Home Improvement Loan Rates and Approval Data (HMDA 2025)
- Primary data
- HMDA 2025 Snapshot National Loan-Level Dataset, loan purpose = home improvement
- Data period
- Calendar year 2025 (originations); 2018 to 2025 for volume and denial trend
- Latest release used
- 2026-06-23
- Next release
- 2026 HMDA data: not yet announced (2025 data appeared on 2026-03-31 and 2026-06-23)
- Geography
- United States, 50 states and DC
- Sources
- 27 (23 Tier 1)
Home improvement loan rates on mortgage-secured loans had a 7.39% median in 2025 across 548,060 HMDA originations, with the middle half between 6.49% and 8.24%. First-lien closed-end loans ran 6.75%, second-lien loans 7.75%. Lenders denied 34.8% of decided applications, and 98.1% of loans priced below the 11.50% bank personal loan average.
This month in brief
- The median note rate on 548,060 owner-occupied home improvement loans and lines originated in 2025 was 7.39%, down from 8.25% in 2024 (HMDA).
- Closed-end first-lien loans had the lowest median at 6.75%; closed-end second liens cost 7.75%, a gap of 1.00 points.
- Home equity lines made up 78.8% of in-scope originations, and 27.3% of those lines opened with an introductory rate period of 2 months or more.
- 98.1% of in-scope loans (537,647) priced below the Federal Reserve's 11.50% average 24-month personal loan rate at commercial banks for 2025.
- Lenders denied 34.8% of home improvement applications that reached a decision in 2025, the lowest rate in the 2018 to 2025 series; debt-to-income was cited in 41.0% of denials.
- State medians ran from 5.90% in Hawaii to 8.00% in Alaska and South Dakota; denial rates from 18.7% in North Dakota to 48.6% in Texas.
- Originations rose 3.6% to 613,448 in 2025 but remained 21.9% below the 2022 peak of 785,490.
- HMDA covers only loans secured by a dwelling. Unsecured personal loans used for remodeling are not in these figures.
Home improvement loan rates in 2025: 7.39% at the median, 6.49% to 8.24% for the middle half
Across 548,060 owner-occupied home improvement loans and lines originated in 2025, half carried a note rate between 6.49% and 8.24%. Product and lien position explain most of the spread: the cheapest group, closed-end first liens, sat at 6.75%, and the most expensive, closed-end second liens, at 7.75%.
These are rates lenders reported to regulators under the Home Mortgage Disclosure Act, not advertised rates. The figures come from the HMDA 2025 Snapshot loan-level file, filtered to loan purpose 2 (home improvement), originated loans, consumer purpose, principal residences and 1 to 4 unit homes.
| Product and lien | Loans (n) | 10th pct rate | 25th pct rate | Median rate | 75th pct rate | 90th pct rate | Median loan amount |
|---|---|---|---|---|---|---|---|
| Closed-end loan, first lien | 33,408 | 5.75% | 6.24% | 6.75% | 7.25% | 7.65% | $105,000 |
| Closed-end loan, subordinate lien | 83,054 | 6.25% | 6.99% | 7.75% | 8.625% | 9.50% | $55,000 |
| Home equity line (HELOC), first lien | 81,517 | 4.99% | 6.22% | 7.24% | 7.75% | 8.50% | $105,000 |
| Home equity line (HELOC), subordinate lien | 350,081 | 5.49% | 6.49% | 7.50% | 8.25% | 9.50% | $95,000 |
| All closed-end loans | 116,462 | 6.00% | 6.625% | 7.375% | 8.25% | 9.25% | see segments |
| All HELOCs | 431,598 | 5.49% | 6.49% | 7.40% | 8.19% | 9.35% | see segments |
| All home improvement originations in scope | 548,060 | 5.65% | 6.49% | 7.39% | 8.24% | 9.30% | $85,000 |
| HELOCs with intro period of 2+ months | 117,772 | 3.99% | 4.99% | 5.99% | 6.99% | 8.00% | not computed |
| HELOCs without a multi-month intro period | 313,826 | 6.25% | 7.00% | 7.59% | 8.49% | 9.59% | not computed |
Originated loans, principal residence, 1 to 4 units, consumer purpose, numeric rate above 0. Loan amounts are HMDA midpoints of $10,000 bands; HELOC amounts are credit lines.
Source: [1][7][8] FFIEC / Consumer Financial Protection Bureau; FFIEC / Consumer Financial Protection Bureau; Consumer Financial Protection Bureau
Note rate: The interest rate on the loan at closing or account opening, as defined in Regulation C section 1003.4(a)(21). It is not the APR, so it leaves out points and fees. For an adjustable line whose rate is unknown at opening, the lender reports the fully-indexed rate.
The 10th to 90th percentile range ran from 5.65% to 9.30%, so 8 in 10 borrowers landed inside a band of 3.65 points. The spread inside each product was narrower for closed-end first liens (6.24% to 7.25%) than for subordinate HELOCs (6.49% to 8.25%).
For what a kitchen or bath project itself costs, see the remodel cost calculator and how we price remodels.
Unsecured personal loans for remodels are not in these numbers
HMDA records only credit secured by a dwelling. Personal loans, credit cards, contractor financing and retailer cards used to pay for a remodel are invisible here, and so are cash-out refinances that also fund a remodel.
Under Regulation C, a loan that is both a home improvement loan and a refinancing or cash-out refinancing is reported as the refinance. Lenders may also rely on the applicant's own statement of purpose. The home improvement category therefore captures standalone home equity loans and lines whose stated purpose is improvement, plus first-lien loans taken for that purpose.
Of 613,448 home improvement originations in 2025, 548,060 (89.3%) survived the filters used for rates. The largest single exclusion was 26,099 loans whose rate field reads "Exempt": smaller lenders that qualify for partial exemptions under Regulation C section 1003.3(d) do not have to report it. Their pricing may differ from the lenders that do report.
Subordinate liens made up 79.0% of in-scope originations and HELOCs 78.8%. Most home improvement borrowing that reaches HMDA is a second claim on a home that already carries a mortgage.
