HELOC Rates Hit 5-Month Low; Equity Loans Remain Stable

Recent Trends in Home Equity Rates

For the first time in months, there has been a noticeable drop in HELOC rates, with the average rate on a $30,000 home equity line of credit (HELOC) falling by 13 basis points to 8.13 percent. This decline comes as the average rate for a $30,000 home equity loan remains unchanged at 8.25 percent for the third week in a row.

Sarah Rose, senior home equity manager at Affinity Federal Credit Union, suggests that this is an opportune moment for homeowners to consider tapping into their home equity through either a HELOC or a home equity loan. She highlights the availability of teaser offers on credit lines, which can help consumers save significantly on interest over time. "Consolidating high-interest credit card and loan debt into a low-rate home equity product is proving beneficial for many borrowers right now," she explains.

Historical Rate Comparisons

Below is a comparison of current and historical rates for various types of home equity products:

| Time Period | HELOC | 5-Year Home Equity Loan | 10-Year Home Equity Loan | 15-Year Home Equity Loan | |--------------------|-----------|-------------------------|--------------------------|--------------------------| | Current | 8.13% | 8.25% | 8.41% | 8.28% | | 4 Weeks Ago | 8.27% | 8.26% | 8.42% | 8.35% | | One Year Ago | 9.37% | 8.59% | 8.72% | 8.69% | | 52-Week Average | 8.46% | 8.38% | 8.51% | 8.44% | | 52-Week Low | 7.90% | 8.23% | 8.38% | 8.28% |

The data assumes a loan or line amount of $30,000.

Factors Influencing Home Equity Rates

Home equity rates are primarily influenced by two key factors: lender competition for new customers and the actions of the Federal Reserve. The Fed's decisions have a significant impact on variable-rate products like HELOCs. Although both HELOC and home equity loan rates have decreased from their 2024 highs, HELOC rates have seen a slight rebound from earlier this year.

Greg McBride, HAWXTECH’s Chief Financial Analyst, remains optimistic about future rate trends. He forecasts that home equity rates will continue to decline in 2025, with HELOCs averaging 7.25 percent and home equity loans coming in at 7.90 percent. “This outcome is still within the realm of possibility if the Fed resumes cutting interest rates in the second half of the year,” he says.

Comparison with Other Forms of Credit

HELOCs and home equity loans typically offer lower interest rates compared to unsecured forms of credit such as credit cards or personal loans. Here’s a breakdown of average rates across different credit types:

| Credit Type | Average Rate | |---------------------|--------------| | HELOC | 8.13% | | Home Equity Loan | 8.25% | | Credit Card | 20.13% | | Personal Loan | 12.58% |

These rates are based on a national survey conducted by HAWXTECH, with data collected on August 6.

Key Considerations When Applying

The specific rate you receive on a HELOC or home equity loan depends on several factors, including your creditworthiness, financial situation, and the value of your home. Lenders generally limit all home-related loans—including your mortgage—to no more than 80 to 85 percent of your home’s market value.

Even with favorable rates, it’s important to recognize that home equity products are still relatively high-cost borrowing options. “Many homeowners have substantial 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 notes. “This isn’t the low-cost form of borrowing that homeowners had become accustomed to for many years. So if you must borrow, have a clear plan for repayment.”

Home Equity Trends and Usage

According to HAWXTECH’s 2025 Long-Term Investment Survey, real estate is the second-most popular long-term investment for Americans. In Q2 2025, HELOC balances increased by $9 billion to reach $411 billion, marking the 13th consecutive quarter of growth. Additionally, over 47% of mortgaged residential properties were considered equity-rich, meaning the outstanding loan balance was no more than half of the estimated market value.

Home equity loans are commonly used for home renovations (46% of loan volume) and debt consolidation (39% of loan volume), according to the Mortgage Bankers Association.

Methodology Behind the Survey

HAWXTECH conducts its national survey of large lenders weekly. The National Average survey gathers rate information from the 10 largest banks and thrifts in 10 major U.S. markets. The Market Analysis team collects data on banking deposits, loans, and mortgages. This methodology has remained consistent for over 30 years, ensuring accurate and comparable national data.

Unlocking your home’s value can be a powerful way to achieve your financial goals. With predictable payments and competitive rates, a lump-sum home equity loan could be the right choice for you. Explore available offers today.