The national average HELOC rate has dipped slightly, reaching a new low in 2025, according to Curinos, an analytics company. The current rate for a home equity line of credit is now below 7.5%, standing at 7.44% on a weekly basis. This marks a decrease from the highest HELOC rate recorded earlier in the year, showing a drop of over half a percentage point. These rates are based on applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio (CLTV) of 70%.
Homeowners possess a substantial amount of equity in their homes, totaling nearly $36 trillion by the end of the second quarter of 2025, as reported by the Federal Reserve. This represents the highest amount of home equity on record. With mortgage rates hovering just above 6%, many homeowners are reluctant to part ways with their primary mortgage, making selling their house an unlikely option. Why give up a mortgage with rates as low as 3% or 4%?
One alternative for accessing the accumulated home equity over the years is through a home equity line of credit (HELOC). HELOC interest rates differ from primary mortgage rates, typically being based on an index rate plus a margin. The index rate is often tied to the prime rate, which has recently fallen to 7.00%. Adding a margin of 0.75% would result in a HELOC rate of 7.75%.
Lenders have the flexibility to price second mortgage products like HELOCs or home equity loans differently, so it’s essential to shop around for the best rates. Your specific rate will depend on factors such as your credit score, existing debt levels, and the proportion of your credit line to your home’s value. Additionally, average national HELOC rates may include introductory rates that are temporary and subject to adjustment after the initial period.
It is possible to access your home’s equity without giving up your low-rate mortgage by considering a second mortgage, such as a HELOC. The best HELOC lenders offer low fees, a fixed-rate option, and generous credit lines, allowing you to utilize your home equity as needed within your credit limit. By leveraging a HELOC, you can continue paying down your primary mortgage with its low interest rate while accessing additional funds when required.
Currently, FourLeaf Credit Union is offering a HELOC APR of 5.99% for the first 12 months on credit lines up to $500,000. However, it’s important to be aware that this rate is introductory and will likely increase later on. When evaluating lenders, it’s crucial to compare rates, fees, repayment terms, and minimum draw amounts. The draw amount refers to the initial sum a lender requires you to withdraw from your equity.
One of the advantages of a HELOC is the ability to borrow only what you need, leaving the remaining credit line available for future use. By borrowing selectively, you avoid paying interest on funds that are not utilized. HELOC rates can vary significantly among different lenders, ranging from around 6% to as high as 18%, depending on your creditworthiness and diligence in shopping for the best deal.
For homeowners with low primary mortgage rates and substantial home equity, now may be an opportune time to consider a HELOC. By retaining your favorable mortgage rate and using the cash from your equity wisely, you can fund home improvements, repairs, upgrades, or even enjoyable activities like vacations, provided you can promptly repay the borrowed amount. It’s crucial to be mindful of the repayment terms, as a fully drawn HELOC balance at a 7.50% interest rate would entail a monthly payment of approximately $313 during the 10-year draw period, with the rate subject to change over the 20-year repayment period.
In conclusion, a HELOC can be a valuable financial tool for homeowners looking to leverage their home equity without sacrificing their existing low-rate mortgage. By exploring the options available from different lenders and understanding the terms and conditions, homeowners can make informed decisions on utilizing their home equity effectively.