A second lien added 1.00 point to closed-end loans
Lenders charged closed-end subordinate-lien home improvement loans a 7.75% median in 2025 against 6.75% for first liens. Across all products, subordinate liens ran 0.51 points above first liens.
Subordinate lien: A loan whose claim on the home ranks behind an existing first mortgage. If the home is sold or foreclosed, the first lien is paid first.
The size of the loan moves with lien position too. The median closed-end second lien was $55,000, while the median closed-end first lien was $105,000. Terms differ as well: the most common term for closed-end second liens in the file was 180 months, against 360 months for closed-end first liens.
HELOCs show a smaller lien gap: 7.24% for first-lien lines and 7.50% for subordinate lines. Part of that gap is masked by introductory pricing, covered next.
98.1% of secured remodel loans came in under the bank personal loan average
The Federal Reserve's G.19 put the 2025 average rate on 24-month personal loans at commercial banks at 11.50%. Only 1.9% of in-scope HMDA home improvement loans priced at or above that level.
Median note rate by product, and 2025 benchmark averages
Source: HMDA 2025 Snapshot; Federal Reserve G.19 and H.15; Freddie Mac PMMS via FRED; KBR analysis
The median secured home improvement loan priced 4.11 points below the G.19 personal loan average in 2025. The gap ranged from 3.75 points for closed-end second liens to 4.75 points for closed-end first liens. Against the 2025 average prime rate of 7.37% (H.15 via FRED), the median home improvement loan sat 0.02 points higher, and the first-lien HELOC median 0.13 points lower.
| Rate measure (2025) | Rate | Source | Gap to G.19 personal loan (11.50%) | Gap to average prime (7.37%) |
|---|---|---|---|---|
| HMDA median, Closed-end loan, first lien | 6.75% | HMDA 2025 | -4.75 | -0.62 |
| HMDA median, Closed-end loan, subordinate lien | 7.75% | HMDA 2025 | -3.75 | +0.38 |
| HMDA median, Home equity line (HELOC), first lien | 7.24% | HMDA 2025 | -4.26 | -0.13 |
| HMDA median, Home equity line (HELOC), subordinate lien | 7.50% | HMDA 2025 | -4.00 | +0.13 |
| HMDA median, All home improvement originations in scope | 7.39% | HMDA 2025 | -4.11 | +0.02 |
| HMDA median, cash-out refinance (closed-end first lien) | 6.50% | HMDA 2025 | -5.00 | -0.87 |
| Freddie Mac PMMS 30-year fixed, 2025 average | 6.60% | Freddie Mac via FRED | -4.90 | -0.77 |
| Bank prime loan rate, 2025 average | 7.37% | Federal Reserve H.15 via FRED | -4.13 | 0.00 |
| 24-month personal loan, commercial banks, 2025 | 11.50% | Federal Reserve G.19 | 0.00 | +4.13 |
Gaps in percentage points. Prime and PMMS are 2025 averages of published daily and weekly values.
Source: [1][4][10][13][19] FFIEC / Consumer Financial Protection Bureau; FFIEC / Consumer Financial Protection Bureau; Board of Governors of the Federal Reserve System; Federal Reserve Bank of St. Louis (FRED), from Federal Reserve H.15; Federal Reserve Bank of St. Louis (FRED), from Freddie Mac PMMS
These comparisons put a secured note rate beside an unsecured bank rate. Personal loan borrowers do not pledge their home and may have different credit profiles. G.19 covers commercial banks only, so it leaves out finance companies and online lenders. The comparison describes price levels; it does not say which product suits a given household.
Cash-out refinances priced at 6.50%, a quarter point under first-lien improvement loans
Closed-end first-lien cash-out refinances on owner-occupied homes had a 6.50% median rate in 2025 across 513,136 loans. That is 0.25 points below the 6.75% median on closed-end first-lien home improvement loans, but the loans were much larger.
The median cash-out refinance was $245,000, because it replaces the existing mortgage, against $105,000 for a first-lien home improvement loan (HMDA 2025, cash-out records). The 2025 Freddie Mac 30-year average of 6.60% sat between the two medians.
Cash-out refinancing resets the rate on the whole mortgage balance. With the 30-year average at 7.32% on October 22, 2026 (Freddie Mac), the trade-off depends on the rate on the existing loan. HMDA does not show the rate a borrower gave up.
HELOC medians fell about a point from 2024 to 2025, in step with prime
The in-scope median dropped from 8.25% in 2024 to 7.39% in 2025. HELOC medians moved most, closed-end first liens least.
By product and lien, with the average prime rate
Source: HMDA 2024 One-Year and 2025 Snapshot; Federal Reserve H.15 via FRED; KBR analysis
First-lien HELOC medians fell 1.01 points and subordinate HELOC medians 1.0 point. The average prime rate fell 0.94 points, from 8.31% in 2024 to 7.37% in 2025, after three prime cuts in late 2024 and three more in late 2025. Closed-end first-lien medians moved only 0.125 point, closer to the small change in the 30-year mortgage average (6.72% to 6.60%).
The 2024 comparison uses the One-Year 2024 dataset (HMDA 2024), with the same filters (530,592 loans). Measured against the same 11.50% threshold, 95.4% of 2024 loans priced below it.
Hawaii borrowers paid 5.90% at the median; Alaska and South Dakota 8.00%
State medians for 2025 ranged across about two points. Every state had at least 96.2% of its in-scope loans below the 11.50% personal loan benchmark.
Originated, owner-occupied, mortgage-secured loans and lines
Source: FFIEC/CFPB HMDA 2025 Snapshot; KBR analysis
Low medians in Hawaii (5.90%), Pennsylvania (6.74%) and North Carolina (6.75%) sit beside high ones in Alaska and South Dakota (8.00%) and Colorado (7.89%). State medians reflect each state's mix of products and lenders, so a high median does not mean the same loan costs more there.
Median loan size ranged from $165,000 in Hawaii to $55,000 in Iowa, Kansas, Mississippi, Nebraska, North Dakota and West Virginia. California's median was $125,000. The full state file below includes first-lien and subordinate-lien medians where at least 30 loans were available.
