Home equity loans are offered against the value of your home. This is the value of your house in the fair market. If you already have an existing debt or mortgage that is to be subtracted out of the value of the home in fair market to reach to the amount that can be offered as loan by lender. When you use the home as collateral to obtain loan you make the loan secured as you may lose the home if you would not repay it. So the lender has a assurance that the money that he has offered you would be returned back.
The money offered by lenders is to obtain interest on the same. The interest is the amount that you pay to use the money to a lender once you borrow a sum. The lenders offer interest rates like fixed or adjustable. People go into home equity loans to meet different financial needs. It could be debt consolidation, medical bills, investment, auto loan or anything else. A lot of money is saved on the home equity loans as the interest that you pay is tax deductible. Also the interest rate that you pay on the home equity loan is always lower as compared to a credit card.
 Fixed rates are for a longer duration home equity loans. The borrower will have a definite monthly payment to pay and there is no surprise in the future thus a peace of mind is offered in the fixed rate of interest. The risk involved for the lender is high as the interest rates are decided according to the index. It is a based on prime which is variable. So if the interest rate in the market increases, you still have to pay the same and it is the lender who will have to face the music. That is why the fixed rate of interest is always higher as compared to the adjustable rate.
 Adjustable rate of interest are market dependent. As and when the market rates fluctuate the rate of interest on the home equity loan would also behave in the same manner. So when the interest rate dips down you have to pay less there by save a lot of money. There is another key to ensure interest rate is low. If you borrow less than the value of the equity put as collateral you will be offered less interest rate.
Your credit ratings and credit history is looked at by the lenders which decide the rate of interest to be offered to you. So it is always advised to keep you credit scores well. A good credit history would ensure lower interest rate. Your current outstanding debt, your credits in the past, how many times did you apply for the credit, if there was any late payments, if there was any bankruptcy etc are some of those factors which a lender would look into before deciding the interest rate to be offered to you.