates pages.

Why are second mortgage rates higher?

The main reason is lien position. The CFPB explains that if a home is sold to pay off its debts, the second-lien lender is paid only after the first. If there isn’t enough equity, it may not get back everything it is owed, which is one reason these loans often carry higher rates than first mortgages.

Federal rules build in the same expectation. Under the CFPB’s definition, a first-lien mortgage counts as “higher-priced” when its APR is 1.5 points or more above the benchmark Average Prime Offer Rate, but a subordinate-lien mortgage only when it is 3.5 points or more above it. The rules themselves allow a wider gap for second liens.

One wrinkle in the table: the HELOC average sits close to the 30-year fixed average, and below the home equity loan averages. That’s because a HELOC rate is variable. It is set as prime plus a margin and can rise later, while a home equity loan locks a fixed rate for years. Our guide to lien position shows who gets paid first in a forced sale.

What moves your second mortgage rate

• Combined loan-to-value (CLTV). All loans on the home divided by its value. Borrowing closer to the lender’s limit usually means a higher rate. Bankrate’s averages assume 80%. See how much equity you can borrow.
• Credit score. The averages above assume a 700 FICO score. A higher score often gets a lower rate or margin; a lower one, a higher rate or a smaller limit.
• Lien position. A HELOC on a paid-off home sits in first position. A first-lien HELOC that replaces a mortgage is also first.
• Loan type and term. Variable lines are priced off prime; fixed home equity loans are priced for their full term.
• Loan amount and the property. One credit union sets its HELOC margin by credit history, loan amount and loan-to-value, and one online lender asks for a 660 minimum score on investment properties versus 600 on others.
• The lender. Bankrate’s 6.00% to 10.49% range for the same 5-year loan shows how far apart offers can be.

HELOC vs home equity loan rates

A HELOC is a line you draw on as needed, usually at a variable rate, paying interest only on what you use. A home equity loan pays one lump sum, generally at a fixed rate with equal payments. On October 21, 2026, the home equity loan averages ran 1.31 to 1.41 points above the HELOC average. The HELOC’s lower start comes with the risk that prime rises; the loan’s higher rate buys a payment that can’t change. Our HELOC vs home equity loan guide works through when each one wins, and the fixed-rate HELOC guide covers lines that let you lock part of the balance.

How to compare second mortgage offers: APR and fees

APR is meant to combine rate and costs, but it works differently for the two products. The CFPB’s HELOC booklet explains that a home equity loan’s APR takes into account the interest rate plus points and other finance charges, while a HELOC’s APR is based on the periodic interest rate alone and does not include points or other charges. So a HELOC’s APR can look low even when its fees are high: compare its fees line by line.

For home equity loans, APR does the work for you. Example: two offers for $50,000 over 15 years.

APR solved from the payment and the amount you actually receive. Calculated by LenderMatch. Illustrations, not quotes.

Offer A has the lower rate but the higher APR. Its payment is $7.35 a month lower, so the $1,500 in fees takes about 204 months to earn back, longer than the 15-year term. Unless something else differs, Offer B costs less. The same math applies to HELOC fees: compare an offer’s closing costs and annual fee against how much its margin saves you each year. Our guide to home equity closing costs lists the fees to ask about.

Second mortgage or cash-out refinance?

A second mortgage can cost a higher rate than a refinance and still be cheaper, because it leaves your first mortgage alone. Say you owe $250,000 at 4.00% and need $50,000. A 15-year home equity loan at 8.76% (the Bankrate average) gives you a blended rate of about 4.79% on the $300,000 total. A cash-out refinance at 7.32% (the Freddie Mac average) would put the whole $300,000 at 7.32%. If your first mortgage rate is close to today’s, the gap narrows. Try your numbers in the blended rate calculator, and see home equity loan vs cash-out refinance for the full comparison.

How to get a lower second mortgage rate

• Borrow less. A lower combined loan-to-value usually prices better.
• Check your credit first. Fix errors on your reports before you apply, and read does rate shopping hurt your credit? before you collect quotes.
• Match the product to the need. A HELOC for costs that arrive over time, a fixed home equity loan for one known amount.
• Compare several lenders on the same day. Rates move, so quotes taken weeks apart aren’t a fair comparison.

Frequently asked questions

Are second mortgage rates higher than first mortgage rates?

Usually. The CFPB explains that a second-lien lender is paid only after the first if the home is sold to repay debts, and may not get back everything it is owed, which is one reason second mortgages often carry higher rates. On October 21, 2026, Bankrate’s average home equity loan rates (8.67% to 8.77%) were well above Freddie Mac’s 7.32% average 30-year fixed rate.

What are second mortgage rates right now?

As of October 21, 2026, Bankrate’s national averages were 7.36% for a HELOC and 8.67% for a 5-year, 8.77% for a 10-year and 8.76% for a 15-year home equity loan, based on a $30,000 amount, a 700 FICO score and 80% combined loan-to-value. Your own rate may be higher or lower.

Is a HELOC rate the same as a second mortgage rate?

A HELOC is one kind of second mortgage, along with the home equity loan. HELOC rates are usually variable, set as the prime rate plus a margin. Home equity loan rates are usually fixed when you close. See is a HELOC a second mortgage?

Why can a HELOC average be lower than a home equity loan average?

They are priced differently. A HELOC rate floats with prime, so the lender can raise it later if rates rise. A home equity loan fixes the rate for years, and the lender prices in that risk. On October 21, 2026, Bankrate’s home equity loan averages ran about 1.3 to 1.4 points above its HELOC average.

Does LenderMatch check my credit?

No. LenderMatch never pulls your credit. A lender you choose may check it, with your permission, when you apply.

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