Show all 51 rows
| State | Originations (all) | Loans with usable rate | Median rate | 25th pct | 75th pct | First-lien median | Subordinate-lien median | Median loan amount | Denial rate | Share below 11.50% |
|---|---|---|---|---|---|---|---|---|---|---|
| Alabama | 8,263 | 7,371 | 7.00% | 4.99% | 8.125% | 6.50% | 7.50% | $65,000 | 35.7% | 97.8% |
| Alaska | 681 | 619 | 8.00% | 7.00% | 9.00% | 7.125% | 8.50% | $85,000 | 36.5% | 98.1% |
| Arizona | 15,442 | 14,419 | 7.00% | 6.49% | 8.00% | 6.50% | 7.25% | $105,000 | 32.4% | 97.9% |
| Arkansas | 4,895 | 3,954 | 7.75% | 6.875% | 8.50% | 7.25% | 7.75% | $65,000 | 33.2% | 98.0% |
| California | 51,902 | 47,283 | 7.60% | 6.49% | 8.425% | 6.875% | 7.75% | $125,000 | 36.6% | 97.9% |
| Colorado | 12,231 | 11,179 | 7.89% | 7.50% | 8.39% | 7.625% | 7.90% | $95,000 | 31.0% | 98.2% |
| Connecticut | 8,806 | 7,377 | 6.90% | 5.99% | 7.75% | 6.49% | 7.00% | $105,000 | 32.8% | 98.5% |
| Delaware | 2,611 | 2,394 | 7.40% | 6.33% | 8.24% | 7.00% | 7.50% | $105,000 | 37.0% | 98.4% |
| District of Columbia | 660 | 573 | 7.50% | 6.49% | 8.43% | 7.25% | 7.50% | $125,000 | 46.1% | 99.5% |
| Florida | 35,889 | 32,974 | 7.45% | 6.49% | 8.34% | 6.99% | 7.50% | $95,000 | 43.1% | 97.2% |
| Georgia | 18,036 | 15,516 | 7.50% | 6.50% | 8.50% | 6.95% | 7.625% | $85,000 | 40.9% | 97.5% |
| Hawaii | 1,833 | 1,567 | 5.90% | 5.65% | 6.20% | 5.85% | 5.90% | $165,000 | 44.4% | 99.9% |
| Idaho | 7,155 | 6,412 | 7.25% | 7.00% | 8.00% | 7.00% | 7.50% | $105,000 | 24.4% | 99.0% |
| Illinois | 17,909 | 15,916 | 7.75% | 7.00% | 8.74% | 7.25% | 7.99% | $75,000 | 39.0% | 97.0% |
| Indiana | 16,960 | 15,433 | 7.50% | 6.49% | 8.50% | 7.25% | 7.50% | $65,000 | 30.3% | 97.0% |
| Iowa | 6,855 | 5,713 | 6.99% | 6.49% | 7.75% | 6.50% | 7.00% | $55,000 | 19.2% | 98.8% |
| Kansas | 5,230 | 4,379 | 7.50% | 6.49% | 8.00% | 7.45% | 7.55% | $55,000 | 28.6% | 98.8% |
| Kentucky | 9,075 | 7,840 | 7.50% | 6.74% | 8.35% | 7.25% | 7.50% | $65,000 | 30.8% | 97.4% |
| Louisiana | 3,422 | 2,553 | 7.25% | 4.99% | 8.65% | 6.625% | 7.75% | $75,000 | 41.3% | 96.5% |
| Maine | 4,851 | 3,699 | 7.49% | 6.92% | 7.75% | 7.25% | 7.50% | $75,000 | 26.1% | 98.7% |
| Maryland | 10,933 | 10,134 | 7.49% | 6.24% | 8.59% | 6.70% | 7.50% | $105,000 | 40.9% | 97.1% |
| Massachusetts | 17,624 | 15,188 | 7.00% | 6.50% | 7.64% | 6.99% | 7.00% | $105,000 | 31.6% | 99.4% |
| Michigan | 25,030 | 23,290 | 7.50% | 7.00% | 8.25% | 7.25% | 7.59% | $65,000 | 31.1% | 97.7% |
| Minnesota | 12,687 | 11,378 | 7.25% | 6.50% | 8.00% | 7.10% | 7.25% | $65,000 | 24.0% | 99.2% |
| Mississippi | 3,127 | 2,387 | 7.13% | 4.99% | 8.00% | 6.75% | 7.50% | $55,000 | 41.8% | 98.2% |
| Missouri | 11,757 | 9,616 | 7.30% | 5.99% | 8.24% | 6.99% | 7.50% | $65,000 | 32.3% | 98.8% |
| Montana | 2,055 | 1,807 | 7.75% | 7.00% | 8.25% | 7.50% | 7.75% | $75,000 | 28.2% | 98.9% |
| Nebraska | 3,498 | 2,899 | 7.24% | 6.375% | 8.25% | 7.00% | 7.25% | $55,000 | 24.5% | 98.1% |
| Nevada | 4,707 | 4,345 | 7.75% | 6.74% | 8.60% | 6.875% | 7.95% | $85,000 | 40.9% | 97.0% |
| New Hampshire | 5,037 | 4,649 | 7.25% | 6.75% | 7.75% | 7.08% | 7.29% | $105,000 | 28.8% | 98.8% |
| New Jersey | 19,408 | 17,567 | 7.34% | 6.49% | 8.25% | 7.00% | 7.49% | $105,000 | 36.5% | 98.0% |
| New Mexico | 2,455 | 2,134 | 7.63% | 6.75% | 8.379% | 7.25% | 7.875% | $65,000 | 33.6% | 96.2% |
| New York | 31,068 | 28,469 | 6.875% | 5.99% | 7.90% | 6.50% | 6.99% | $105,000 | 38.2% | 99.2% |
| North Carolina | 24,703 | 22,890 | 6.75% | 6.49% | 7.75% | 6.75% | 6.79% | $85,000 | 36.9% | 98.3% |
| North Dakota | 1,283 | 1,147 | 7.64% | 7.00% | 8.00% | 6.95% | 7.75% | $55,000 | 18.7% | 98.8% |
| Ohio | 31,623 | 29,745 | 7.625% | 7.00% | 8.50% | 7.40% | 7.75% | $65,000 | 34.8% | 97.0% |
| Oklahoma | 5,739 | 4,613 | 7.50% | 6.99% | 8.49% | 7.375% | 7.75% | $65,000 | 29.6% | 98.0% |
| Oregon | 10,811 | 10,220 | 7.50% | 7.25% | 8.24% | 7.49% | 7.50% | $75,000 | 26.9% | 98.7% |
| Pennsylvania | 38,099 | 33,945 | 6.74% | 5.74% | 7.65% | 6.50% | 6.74% | $75,000 | 31.8% | 98.4% |
