HELOCs soar back above 8%

A big jump in HELOCs this week: The average rate on a $30,000 home equity line of credit rose 15 basis points to 8.14 percent, according to Bankrate’s national survey of lenders (affected by increases among Midwestern institutions in particular). Meanwhile, home equity loan rates stayed virtually flat for the fourth straight week, with the average $30,000 home equity loan clocking in at 8.36 percent, holding at a low for 2025.

Despite the recent HELOC rise, now is a good time for homeowners to tap into their equity, says Rich Martin, director of real estate lending solutions at Curinos, a data analytics firm based in New York. Credit card debt rising, home values climbing and most primary mortgage-holders sitting on rates at less than 5 percent: “All support home equity products as a sound product for homeowners to leverage for their financing needs.”

What’s driving home equity rates today?

Rates on HELOCs and home equity loans have been driven by two primary factors: lender competition for the lowest-for-a-limited-time terms and the Federal Reserve’s actions. The Fed especially impacts the cost of variable-rate products, including HELOCs.

HELOCs and home equity loans have fallen substantially from the highs they hit at the beginning of 2024, with HELOC rates in particular hitting lows not seen since 2023. Bankrate Chief Financial Analyst Greg McBride forecasts that rates will continue to decline in 2025 — especially those on HELOCs, potentially to their lowest level in three years.

Learn more: How the Federal Reserve affects HELOCs and home equity loans

Current home equity rates vs. rates on other types of credit

Because HELOCs and home equity loans use your home as collateral, their rates tend to be much less expensive — more akin to current mortgage rates — than the interest charged on credit cards or personal loans, which aren’t secured.

Of course, the individualized offer you receive on a particular HELOC or new home equity loan reflects additional factors like your creditworthiness. Then there’s the value of your home and your ownership stake. Lenders generally limit all your home-based loans (including your mortgage) to a maximum 80 to 85 percent of your home’s worth.

Even if you are able to secure a low rate from a lender, as Ted Rossman, senior industry analyst at Bankrate, notes, home equity products are still relatively high-cost debt.

“Three years ago, the average HELOC rate was below 4 percent,” Rossman says. “I just wouldn’t be in a rush to borrow $50,000 for a home renovation at 8 percent if there’s a chance you might regret it, like if you lose your job, if you could have held off, if tariffs aren’t as bad as feared, etc.”

• Home equity trends

  Real estate is the second-most popular long-term investment, according to Bankrate’s 2025 Long-Term Investment Survey.

  Balances on HELOCs increased by $6 billion in the first quarter of 2025, the twelfth straight quarterly increase, according to latest data from the Federal Reserve Bank of New York.

  More than half of the homeowners (54%) who remodeled their properties in 2024 used a home equity loan or line of credit to finance the project, according to a 2025 report by the National Association of Realtors.

  More than half of baby boomers have $100,000 or more in home equity, the biggest stake among all generations, according to a 2025 report by ServiceLink.

   

   

   

• Methodology

  The Bankrate.com national survey of large lenders is conducted weekly. To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. In the Bankrate.com national survey, our Market Analysis team gathers rates and/or yields on banking deposits, loans and mortgages. We’ve conducted this survey in the same manner for more than 30 years, and because it’s consistently done the way it is, it gives an accurate national apples-to-apples comparison.