National average HELOC rates are approaching 7.5%, according to analytics firm Curinos. With the best home equity line of credit rates yet in 2025, now may be a good time to get a HELOC.
According to Curinos data, the weekly average HELOC rate is 7.64%, a drop of more than 40 basis points since the beginning of the year. This rate is based on applicants with a minimum credit score of 780 and a maximum combined loan-to-value (CLTV) ratio of less than 70%.
Homeowners have a substantial amount of equity tied up in their homes: more than $34 trillion by the end of 2024, according to the Federal Reserve. That’s the third-largest amount of home equity on record.
With mortgage rates remaining in the low 6% range, homeowners are not likely to abandon their primary mortgage anytime soon, so selling the home may not be an option. Why lose your 5%, 4% or even 3% mortgage?
Accessing some of the value locked up in your home with a HELOC to use as needed can be a great alternative.
HELOC interest rates are different from primary mortgage rates. Second mortgage rates are based on an index rate plus a margin. That index is usually the preferential interest rate, which today has dropped to 7.00%. If a lender added 1% as margin, the HELOC would have a rate of 8.00%.
Lenders have flexibility with the pricing of a second mortgage product, like a HELOC or home equity loan, so it’s worth shopping around. 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.
Most importantly, HELOC rates may include below-market “introductory” rates 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’re paying off your primary mortgage with low interest rates like the wealth-building machine you are.
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. 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 lies in taking advantage of only what you need, leaving 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 almost 6% to as high as 18%. It really depends on your creditworthiness and your diligence as a buyer.
For homeowners with low primary mortgage rates and a lot of equity in their home, it’s probably a good idea to get a HELOC early. 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 withdraw the entire $50,000 from a home equity line of credit and pay an interest rate of 7.50%, your monthly payment over the 10-year withdrawal 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.