| Rhode Island | 3,598 | 3,365 | 6.99% | 6.50% | 7.65% | 6.90% | 6.99% | $105,000 | 36.4% | 99.2% |
| South Carolina | 9,008 | 8,005 | 7.30% | 6.50% | 8.25% | 6.99% | 7.50% | $105,000 | 36.0% | 98.4% |
| South Dakota | 1,216 | 1,003 | 8.00% | 7.40% | 8.50% | 7.75% | 8.00% | $65,000 | 23.8% | 98.5% |
| Tennessee | 14,177 | 12,546 | 7.26% | 5.99% | 8.24% | 6.99% | 7.50% | $85,000 | 34.3% | 98.2% |
| Texas | 19,087 | 16,642 | 7.375% | 6.49% | 8.15% | 6.875% | 7.65% | $95,000 | 48.6% | 98.0% |
| Utah | 10,492 | 9,892 | 7.24% | 6.49% | 7.95% | 6.74% | 7.24% | $85,000 | 25.6% | 98.2% |
| Vermont | 1,971 | 1,752 | 7.00% | 6.50% | 7.50% | 6.99% | 7.00% | $65,000 | 24.0% | 99.4% |
| Virginia | 19,310 | 17,293 | 7.50% | 6.65% | 8.34% | 7.00% | 7.625% | $95,000 | 31.9% | 98.2% |
| Washington | 18,288 | 16,988 | 7.50% | 6.49% | 8.20% | 7.24% | 7.50% | $105,000 | 31.6% | 98.8% |
| West Virginia | 2,372 | 2,030 | 7.24% | 5.691% | 8.50% | 6.83% | 7.50% | $55,000 | 38.8% | 98.1% |
| Wisconsin | 17,996 | 13,959 | 7.00% | 6.50% | 7.75% | 7.00% | 7.02% | $65,000 | 21.8% | 99.0% |
| Wyoming | 946 | 832 | 7.75% | 6.99% | 8.50% | 7.138% | 7.95% | $75,000 | 25.8% | 98.2% |
Rates and amounts use the in-scope sample; originations and denial rates use all home improvement records. Lien medians shown where n is 30 or more.
Source: [1] FFIEC / Consumer Financial Protection Bureau
Lenders turned down 34.8% of decided applications, and debt load was the top reason
Of 1,020,569 home improvement applications that reached a decision in 2025, 354,761 were denied. Debt-to-income ratio was cited in 41.0% of denials that listed a reason.
Share of denials citing each reason (up to four per denial)
Source: FFIEC/CFPB HMDA 2025 Snapshot; KBR analysis
| Denial reason (any of up to 4 reported) | Denials citing it | Share of denials with a reason |
|---|---|---|
| Debt-to-income ratio | 143,369 | 41.0% |
| Credit history | 127,186 | 36.4% |
| Collateral | 70,067 | 20.0% |
| Other | 47,385 | 13.6% |
| Credit application incomplete | 33,823 | 9.7% |
| Unverifiable information | 16,761 | 4.8% |
| Employment history | 4,425 | 1.3% |
| Insufficient cash | 2,172 | 0.6% |
| Mortgage insurance denied | 17 | 0.0% |
Base: 349,565 denials with at least one reason; 5,196 denials with reasons reported as Exempt are excluded. Up to four reasons per denial.
Source: [1] FFIEC / Consumer Financial Protection Bureau
Denial rate is denied applications divided by applications that were originated, approved but not accepted, or denied. Withdrawn applications (99,663) and files closed as incomplete (74,096) are left out. Lenders can list up to four reasons, so shares add to more than 100%.
Home improvement applications that reached a decision
Source: FFIEC/CFPB HMDA 2025 Snapshot; KBR analysis
Denial rates stayed between 20.6% and 24.9% for debt-to-income ratios up to 49%, then rose to 52.4% at 50% to 60% and 93.2% above 60%. Applicants under 20% were denied 33.1% of the time, higher than the 20% to 49% bands; the public file does not show why.
| Debt-to-income ratio | Applications with a decision | Denied | Denial rate |
|---|---|---|---|
| Under 20% | 96,511 | 31,925 | 33.1% |
| 20% to 29% | 171,677 | 35,347 | 20.6% |
| 30% to 35% | 133,565 | 27,917 | 20.9% |
| 36% to 42% | 182,294 | 38,040 | 20.9% |
| 43% to 49% | 165,339 | 41,158 | 24.9% |
| 50% to 60% | 86,691 | 45,439 | 52.4% |
| Over 60% | 119,952 | 111,743 | 93.2% |
Bands as published by HMDA, with single values 36 to 49 grouped by KBR. Applications with Exempt or missing ratios are excluded.
Source: [1] FFIEC / Consumer Financial Protection Bureau
By state, Texas (48.6%), the District of Columbia (46.1%) and Hawaii (44.4%) had the highest 2025 denial rates; North Dakota (18.7%) and Iowa (19.2%) the lowest.
Originations rose 3.6% in 2025 but stayed 21.9% under the 2022 peak
Lenders originated 613,448 home improvement loans and lines in 2025 against 785,490 in 2022. The sum of reported loan amounts reached $84.3 billion, up from $71.2 billion in 2024.
