The current national average HELOC rate is dropping to new lows in 2025, according to data from Curinos. This decrease in home equity line of credit rates is a result of the recent cut in the prime rate following the Federal Reserve’s decision on December 10.
Based on Curinos data, the average weekly HELOC rate stands at 7.44%. This rate applies to applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio (CLTV) of 70%. Homeowners in the United States have a significant amount of equity tied up in their homes, totaling nearly $36 trillion as of the end of the second quarter of 2025, according to the Federal Reserve.
With mortgage rates hovering around 6%, many homeowners may be hesitant to give up their current low-rate mortgages by selling their homes. In such cases, accessing the equity in their homes through a HELOC can be a viable alternative. HELOC interest rates differ from primary mortgage rates, typically being based on an index rate plus a margin. The index rate is often the prime rate, which has recently fallen to 6.75%.
Lenders have the flexibility to price second mortgage products like HELOCs or home equity loans differently, so it’s advisable to shop around for the best rates. Factors such as credit score, existing debt, and the credit line amount compared to the home’s value will influence the rate offered. It’s important to note that average national HELOC rates may include introductory rates that could increase significantly after the initial period.
One of the advantages of a HELOC is the ability to tap into your home equity as needed while keeping your primary mortgage intact. The best HELOC lenders will offer low fees, a fixed-rate option, and generous credit lines, allowing homeowners to use their equity for various purposes. By leveraging a HELOC, individuals can continue paying down their primary mortgage while accessing funds for other needs.
Currently, FourLeaf Credit Union is offering a competitive HELOC rate of 5.99% for 12 months on credit lines up to $500,000. When considering different lenders, it’s essential to compare rates, fees, repayment terms, and minimum draw amounts. The draw amount refers to the initial sum a lender requires you to borrow from your equity.
HELOCs provide the flexibility to borrow only what is needed and keep the remaining credit line available for future use. Interest is only charged on the borrowed amount, making it a cost-effective financing option. Rates can vary significantly among lenders, ranging from around 6% to as high as 18%, depending on creditworthiness and market conditions.
For homeowners with low primary mortgage rates and substantial home equity, now may be an opportune time to consider a HELOC. By utilizing the equity for home improvements, repairs, or other investments, individuals can benefit from the current low rates without sacrificing their existing mortgage terms. However, it’s crucial to use a HELOC responsibly and ensure timely repayment to avoid long-term debt burdens.
In conclusion, a HELOC can be a valuable financial tool for homeowners looking to access their home equity while maintaining their low-rate mortgages. By understanding the terms, rates, and repayment options offered by different lenders, individuals can make informed decisions to leverage their home’s value effectively.
