HELOC rates have been on a downward trend throughout the year, with the average home equity line of credit interest rate currently standing at 7.75%, according to Curinos. However, this rate does not yet reflect the recent quarter-point drop in the prime rate, which is expected to impact HELOC rates soon.
Data from Curinos shows that the average weekly HELOC rate is currently at its lowest point in 2025, at 7.75%. This rate is based on applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio (CLTV) of 70%.
Homeowners have a substantial amount of equity tied up in their homes, with over $34 trillion in home equity recorded at the end of 2024 by the Federal Reserve. This marks the third-largest amount of home equity on record.
Given that mortgage rates are still hovering above 6%, homeowners are unlikely to let go of their primary mortgages anytime soon. This makes selling a house or opting for a cash-out refinance less appealing. Why give up a low-rate mortgage for a higher HELOC rate?
Accessing some of the value tied up in your home through a HELOC can be a smart alternative. HELOC interest rates differ from primary mortgage rates, as they are based on an index rate plus a margin. Typically, the prime rate serves as the index, which has recently dropped to 7.00%. If a lender adds a 1% margin, the HELOC rate would be 8.00%.
Lenders have the flexibility to set pricing on second mortgage products like HELOCs, so it’s advisable to shop around for the best rates. Your specific rate will depend on factors such as your credit score, outstanding debt, and the amount of your credit line compared to your home’s value.
It’s important to note that average national HELOC rates may include introductory rates that are only valid for a limited time. After the introductory period, the interest rate will become adjustable, likely starting at a higher rate.
By keeping your primary mortgage and considering a HELOC, you can access your home equity without giving up your low-rate mortgage. The best HELOC lenders offer low fees, fixed-rate options, and generous credit lines, allowing you to use your home equity as needed and repay it at your own pace.
LendingTree is currently offering a HELOC APR as low as 6.48% for a credit line of $150,000. However, it’s important to remember that HELOCs typically come with variable interest rates, meaning your rate may fluctuate over time. Be sure to assess whether you can afford potential rate increases.
When comparing HELOC options, consider factors such as fees, repayment terms, and the minimum draw amount required by the lender. The flexibility of a HELOC lies in the ability to borrow only what you need, leaving the rest of your credit line available for future needs without accruing unnecessary interest.
Rates for HELOCs can vary widely between lenders, ranging from below 6% to as high as 18%. Your creditworthiness and diligence as a borrower will play a significant role in determining the rate you qualify for.
For homeowners with low primary mortgage rates and significant equity in their homes, now may be an opportune time to consider a HELOC. By leveraging your home equity for purposes like home improvements or repairs, you can access cash without sacrificing your favorable mortgage rate.
It’s essential to be mindful of repayment terms when utilizing a HELOC. While the initial monthly payment may seem manageable, remember that the interest rate is typically variable, leading to fluctuations in payment amounts over time. To make the most of a HELOC, aim to repay the balance within a shorter timeframe rather than stretching it out over the full repayment period.