Loans and lines originated, all loan types
Source: FFIEC/CFPB HMDA Data Browser aggregations
| Year | Applications | Originations | Denied | Denial rate | Originated volume ($ billions) |
|---|---|---|---|---|---|
| 2018 | 1,194,169 | 568,778 | 449,387 | 42.9% | 59.8 |
| 2019 | 1,147,905 | 539,496 | 436,650 | 43.3% | 57.8 |
| 2020 | 917,960 | 452,045 | 309,813 | 39.1% | 54.9 |
| 2021 | 1,071,957 | 547,821 | 333,937 | 36.4% | 71.2 |
| 2022 | 1,490,696 | 785,490 | 463,183 | 35.9% | 98.5 |
| 2023 | 1,247,562 | 608,271 | 424,212 | 39.5% | 69.7 |
| 2024 | 1,205,589 | 592,198 | 380,301 | 37.4% | 71.2 |
| 2025 | 1,217,830 | 613,448 | 354,761 | 34.8% | 84.3 |
All loan types and liens. Denial rate = denied / (originated + approved not accepted + denied). Volume is the sum of rounded loan amounts.
Source: [2] FFIEC / Consumer Financial Protection Bureau
These counts come from the HMDA Data Browser aggregations and include all loan types and liens, so they are larger than the rate sample. The 2023 to 2024 change in applications (-3.4%) matches the 3% decline reported by NAHB from the same data. For who remodels and how much households spend, see home improvement statistics.
Interest is deductible only when the loan buys, builds or substantially improves the home
IRS Publication 936 for tax year 2025 says interest on a loan secured by the home cannot be deducted to the extent the proceeds were not used to buy, build or substantially improve that home.
The same publication limits deductible home mortgage interest to the first $750,000 of qualifying debt ($375,000 if married filing separately), with higher limits for debt taken on before December 16, 2017. The publication also says the interest can be deducted only by filers who itemize deductions on Schedule A.
Momentum and share analysis
Rate distribution by product and lien (insight 1)
Formula25th, 50th and 75th percentiles (linear interpolation) of interest_rate within each open-end x lien cell
Inputs: fact rows 15 to 33; tables/t1.csv; tables/t2_states.csv (fact sheet rows)
Result: All 7.39% (6.49% to 8.24%); closed-end first 6.75%; closed-end second 7.75%; HELOC first 7.24%; HELOC second 7.50%
Lien position is worth 1.00 point on closed-end loans.
Limitations: Note rate, not APR; partially exempt lenders excluded; HELOC rates include introductory rates.
Denial rate by state and reasons (insight 2)
Formuladenied / (originated + approved not accepted + denied); reason share = denials citing reason / denials with any reason
Inputs: fact rows 1 to 8, denial reason rows; tables/t5_reasons.csv (fact sheet rows)
Result: US 34.8%; high Texas 48.6%; low North Dakota 18.7%; DTI cited in 41.0%
Debt load and credit history drive most denials.
Limitations: Applicant-level credit scores are not public; a denial can have several reasons.
Median loan amount by state (insight 3)
Formulamedian of reported loan_amount for in-scope originations per state
Inputs: tables/t2_states.csv; fact row on $10,000 rounding (fact sheet rows)
Result: US $85,000; high Hawaii $165,000; low $55,000 in six states
Loan size follows home values more than rates do.
Limitations: Amounts are $10,000-band midpoints; HELOC amounts are credit limits, not balances drawn.
Spread to personal loan, prime and PMMS (insight 4)
Formulasegment median minus benchmark (G.19 2025 = 11.50; prime 2025 average = mean of daily DPRIME; PMMS 2025 average = mean of weekly MORTGAGE30US)
Inputs: derived d_g19_*, d_prime_*, d_pmms_cf; tables/t3_benchmarks.csv (fact sheet rows)
Result: Median 4.11 points under G.19; 0.02 points over prime; closed-end first lien 0.15 points over PMMS
Secured home improvement credit priced near prime and far under unsecured bank personal loans.
Limitations: Benchmarks are annual averages; loans close throughout the year; borrower pools differ.
Originations by year (insight 5)
Formulacount of action_taken = 1, loan_purpose = 2, by year; change = orig_t / orig_t-1 - 1
Inputs: fact rows for 2018 to 2025 trend; tables/t4_trend.csv (fact sheet rows)
Result: 613,448 in 2025, 3.6% vs 2024, -21.9% vs 2022
Volume recovered slightly in 2025 as rates eased.
Limitations: Older years come from the Data Browser's current dataset for each year, which can differ slightly from the original Snapshot.
SIGNATURE: share of secured home improvement loans priced below the bank personal loan rate
Formulacount(interest_rate < 11.50) / count(in-scope originations) x 100, on 2025 loan-level records
Inputs: fact rows 15 to 33 and G.19 2025 row; derived d_sig_* (fact sheet rows)
Result: 98.1% (537,647 of 548,060 loans); by segment 99.7% to 97.6%
Nearly every borrower who used home equity for a remodel in 2025 paid less than the average bank personal loan rate.
Limitations: Survivorship: the comparison covers approved, secured loans only; unsecured borrowers may not qualify for home equity credit.
HELOC introductory-rate discount
Formulamedian rate (intro period 0 or 1 month) minus median rate (intro period 2+ months)
Inputs: fact rows for intro_2_plus and intro_none_or_1 (fact sheet rows)
Result: 1.60 points; 27.3% of HELOCs had an intro period
Opening rates on a quarter of HELOCs understate what the line will cost later.
Limitations: Post-introductory rate is not reported.
Cash-out refinance comparison
Formulaclosed-end first-lien home improvement median minus closed-end first-lien cash-out refinance median
Inputs: fact rows for cash-out rate and closed-end first-lien rate (fact sheet rows)
Result: 0.25 points; cash-out median 6.50%
Cash-out loans were cheaper per point of rate but far larger.
Limitations: Cash-out loans also fund purposes other than remodeling.
