{"id":2140,"date":"2025-08-06T23:53:07","date_gmt":"2025-08-06T23:53:07","guid":{"rendered":"https:\/\/ft365.org\/index.php\/2025\/08\/06\/heloc-rates-plunge-to-lowest-level-since-may-bankrate\/"},"modified":"2025-08-06T23:53:07","modified_gmt":"2025-08-06T23:53:07","slug":"heloc-rates-plunge-to-lowest-level-since-may-bankrate","status":"publish","type":"post","link":"http:\/\/ft365.org\/index.php\/2025\/08\/06\/heloc-rates-plunge-to-lowest-level-since-may-bankrate\/","title":{"rendered":"HELOC Rates Plunge To Lowest Level Since May | Bankrate"},"content":{"rendered":"
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Something we haven\u2019t seen in months: a drop for HELOC rates \u2014 and a big one to boot. The average rate on a $30,000 home equity line of credit (HELOC) fell 13 basis points to 8.13 percent, according to Bankrate\u2019s national survey of lenders. Meanwhile, the average rate on a $30,000 home equity loan was unchanged for the third week in a row, holding at 8.25 percent.<\/p>\n

Sarah Rose, senior home equity manager at Affinity Federal Credit Union, says now is a good time to tap into your home equity with a HELOC or home equity loan; homeowners should be on the lookout for teaser offers on the credit lines in particular. \u201cThere are a lot of companies offering introductory rate offers that can save consumers hundreds in interest,\u201d she says. \u201cConsolidating high-interest credit cards and loan debt into a low-rate home equity loan or HELOC is proving to be beneficial for a lot of borrowers right now.\u201d<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n
\u00a0<\/th>\nCurrent<\/th>\n4 weeks ago<\/th>\nOne year ago<\/th>\n52-week average<\/th>\n52-week low<\/th>\n<\/tr>\n<\/thead>\n
HELOC<\/td>\n8.13%<\/td>\n8.27%<\/td>\n9.37%<\/td>\n8.46%<\/td>\n7.90%<\/td>\n<\/tr>\n
5-year home equity loan <\/td>\n8.25%<\/td>\n8.26%<\/td>\n8.59%<\/td>\n8.38%<\/td>\n8.23%<\/td>\n<\/tr>\n
10-year home equity loan<\/td>\n8.41%<\/td>\n8.42%<\/td>\n8.72%<\/td>\n8.51%<\/td>\n8.38%<\/td>\n<\/tr>\n
15-year home equity loan<\/td>\n8.28%<\/td>\n8.35%<\/td>\n8.69%<\/td>\n8.44%<\/td>\n8.28%<\/td>\n<\/tr>\n<\/tbody>\n
Note: The home equity rates in this survey assume a line or loan amount of $30,000.<\/em><\/td>\n<\/tr>\n<\/tfoot>\n<\/table>\n<\/div>\n

What\u2019s driving home equity rates today?<\/h2>\n

Rates on HELOCs and home equity loans are being driven primarily by two factors: lender competition for new customers and the Federal Reserve\u2019s actions. The Fed especially impacts the cost of variable-rate products like HELOCs.<\/p>\n

Both HELOC and home equity loan rates have declined substantially from highs in 2024, although HELOC rates have rebounded somewhat from lows they hit earlier this year. Still, Bankrate Chief Financial Analyst Greg\u00a0McBride is holding to his forecast <\/mark>that home equity rates will decline in 2025, with HELOCs averaging 7.25 percent and home equity loans coming in at 7.90 percent.<\/p>\n

\u201cBoth are still well within the realm of possibility if the Fed resumes cutting interest rates in the second half of the year,\u201d McBride says.<\/p>\n

Current home equity rates vs. rates on other types of credit<\/strong> <\/h3>\n

Because HELOCs and home equity loans use your home as collateral, their rates tend to be much less expensive \u2014 more akin to current mortgage rates \u2014 than the interest charged on credit cards or personal loans, which aren\u2019t secured.<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n
\u00a0Credit type<\/th>\nAverage rate<\/th>\n<\/tr>\n<\/thead>\n
HELOC<\/td>\n8.13%<\/td>\n<\/tr>\n
Home equity loan<\/td>\n8.25%<\/td>\n<\/tr>\n
Credit card<\/td>\n20.13%<\/td>\n<\/tr>\n
Personal loan<\/td>\n12.58%<\/td>\n<\/tr>\n<\/tbody>\n
Source: Bankrate national survey of lenders, Aug 6<\/em>
<\/mark> <\/td>\n<\/tr>\n<\/tfoot>\n<\/table>\n<\/div>\n

The individual offer you receive on a particular HELOC or new home equity loan reflects additional factors like your creditworthiness and financials. Then there\u2019s the value of your home and the size of your ownership stake. Lenders generally limit all your home loans (including your mortgage) to a maximum 80 to 85 percent of your home\u2019s worth.<\/p>\n

Keep in mind: Even if you\u2019re able to secure a favorable rate from a lender, home equity products are still relatively high-cost debt. \u201cMany homeowners are sitting on a mountain of home equity, but borrowing against it is still costly, with the average rate still over 8 percent and many lenders charging double-digit interest rates,\u201d McBride says. \u201cThis is not the low-cost form of borrowing that homeowners had become accustomed to for many years. So if you must borrow, have a game plan for paying it back.\u201d<\/p>\n