HELOC rates jump to near 2025 highs; home equity loans tick up too

Home equity rates are on an upward course again. In the most recent week, the average rate on a $30,000 home equity line of credit (HELOC) rose 13 basis points to 8.27 percent, close to the highest level we’ve seen since the beginning of the year, according to Bankrate’s national survey of lenders. Meanwhile, home equity loans ticked up too, but much more modestly — just one basis point. That puts the the average rate on the $30,000 home equity loan at 8.25 percent, still considerably lower than at the start of 2025.

Now that rates seem to be rising, are HELOCs still a good option for homeowners? “Whether now is a good time to consider taking out a HELOC all depends on a customer’s tolerance for rate fluctuations and [their] immediate cash need,” says Erik Schmitt, digital channel executive at Chase Home Lending. “Most HELOCs have variable interest rates, meaning that as rates fluctuate, so do the monthly payments. If a borrower is prepared to manage higher payments as influenced by the rate environment, a HELOC may still be a good option for them to take advantage of the equity they have built up.”

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.

While they’ve ticked up lately, HELOCs and home equity loans have fallen substantially from the highs they hit at the beginning of 2024, with HELOC rates in particular reaching lows not seen since 2023. Bankrate Chief Financial Analyst Greg McBride forecasts that rates will continue to decline in 2025 — especially those on HELOCs, potentially to their lowest level in three years.

Learn more: How the Federal Reserve affects HELOCs and home equity loans

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.

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 good rate from a lender, home equity products are still relatively high-cost debt, notes Ted Rossman, senior industry analyst at Bankrate.

“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.

  U.S. mortgage-holders collectively possessed $11.5 trillion worth of tappable home equity in the second quarter of 2025, according to the latest ICE Mortgage Monitor.

  56% of people who plan to take out a home equity loan will do so for home improvements, down from 73% in 2023, according to a survey by ServiceLink.

  Balances on HELOCs increased by $6 billion in the first quarter of 2025, the 12th straight quarterly increase, according to the latest data from the Federal Reserve Bank of New York.

• 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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