Findings to track
- The median interest rate on in-scope home improvement originations was 7.39% in 2025, with a 25th to 75th percentile range of 6.49% to 8.24% (US, 548,060 loans).[1]
- Closed-end first-lien home improvement loans had a 6.75% median rate in 2025; closed-end subordinate-lien loans had 7.75% (US).[1]
- First-lien HELOCs opened in 2025 had a 7.24% median rate and subordinate-lien HELOCs 7.50% (US).[1]
- HELOCs opened with an introductory period of 2 months or more had a 5.99% median rate in 2025, 1.60 points below the 7.59% median for other HELOCs (US, KBR calculation).[1]
- 98.1% of 2025 in-scope home improvement originations carried a rate below 11.50%, the 2025 G.19 average for 24-month personal loans at commercial banks (US, KBR calculation).[1][10]
- The 2025 median of 7.39% sat 0.02 points above the 7.37% average bank prime rate for 2025 (US).[1][13]
- Closed-end cash-out refinances in 2025 had a 6.50% median rate, 0.25 points below closed-end first-lien home improvement loans, with a median loan of $245,000 (US).[4][1]
- The median in-scope rate fell 0.86 points from 2024 to 2025, while the average prime rate fell 0.94 points (US).[1][3][13]
- Lenders denied 354,761 of 1,020,569 home improvement applications that reached a decision in 2025, a 34.8% denial rate (US).[1]
- Debt-to-income ratio was cited in 41.0% of 2025 home improvement denials, credit history in 36.4% and collateral in 20.0% (US).[1]
- Applicants with a debt-to-income ratio over 60% were denied 93.2% of the time in 2025, against 20.6% at 20% to 29% (US).[1]
- Texas had the highest 2025 home improvement denial rate at 48.6% and North Dakota the lowest at 18.7%; 20 jurisdictions were above the national rate.[1]
- Hawaii had the lowest state median rate in 2025 at 5.90% and the highest median loan amount at $165,000.[1]
- Home improvement originations rose 3.6% from 592,198 in 2024 to 613,448 in 2025 (US).[2]
Questions people ask
What is a good interest rate for a home improvement loan?
In 2025 data, half of mortgage-secured home improvement loans priced between 6.49% and 8.24%, with a 7.39% median (HMDA). A closed-end first lien below 6.24% or a second lien below 6.99% would have been in the cheapest quarter for its type. Rates have moved since: the prime rate was 7.00% on October 23, 2026. This is a description of the data, not advice.
Is a HELOC better than a home improvement loan?
The data show price, not suitability. In 2025 subordinate HELOCs had a 7.50% median and closed-end second liens 7.75%. HELOC rates are usually variable and 27.3% of HELOCs opened at an introductory rate, so the opening rate can understate later cost. The FOMC raised its target range in September 2026, and prime moved up to 7.00%.
What credit score do you need for a home improvement loan?
The public HMDA file does not include credit scores, so no score threshold can be read from it. It does show that credit history was cited in 36.4% of 2025 home improvement denials and debt-to-income ratio in 41.0%. Lender requirements vary; check with lenders directly.
How much can I borrow for a home improvement loan?
The median in-scope 2025 home improvement loan or line was $85,000, the middle half ran $55,000 to $155,000, and 1 in 10 was $255,000 or more. HELOC amounts are credit limits. What a lender will offer depends on home equity and income. For project budgets see bathroom remodel cost and the remodel cost calculator.
Are home improvement loans tax deductible?
IRS Publication 936 (2025) says interest on a loan secured by the home is not deductible to the extent the proceeds were not used to buy, build or substantially improve the home, and caps deductible debt at $750,000 ($375,000 married filing separately) (IRS). Unsecured personal loan interest is not home mortgage interest. Not tax advice.
Download the data
Every table in this report is available as a CSV under CC BY 4.0. The fact sheet lists each value with its source URL and access date.
- derived_metrics.csv (CSV)
- fact_sheet.csv (CSV)
- Home improvement loan rates by product and lien, US, 2025 (CSV)
- Home improvement loan rates, amounts and denial rates by state, 2025 (CSV)
- 2025 home improvement loan medians beside Federal Reserve and Freddie Mac benchmarks (CSV)
- Home improvement applications, originations and denial rates, US, 2018 to 2025 (CSV)
- Reasons cited for denying home improvement applications, US, 2025 (CSV)
- Denial rate by debt-to-income ratio, home improvement applications, US, 2025 (CSV)
For journalists and researchers
If you cite only a few, cite these
- The median rate on a mortgage-secured home improvement loan in the US was 7.39% in 2025, based on 548,060 HMDA originations.[1]
- 98.1% of 2025 mortgage-secured home improvement loans priced below the Federal Reserve's 11.50% average 24-month personal loan rate.[1][10]
- HELOCs opened with an introductory rate in 2025 had a 5.99% median, 1.60 points below other HELOCs.[1]
Most quotable statistics
- The median rate on a mortgage-secured home improvement loan in the US was 7.39% in 2025, based on 548,060 HMDA originations.[1]
- 98.1% of 2025 mortgage-secured home improvement loans priced below the Federal Reserve's 11.50% average 24-month personal loan rate.[1][10]
- HELOCs opened with an introductory rate in 2025 had a 5.99% median, 1.60 points below other HELOCs.[1]
- Lenders denied 34.8% of US home improvement loan applications that reached a decision in 2025.[1]
- Closed-end second-lien home improvement loans cost 1.00 point more than first liens at the 2025 median (7.75% vs 6.75%).[1]
- Texas had the highest home improvement denial rate in 2025 at 48.6%; North Dakota the lowest at 18.7%.[1]
Press summary
Kitchen and Bath Renovators analyzed 548,060 home improvement loans and lines secured by owner-occupied homes in the 2025 Home Mortgage Disclosure Act Snapshot, released by the FFIEC on June 23, 2026. The median note rate was 7.39%, with half of loans between 6.49% and 8.24%. Closed-end first liens were cheapest at 6.75%; closed-end second liens cost 7.75%. 98.1% of loans priced below the Federal Reserve's 11.50% average for 24-month bank personal loans. One in four home equity lines opened at an introductory rate, 1.60 points under other lines. Lenders denied 34.8% of applications that reached a decision, most often citing debt-to-income ratio. Texas had the highest denial rate (48.6%) and Hawaii the lowest median rate (5.90%). HMDA excludes unsecured personal loans. Data tables are free to reuse under CC BY 4.0.
