Home equity loans rates reach record low since May, as HELOC rates also persist at steady levels.
Home Equity Loans and HELOC Rates Remain Steady Amid Economic Fluctuations
In the latest edition of our website.com's national survey, conducted weekly for over 30 years, more than 47% of mortgaged residential properties were considered equity-rich in Q2 2025. This survey gathers rates and yields on banking deposits, loans, and mortgages, providing an accurate national apples-to-apples comparison.
The average rate on a $30,000 home equity loan remains unchanged for the fourth week in a row at 8.25%, while the average rate on a $30,000 HELOC has decreased by 13 basis points to 8.13%.
Sarah Rose, senior home equity manager at Affinity Federal Credit Union, suggests considering a HELOC or home equity loan due to teaser offers on credit lines that can save consumers hundreds in interest. However, the individual offer you receive on a particular HELOC or home equity loan depends on factors like your creditworthiness, financials, the value of your home, and the size of your ownership stake. Lenders generally limit all your home loans (including your mortgage) to a maximum of 80 to 85% of your home's worth.
Home equity borrower usage for home renovations represents 46% of loan volume, while debt consolidation accounts for 39%. HELOCs and home equity loans use your home as collateral, making their rates less expensive than the interest charged on credit cards or personal loans, which currently stand at an average of 20.13% for credit cards and 12.58% for personal loans.
The factors influencing home equity loan and HELOC rates today primarily include the Federal Reserve’s monetary policy, lender competition, creditworthiness of borrowers, and current home values. The Fed's actions, particularly impacting the cost of variable-rate products like HELOCs, have a major role. Lender competition for new customers and the Federal Reserve's actions are the primary drivers of current HELOC and home equity loan rates.
Looking ahead, Greg McBride, our website's Chief Financial Analyst, predicts that home equity rates will decline in 2025, with HELOCs averaging 7.25% and home equity loans coming in at 7.90%. As home values and market conditions stabilise, borrowers may find more opportunities to tap into their home equity at lower rates.
In Q2 2025, HELOC balances increased by $9 billion to $411 billion. As homeowners continue to leverage their equity for various purposes, understanding the current market conditions and available rates is crucial. Our weekly national survey offers valuable insights into these trends, helping homeowners make informed decisions about their financial future.
Investors in the realm of personal-finance might find interest in the steady home equity loan rates, with the average rate on a $30,000 home equity loan remaining at 8.25%. Meanwhile, the average rate on a $30,000 HELOC has seen a decrease to 8.13%, making it an attractive option for those considering investing in home renovations or debt consolidation. When considering a HELOC or home equity loan, factors like creditworthiness, home value, and ownership stake will influence the individual offer received.
