Home equity rates plunge; HELOCs climb for fourth straight week
A split decision for HELOC and home equity loan rates this week. The average rate on a $30,000 home equity line of credit rose six basis points to 8.20 percent, according to Bankrate’s national survey of lenders. Conversely, home equity loan rates recorded their biggest drop of the year, with the average $30,000 home equity loan falling 13 basis points to 8.23 percent.
The last time home equity loan rates were this affordable (and this close to HELOC rates) was back in May 2023. Bankrate Chief Financial Analyst Greg McBride attributes the current drop to “the introduction of new offers, not because of existing lenders changing rates.”
| Current | 4 weeks ago | One year ago | 52-week average | 52-week low | |
|---|---|---|---|---|---|
| HELOC | 8.20% | 7.94% | 9.17% | 8.65% | 7.90% |
| 5-year home equity loan | 8.23% | 8.36% | 8.61% | 8.45% | 8.23% |
| 10-year home equity loan | 8.38% | 8.51% | 8.77% | 8.58% | 8.38% |
| 15-year home equity loan | 8.32% | 8.42% | 8.75% | 8.52% | 8.32% |
| Note: The home equity rates in this survey assume a line or loan amount of $30,000. | |||||
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 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. McBride forecasts that rates will continue to decline in 2025 — especially those on HELOCs, potentially to their lowest level in three years.
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.
| Average rate | |
|---|---|
| HELOC | 8.20% |
| Home equity loan | 8.23% |
| Credit card | 20.12% |
| Personal loan | 12.58% |
| Source: Bankrate national survey of lenders, May 21 |
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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 Americans’ second-most popular long-term investment, according to Bankrate’s 2025 Long-Term Investment Survey.
Nearly 30% of homeowners are considering taking out a HELOC or home equity loan in the next 12 months, a 7% increase compared to 2022, according to a survey by MeridianLink.
Balances on HELOCs increased by $6 billion in the first quarter of 2025, the twelfth straight quarterly increase, according to the 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.
- 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.
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