Suggested headlines
- Remodel borrowers paid a 7.39% median on home equity loans in 2025
- 98.1% of home-secured remodel loans beat the bank personal loan rate
- One in four HELOCs opened at a teaser rate 1.60 points below the rest
- Lenders denied 34.8% of home improvement loan applications in 2025
- Texas leads the nation in home improvement loan denials at 48.6%
How to cite this report
Kitchen and Bath Renovators. (2026). Home Improvement Loan Rates and Approval Data (HMDA 2025). Retrieved from https://kitchenandbathrenovators.com/research/home-improvement-loan-rates/
Reuse license
Data and tables are licensed CC BY 4.0. Attribution: “Source: Kitchen and Bath Renovators, Home Improvement Loan Rates and Approval Data (HMDA 2025)” with a link to this page.
Frequently asked questions
What was the median home improvement loan rate in 2025?
7.39% across 548,060 mortgage-secured, owner-occupied home improvement loans and lines originated in the US in 2025 (HMDA).
How many home improvement loans were made in 2025?
HMDA lenders originated 613,448 home improvement loans and lines in 2025, up 3.6% from 592,198 in 2024.
What share of home improvement loan applications are denied?
34.8% in 2025: 354,761 denials out of 1,020,569 applications that reached a decision. The rate was 43.3% in 2019.
Why are home improvement loan applications denied?
Debt-to-income ratio was cited in 41.0% of 2025 denials, credit history in 36.4%, collateral in 20.0% and an incomplete application in 9.7%.
Do second-lien home improvement loans cost more?
Yes in 2025 data: closed-end second liens had a 7.75% median and closed-end first liens 6.75%, a 1.00-point gap.
How do HELOC rates compare with the prime rate?
The 2025 median for all in-scope HELOCs was 7.40%, against a 7.37% average prime rate. First-lien HELOCs ran 7.24% and subordinate lines 7.50%.
Are personal loans more expensive than home equity borrowing?
The Federal Reserve's 2025 average for 24-month personal loans at commercial banks was 11.50%, against a 7.39% median for secured home improvement loans. 98.1% of secured loans priced below 11.50%.
Which state had the lowest home improvement loan rate?
Hawaii, with a 5.90% median in 2025. Alaska and South Dakota had the highest at 8.00%.
Which state denied the most home improvement applications?
Texas, at 48.6% in 2025. North Dakota had the lowest at 18.7%.
When was the 2025 HMDA data released?
The FFIEC announced the 2025 Snapshot National Loan-Level Dataset on June 23, 2026, reflecting data as of June 1, 2026, from 4,782 institutions. The CFPB published 2025 Modified LAR files on March 31, 2026.
Reproduce this analysis
Every figure comes from the files below. The scripts that pulled and computed them are kept with the report and can be re-run.
| Dataset | Publisher | Source | Query or filter | Rows used | Retrieved |
|---|---|---|---|---|---|
| HMDA 2025 Snapshot National Loan-Level Dataset (home improvement) | FFIEC / CFPB | File or endpoint | years=2025, loan_purposes=2, nationwide, all action_taken values | 1,217,830 records; 548,060 originations in rate scope | 2026-10-27 |
| HMDA 2024 One-Year National Loan-Level Dataset (home improvement) | FFIEC / CFPB | File or endpoint | years=2024, loan_purposes=2, nationwide; same filters as 2025 | 1,205,589 records; 530,592 in rate scope | 2026-10-27 |
| HMDA 2025 Snapshot, cash-out refinance originations | FFIEC / CFPB | File or endpoint | years=2025, loan_purposes=32, actions_taken=1; closed-end first lien, owner-occupied, 1 to 4 units, consumer purpose | 953,349 records; 513,136 in scope | 2026-10-27 |
| HMDA Data Browser aggregations, home improvement, 2018 to 2025 | FFIEC / CFPB | File or endpoint | nationwide aggregations by year, loan_purposes=2, actions_taken=1 to 8 | 8 years x 8 action codes | 2026-10-27 |
| G.19 Consumer Credit, Terms of Credit, 24-month personal loan | Federal Reserve Board | File or endpoint | Commercial bank interest rates, personal loans 24-month, annual 2021 to 2025 and latest months; FRED TERMCBPER24NS for quarterly values | 5 annual values; 4 quarterly 2025 values | 2026-10-27 |
| Bank prime loan rate, daily (H.15) | Federal Reserve Board via FRED | File or endpoint | DPRIME, calendar-year means for 2024 and 2025 | all business days 2024 and 2025 | 2026-10-27 |
| Freddie Mac PMMS 30-year fixed | Freddie Mac via FRED | File or endpoint | MORTGAGE30US, calendar-year means for 2024 and 2025 | weekly values 2024 and 2025 | 2026-10-27 |
Data quality and exclusions
- Started from 1,217,830 home improvement records for 2025; kept 613,448 originations for rate and amount work.
- Removed 26,099 originations with interest_rate = Exempt (partially exempt lenders under Regulation C 1003.3(d)).
- Removed 1,346 originations with interest_rate = NA and 4,000 with a rate of 0 (likely subsidized or deferred repair programs; not market pricing).
- Removed 18,875 business-purpose loans, 1,193 reverse mortgages, 13,872 loans on second homes or investment property and 3 multifamily loans.
- Result: 548,060 loans (89.3% of originations). No in-scope rate exceeded 25%.
- Denial reasons: 5,196 denials reported reasons as Exempt and were left out of reason shares; 349,565 denials form the base.
- Cash-out comparison: from 953,349 cash-out originations, removed 18,341 Exempt rates, 951 NA or zero rates, 121,926 business, reverse, non-owner or multifamily loans and 298,995 that were not closed-end first liens.
- Loan amounts in the public file are midpoints of $10,000 bands; medians therefore land on values ending in 5,000.
Methodology
Source selection: loan-level rates, amounts and outcomes come from the HMDA 2025 Snapshot National Loan-Level Dataset, downloaded from the keyless FFIEC/CFPB Data Browser API filtered to loan_purpose = 2. Benchmarks come from Federal Reserve releases G.19 and H.15, FOMC statements and Freddie Mac's PMMS, with daily and weekly series read from FRED. Tax rules come from IRS Publication 936 (2025). Lender pages are used only to compare advertised ranges.
