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After some minor increases earlier in May, interest rates on home equity lines of credit (HELOCs) reversed course and declined again this week, according to new Bankrate data. Now, at an average rate of 8.14%, rates dropped by six basis points, allowing HELOCs to maintain their position as one of the cheapest ways to borrow money right now. They’re less expensive than home equity loans, which remained flat this week at an average rate of 8.24% and materially cheaper than personal loans (over 12% currently) and credit cards (around 21%). And with the average home equity amount around $313,000 right now, there’s likely plenty of money to utilize while still maintaining a healthy equity buffer in the home.
Still, borrowing from your home equity isn’t risk-free, and with a HELOC, which has a variable rate, some volatility should be priced in to avoid surprises. But with rates here low again, many would benefit from using this specific borrowing product. It just helps to know some timely considerations before securing the line of credit. Below, we’ll detail what to consider right now.
Start by seeing how low a HELOC rate you’d be eligible for here.
What to consider with HELOC rates falling again
Here are three items to consider with HELOC rates falling back toward 8% again:
Rates here could rise or fall unexpectedly
Earlier in 2025, it felt like HELOC rates would never stop declining. They hit an 18-month low. Then a two-year low and then another, new two-year low. But that drop stopped in recent weeks and rates here actually rose a bit since. And that’s something that will impact borrowers even after the HELOC is secured, as variable rates will change monthly, perhaps in an unexpected way.
So don’t let a lower rate lull you into a false sense of complacency. Rates here could continue to fall … or they could rise again. Be prepared for either. That said, overall, HELOC rates are down by around two full percentage points since September 2024, so the larger trend is still a positive one for borrowers.
Compare HELOC rates and offers here to see which is most affordable.
Long-term affordability will need to be closely calculated
Do you know how much you want to borrow with a HELOC? Because of these recent rate changes and because you’ll need to make repayments no matter how dramatically the rate changes over time, it’s important to calculate long-term affordability closely.
For example, if you want to borrow with a $50,000 HELOC, don’t just do the math tied to today’s average rates. Calculate repayments against higher rates in the future and, potentially, lower ones as well. This will give you a better idea of long-term affordability, which is critical when your home is the funding source to avoid the risk of foreclosure.
You could refinance into a home equity loan
Want to take advantage of today’s low HELOC rates but are nervous about your ability to make repayments should rates spike again? Then consider the HELOC now, and keep in mind that you could refinance it into a home equity loan (with a fixed interest rate) in the future.
Just be sure to clarify with your HELOC lender before getting started, as eligibility criteria and requirements can vary from lender to lender. And understand that that may require you to forego a lower HELOC rate for a slightly higher home equity loan rate. Still, at that point, the exchange may be worthwhile if paying a changing HELOC rate each month becomes too stressful (and expensive).
The bottom line
With HELOC interest rates on the decline again, homeowners contemplating the use of this product may be ready to get started. By keeping these three timely considerations in mind, however, they’ll be able to make a more informed decision, positioning themselves for home equity borrowing success both in today’s rate climate and, theoretically, over the extended repayment period of a decade or more.
