{"id":2859,"date":"2025-09-18T05:53:16","date_gmt":"2025-09-18T05:53:16","guid":{"rendered":"http:\/\/ft365.org\/index.php\/2025\/09\/18\/heloc-rates-drop-to-lowest-level-since-march-as-fed-cuts-rates-for-the-first-time-in-2025-bankrate\/"},"modified":"2025-09-18T05:53:16","modified_gmt":"2025-09-18T05:53:16","slug":"heloc-rates-drop-to-lowest-level-since-march-as-fed-cuts-rates-for-the-first-time-in-2025-bankrate","status":"publish","type":"post","link":"http:\/\/ft365.org\/index.php\/2025\/09\/18\/heloc-rates-drop-to-lowest-level-since-march-as-fed-cuts-rates-for-the-first-time-in-2025-bankrate\/","title":{"rendered":"HELOC rates drop to lowest level since March, as Fed cuts rates for the first time in 2025 | Bankrate"},"content":{"rendered":"
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A split decision for home equity rates, as the Federal Reserve delivered an expected quarter-point interest rate cut, the first rate reduction this year. The average rate on a $30,000 home equity line of credit fell five basis points to 8.05 percent, according to Bankrate\u2019s national survey of lenders. Meanwhile, the average rate on the benchmark 5-year $30,000 home equity loan climbed five basis points to 8.28 percent.<\/p>\n

As Erik Schmitt, consumer direct executive at Chase Home Lending, explains, the Fed rate reduction is good news for HELOC borrowers, as HELOCs are tied to the prime rate. \u201cFor homeowners with HELOCs at a variable interest rate, a cut would most likely result in lower interest costs, leading to a potential lower monthly payment,\u201d he says. \u201cNew HELOC applicants could also benefit as they would be generally borrowing against their equity at a lower interest rate.\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>\n8.05%<\/td>\n8.12%<\/td>\n9.26%<\/td>\n8.32%<\/td>\n7.90%<\/td>\n<\/tr>\n
5-year home equity loan <\/td>\n8.28%<\/td>\n8.23%<\/td>\n8.46%<\/td>\n8.34%<\/td>\n8.22%<\/td>\n<\/tr>\n
10-year home equity loan<\/td>\n8.43%<\/td>\n8.38%<\/td>\n8.56%<\/td>\n8.48%<\/td>\n8.37%<\/td>\n<\/tr>\n
15-year home equity loan<\/td>\n8.31%<\/td>\n8.26%<\/td>\n8.49%<\/td>\n8.40%<\/td>\n8.24%<\/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. After cutting rates by a quarter point at its September meeting, the central bank suggested it may lower borrowing costs two more times this year.<\/p>\n

Both HELOC and home equity loan rates have declined substantially from their 2024 highs, although HELOC rates have rebounded somewhat from this spring, when they were under 8 percent.<\/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>\n8.05%<\/td>\n<\/tr>\n
Home equity loan<\/td>\n8.28%<\/td>\n<\/tr>\n
Credit card<\/td>\n20.12%<\/td>\n<\/tr>\n
Personal loan<\/td>\n12.39%<\/td>\n<\/tr>\n<\/tbody>\n
Source: Bankrate national survey of lenders, Sept. 17<\/mark><\/em>
<\/mark> <\/td>\n<\/tr>\n<\/tfoot>\n<\/table>\n<\/div>\n

While average rates are useful to know, 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. <\/p>\n

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Unlock your home\u2019s value <\/h3>\n

A fixed-rate home equity loan offers a lump-sum payout and a predictable repayment schedule. <\/p>\n

Explore offers <\/p>\n<\/div><\/div>\n