Here's how much a $40,000 home equity loan will cost per month in 2026

Whether you're borrowing a small amount of money worth a few thousand dollars or a larger one worth five figures, it's always critical to start the process by calculating your repayment costs with precision. And that's especially true when borrowing from your home's equity. Since your home serves as collateral in these instances, you stand to jeopardize your homeownership if you're ultimately unable to make your payments as agreed to.

Fortunately, borrowing with a home equity loan now, at the start of 2026, is more affordable than it's been in quite some time. Currently, a home equity loan is significantly less expensive than a personal loan and a credit card, making it a viable option for homeowners in need of a large amount of money, such as $40,000. This is due, in large part, to consistent interest rate cuts from the Federal Reserve, the latest of which was issued on December 10.

So, how much will a $40,000 home equity loan cost borrowers monthly now, in 2026? Below, we'll detail all of the numbers you need to know before signing on the dotted line.

See how much home equity you'd be eligible to borrow here.

How much will a $40,000 home equity loan cost per month in 2026?

Unlike a home equity line of credit (HELOC), home equity loans employ fixed interest rates that remain constant throughout the full repayment cycle. This makes budgeting with this product simple and accurate. Here's how much a $40,000 home equity loan will cost per month in 2026, through the full repayment period, calculated against today's average rates and two common terms:

• 10-year home equity loan at 8.16%: $488.70 per month
• 15-year home equity loan at 8.10%: $384.57 per month

These loans, as mentioned above, are cheaper now than they were at a similar point in 2025, thanks to the recent interest rate cuts. For context, here's what a loan of this same size would have cost homeowners in February 2025:

• 10-year home equity loan at 8.57%: $497.44 per month 
• 15-year home equity loan at 8.52%: $394.36 per month

Payments on a loan of this size, then, are around $10 cheaper each month than they were one year ago. And while that may not seem like a lot on paper, it adds up to hundreds of dollars per year and significantly more over the full repayment period. Plus, with the option to refinance the loan always available, should rates materially fall further in the future, this could easily be the best way to borrow $40,000 right now.

Get started with a home equity loan online now.

Don't forget about the other home equity loan benefits

While affordability and a fixed rate in an unpredictable rate climate are both key benefits of a home equity loan now, there are others to be aware of as well. Home equity loan interest could be tax-deductible if the loan is used for eligible home repair projects and improvements. 

And with the average home equity level hitting a record high in 2025, this could easily be your most robust funding source. With your home functioning as collateral, qualifying for a $40,000 loan may be much simpler and quicker than it would be if you pursued an unsecured loan. Finally, there are virtually no limits on what you can use the funds for, giving you flexibility to pay expenses both large and small with the funds, as needed.

The bottom line

A $40,000 home equity loan comes with monthly payments ranging from $385 to $489 per month now, in early 2026. That makes this specific product one of the very cheapest for those in need of this much money currently. Just be sure to calculate your budget precisely so you know exactly how much you can actually afford to borrow and be careful with what expenses you ultimately use it for, as some will be far more valuable than others.