Can your home equity loan interest rate change after approval?

Borrowing from your home equity with a home equity loan can be a cost-effective financial move in most economic climates. But in the economy of April 2025, it's one of the rare ones available. Thanks to an extended fight against inflation and an elevated federal funds rate, among other factors, interest rates on popular options like personal loans and credit cards are now in the double digits. Credit cards, in particular, have average interest rates of around 23% right now. Not only is that a record high, but it's about three times the cost of a home equity loan, with an average rate of 8.37% as of April 2.

And home equity loan interest rates have been declining, both in 2025 and for much of 2024. Understanding this dynamic, then, and with the knowledge that the average home equity amount is high now, many prospective borrowers may be wondering about their home equity loan options. The benefits here are two-fold: a high amount of equity to borrow from and a low, fixed-interest rate that the home equity loan comes with. But can that rate change after you've been approved for the loan? 

That's an important question homeowners may want to consider, especially if they're trying to take advantage of a temporary drop in rates. Below, we'll detail what to know now.

See what home equity loan rate you'd currently qualify for here.

Can your home equity loan interest rate change after approval?

In short, yes, your home equity loan interest rate can change after you are approved for the loan. If you didn't lock in your rate upon approval, it can change and likely will until it's locked in with the lender. That said, this may not always be detrimental. If the home equity loan rate climate has cooled since your approval (rates change often), it could actually prove to be beneficial, as the rate you ultimately lock-in will be lower than the one you first secured. At the same time, if rates ticked up during that time, your home equity loan rate likely will, too. Similarly, if your credit score or borrowing profile changed, then the rate could change in reply. Fortunately, there are multiple ways in which you can avoid having your home equity loan rate change after approval:

Lock it in: Got approved for a home equity loan at a rate you feel is affordable? Then consider locking it in right away, before the interest rate climate has a chance to impact it one way or the other.

Keep your credit score high: The home equity loan rate you secure with a high credit score won't be the one you're offered with a lower one, even if the rate drop isn't substantial. So be sure to keep your credit health in check, both during the home equity loan approval process and over the full repayment period.

Be ready to act: Requests for documentation or additional information from lenders can slow the process between approval and home equity loan closing. That delay could result in a change to the home equity loan rate you were initially approved for, so be prepared to respond to requests for information and documentation promptly to avoid this scenario.

Start exploring your home equity loan options online now.

Don't forget about HELOCs

While a continuously changing interest rate may seem risky, it could be a benefit if you pursue a home equity line of credit (HELOC) instead of a home equity loan now. That's because HELOCs have variable interest rates likely to change monthly for borrowers. And that's a major advantage now that HELOC rates have declined by almost two full percentage points since September 2024 and could fall further this April and spring. So, if you're comfortable paying a different rate and amount each month, now could be a smart time to explore your HELOC options or, at a minimum, to compare them to what's available with fixed-rate home equity loan offers.

The bottom line

A home equity loan interest rate can and likely will change in the time between being approved for the loan and closing on it, unless you lock it in. So consider locking it right away. You could always explore unlocking and relocking a new, lower rate before closing if your lender allows it. And look into HELOCs as a viable alternative now, too. HELOC rates are more than 25 basis points cheaper than home equity loans at the start of April 2025 and they are poised to drop further soon. 

Even if your home equity loan rate falls after you've closed on it, you'll still need to refinance (and pay refinancing closing costs), to lock in that lower rate. Finally, no matter which option you choose, be sure to only borrow an amount of equity that you can comfortably afford to pay back. With your home functioning as collateral in these exchanges, it could be repossessed if you're unable to make repayments as agreed to.