HELOC Rates Tick Up As Fed Holds Off

Image by GettyImages; Illustration by Bankrate

The rates on home equity lines of credit and loans didn’t move much this week, with the average rate on a $30,000 home equity line of credit (HELOC) ticking up to 7.99 percent, according to Bankrate’s national survey of lenders. Meanwhile, home equity loan rates stabilized, with the average $30,000 home equity loan at 8.36 percent — unchanged at a low for 2025.

The Federal Reserve left its key benchmark interest rate unchanged this week, even as a recent inflation measure, the Personal Consumption Expenditures (PCE) index, came in closer to the central bank’s 2 percent target. The Fed’s continued pause reflects uncertainty around tariffs and the overall state of the economy, which contracted in the first quarter of 2025.

HELOCs and home equity loans have fallen substantially from the highs reached 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.

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.

However, because HELOCs and home equity loans are linked to your home as collateral, those 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.

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

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.

Some borrowers might be more conservative in tapping their equity, since what’s paramount is “paying off the loan as fast as they can,” says Fred Bolstad, head of retail lending at U.S. Bank. “For other people, it’s all about [increasing] cash flow, and so they want to leverage their home to the fullest.”

However, home equity products are still relatively high-cost debt, says Ted Rossman, senior industry analyst at Bankrate.

“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.”

• 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.