Inclusion: originated loans (action_taken = 1) with a numeric interest rate above 0, not primarily for business purposes, not reverse mortgages, on a principal residence with 1 to 4 units. Segments are open-end (HELOC) vs closed-end crossed with first vs subordinate lien. Exclusions and their counts are listed under data quality.
Statistics: percentiles use linear interpolation on loan-level values. Denial rates use originated, approved but not accepted, and denied applications as the denominator. State medians are shown only where at least 30 loans exist in a cell. Benchmark averages are simple means of published values within each calendar year.
Conflicts: the FFIEC counts 4,782 reporting institutions for 2025 and the CFPB's earlier Modified LAR notice says about 4,768 filers; the two products have different dates and we cite each as published. The 2024 comparison uses the One-Year 2024 dataset that the Data Browser now serves, which can differ slightly from the 2024 Snapshot.
Derived metrics, formulas and input rows are in derived_metrics.csv; scripts in scripts/ rebuild every number from the raw downloads.
Last updated 2026-10-27. Not financial or tax advice; no lender is ranked or recommended.
This report presents published data with its limitations. It is not legal, financial or investment advice.
Sources, ranked by quality
Tier 1: primary and official sources (23)
- [1] FFIEC / Consumer Financial Protection Bureau. HMDA 2025 Snapshot National Loan-Level Dataset, loan_purpose = 2 (Data Browser CSV). 2025. Accessed 2026-10-27.
- [2] FFIEC / Consumer Financial Protection Bureau. HMDA Data Browser aggregations, loan_purpose = 2, by action taken, 2018 to 2025. 2018 to 2025. Accessed 2026-10-27.
- [3] FFIEC / Consumer Financial Protection Bureau. HMDA 2024 One-Year National Loan-Level Dataset, loan_purpose = 2 (Data Browser CSV). 2024. Accessed 2026-10-27.
- [4] FFIEC / Consumer Financial Protection Bureau. HMDA 2025 Snapshot, cash-out refinance originations, loan_purpose = 32 (Data Browser CSV). 2025. Accessed 2026-10-27.
- [5] Federal Financial Institutions Examination Council. FFIEC Publishes 2025 Data on Mortgage Lending (announcement, June 23, 2026; Internet Archive capture of 2026-10-11 because ffiec.gov blocked automated access). 2025. Accessed 2026-10-27.
- [6] Consumer Financial Protection Bureau. 2025 HMDA Data on Mortgage Lending Now Available (newsroom, March 31, 2026). 2025. Accessed 2026-10-27.
- [7] FFIEC / Consumer Financial Protection Bureau. Public HMDA LAR data fields. 2018 onward. Accessed 2026-10-27.
- [8] Consumer Financial Protection Bureau. Regulation C, 12 CFR 1003.4 Compilation of reportable data, with official interpretations. current. Accessed 2026-10-27.
- [9] Consumer Financial Protection Bureau. Regulation C, 12 CFR 1003.3 Exempt institutions and partially exempt transactions. current. Accessed 2026-10-27.
- [10] Board of Governors of the Federal Reserve System. G.19 Consumer Credit, release of October 7, 2026 (Terms of Credit). 2021 to August 2026. Accessed 2026-10-27.
- [11] Federal Reserve Bank of St. Louis (FRED), from Federal Reserve G.19. Finance Rate on Personal Loans at Commercial Banks, 24 Month Loan (TERMCBPER24NS). quarterly to August 2026. Accessed 2026-10-27.
- [12] Board of Governors of the Federal Reserve System. H.15 Selected Interest Rates, release of October 26, 2026. October 19 to 23, 2026. Accessed 2026-10-27.
- [13] Federal Reserve Bank of St. Louis (FRED), from Federal Reserve H.15. Bank Prime Loan Rate, daily (DPRIME). 2024 to October 2026. Accessed 2026-10-27.
- [14] Board of Governors of the Federal Reserve System. FOMC statement, September 16, 2026. 2026. Accessed 2026-10-27.
- [15] Board of Governors of the Federal Reserve System. FOMC statement, July 29, 2026. 2026. Accessed 2026-10-27.
- [16] Board of Governors of the Federal Reserve System. FOMC statement, January 28, 2026. 2026. Accessed 2026-10-27.
- [17] Federal Reserve Bank of St. Louis (FRED). Federal Funds Target Range, Upper Limit (DFEDTARU). to October 27, 2026. Accessed 2026-10-27.
- [18] Freddie Mac. Primary Mortgage Market Survey, weekly averages as of October 22, 2026. week of October 22, 2026. Accessed 2026-10-27.
- [19] Federal Reserve Bank of St. Louis (FRED), from Freddie Mac PMMS. 30-Year Fixed Rate Mortgage Average in the United States (MORTGAGE30US). 2024 to October 2026. Accessed 2026-10-27.
- [20] Internal Revenue Service. Publication 936 (2025), Home Mortgage Interest Deduction. tax year 2025. Accessed 2026-10-27.
- [25] Board of Governors of the Federal Reserve System. FOMC statement, March 18, 2026. 2026. Accessed 2026-10-27.
- [26] Board of Governors of the Federal Reserve System. FOMC statement, April 29, 2026. 2026. Accessed 2026-10-27.
- [27] Board of Governors of the Federal Reserve System. FOMC statement, June 17, 2026. 2026. Accessed 2026-10-27.
Tier 2: trade bodies, market research, company data (3)
- [21] National Association of Home Builders. 2024 Home Improvement Loan Applications: A State and County Level Analysis (Eye on Housing, March 2, 2026). 2024. Accessed 2026-10-27.
- [22] Wells Fargo. Home Improvement Loans (personal loan product page). undated, accessed 2026-10-27. Accessed 2026-10-27.
- [23] Robins Financial Credit Union. Home Improvement Loans rate page (Internet Archive capture of 2024-10-14; live page blocked automated access). October 2024. Accessed 2026-10-27.
Tier 3: journalism and expert commentary (1)
- [24] RenoFi. Home Improvement Loan Rates guide (Internet Archive capture of 2024-06-22; live page blocked automated access). June 2024. Accessed 2026-10-27.