HELOC, Home Equity Loan Rates Flat This Week

Image by GettyImages; Illustration by Bankrate

HELOC and home equity loan rates were largely unchanged this week, reflecting the Federal Reserve’s continued pause. The average rate on a $30,000 home equity line of credit (HELOC) held steady at 8.26 percent, according to Bankrate’s national survey of lenders. Meanwhile, the average rate on a $30,000 home equity loan didn’t budge, staying at 8.25 percent.

Despite pressure from President Trump to lower rates, the Fed left its key interest rate unchanged for the fifth meeting in a row in July. The central bank’s moves influence HELOC and new home equity loan rates, both of which have seen minimal change since June.

“With the Fed still holding benchmark interest rates steady, there isn’t a catalyst for a meaningful decline in home equity rates,” says Bankrate Chief Financial Analyst Greg McBride, CFA. “Variable-rate HELOCs will stair-step lower in response to Fed rate cuts, whenever that happens.”

What’s driving home equity rates today?

Rates on HELOCs and home equity loans are being driven primarily by two factors: lender competition for new customers and the Federal Reserve’s actions. The Fed especially impacts the cost of variable-rate products like HELOCs.

Both HELOC and home equity loan rates have declined substantially from highs in 2024, although HELOC rates have moved away from lows they hit this year. McBride is holding to his earlier forecast that home equity rates will decline in 2025, with HELOCs averaging 7.25 percent and home equity loans coming in at 7.90 percent.

“Both are still well within the realm of possibility if the Fed resumes cutting interest rates in the second half of the year,” McBride says.”

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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.

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

Keep in mind: Even if you’re able to secure a favorable rate from a lender, home equity products are still relatively high-cost debt.

“Many homeowners are sitting on a mountain of home equity, but borrowing against it is still costly, with the average rate still over 8 percent and many lenders charging double-digit interest rates,” McBride says. “This is not the low-cost form of borrowing that homeowners had become accustomed to for many years.

“Today’s rates are nothing to get excited about,” McBride says. “So if you must borrow, have a game plan for paying it back.”

• 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.