The national average rate on a home equity line of credit has fallen with each of the Federal Reserve’s three quarter-point rate cuts this year, and is increasingly closer to 7%.
According to data from Curinos, the average weekly HELOC rate is 7.44%. This rate is based on applicants with a minimum credit score of 780 and a maximum combined loan-to-value (CLTV) ratio of 70%.
Homeowners have a staggering amount of equity tied up in their homes: nearly $36 trillion at the end of the second quarter of 2025, according to the Federal Reserve. That is the largest amount of home equity recorded.
With mortgage rates remaining in the low 6% range, homeowners are unlikely to walk away from their primary mortgage anytime soon, so selling a home may not be an option. Why give up your 5%, 4% or even 3% mortgage?
Accessing some of that value with a HELOC that you can use when you need it can be a great alternative.
HELOC interest rates are calculated differently than mortgage rates. Second mortgage rates are based on an index rate plus a margin. That rate is usually the prime rate, which is 6.75% following the Federal Reserve’s last rate cut on December 10. If a lender added 0.75% as margin, the HELOC would have a variable rate of 7.50%.
Lenders have flexibility with the pricing of a second mortgage product, such as a HELOC or home equity loan. Your rate will depend on your credit score, the amount of debt you have, and the size of your line of credit compared to the value of your home. Shop between two or three lenders to find the best interest rate deal.
National HELOC rates may include “introductory” offers that may last only six months or a year. After that, your interest rate will be adjustable, probably starting with a substantially higher rate.
You don’t have to give up your low-rate mortgage to access the equity in your home. Maintain your primary mortgage and consider a second mortgage, such as a home equity line of credit.
The best HELOC lenders offer low fees, a fixed-rate option, and generous lines of credit. A HELOC allows you to easily use your home equity in any way and in any amount you choose, up to the limit of your line of credit. Take out a little; return it. Repeat.
Meanwhile, you are paying off your primary mortgage with low interest rates.
Today, FourLeaf Credit Union is offering a 5.99% HELOC APR for 12 months on lines up to $500,000. This is an introductory rate that will convert to a variable rate at a later date. t
As the offering demonstrates, lenders will not only lower their adjustable rates, but also their introductory rates, following the Federal Reserve’s lower rate policy.
When shopping for lenders, keep both rates in mind. And as always, compare the fees, payment terms and minimum withdrawal amount. The withdrawal is the amount of money a lender requires you to initially withdraw from your equity.
The power of a HELOC is to take advantage of only what you need and leave part of your line of credit available for future needs. You don’t pay interest so you don’t borrow.
Rates vary significantly from lender to lender. You may see rates from 6% to 18%. It really depends on your creditworthiness and your diligence as a buyer.
For homeowners with low primary mortgage rates and a significant amount of equity in their home, it is likely one of the best times to take out a HELOC. You don’t give up that great mortgage rate and you can use the cash withdrawn from your equity for things like home improvements, repairs and upgrades. Of course, you can also use a HELOC for fun things, like a vacation, if you have the discipline to pay it off quickly. Taking a vacation with long-term debt is probably not worth it.
If you draw down the entire $50,000 on a home line of credit and pay an interest rate of 7.50%, your monthly payment over the 10-year draw period would be approximately $313. That sounds good, but remember that the rate is usually variable, so it changes periodically and your payments will increase over the 20-year repayment period. A HELOC essentially becomes a 30-year loan. HELOCs are better if you borrow and pay off the balance in a much shorter period of time.