This is the time to compare HELOCs and home equity loans if you're planning on borrowing in 2026. DEV IMAGES/Getty Images

Home equity borrowing rates have been slowly falling over the last few months, dropping to an average of just under 8% , helping to ease the cost of tapping into your home's equity . That has made home equity borrowing an option worth considering for a lot of homeowners, especially when you factor in that the average homeowner has hundreds of thousands of dollars worth of equity to borrow against.

However, the Federal Reserve's decisions to keep rates mostly steady in 2025 may affect borrowers' decisions in 2026. If you plan to tap into your home's equity for financing next year, you have two main options: a home equity line of credit (HELOC) and a hom

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