Compare Current HELOC Rates
Quick Answer
HELOC rates have been declining in 2025, leading more homeowners to consider tapping their existing home equity.
The average home equity line of credit (HELOC) rate is 8.27% as of August 2025, according to data from Curinos. The rate continues a gradual decline in average HELOC annual percentage rates (APRs) since the beginning of 2025, when rates were averaging closer to 9% APR.
Average Rates, Home Equity Loans and HELOCs
Despite both relying on a homeowner's equity as part of the loan approval process, HELOCs and home equity loans have different characteristics.
While home equity loans are fixed-rate loans with fixed payments—120 monthly payments over 10 years is typical—HELOC rates may rise and fall over time. There are additional differences as well, including in how funds are disbursed and (in the case of HELOCs) how long you can borrow against your home equity before having to repay it.
Home Values in the U.S.
But the main reason either a HELOC or home equity loan may be appealing to homeowners today is that home prices have risen considerably over the past five years, which has caused existing equity to swell. Combine that with still relatively slim pickings for other residential real estate and it's unsurprising that homeowners are choosing HELOCs.
Home Values in the U.S.
Meanwhile, traditional mortgage rates remain stubbornly high, averaging around 7% APR throughout 2025. These higher rates have closed off what was a common way to improve a homeowner's financials by refinancing a mortgage to a new one with a lower rate. Since many current homeowners are paying down a mortgage with a fixed rate of less than 4%, refinancing at a higher rate is no longer an option in most cases.
Learn more: How Does the Fed Affect Mortgage Rates?
What Affects HELOC Rates?
The primary difference between HELOCs and other types of loans is that HELOCs are a line of credit with a variable interest rate that can rise and fall over time. For anyone managing credit cards, that should sound familiar, as cards have both credit limits and variable APRs. However, while the average APR for credit cards is close to 25% in 2025, HELOC variable rates are considerably lower.
And also like credit cards, their rates go up and down depending on federal monetary policy. When the Federal Reserve raises interest rates, the rate you'll pay on a HELOC balance will also increase. On the other hand, if the Fed lowers rates, then borrowers' interest payments will be lower.
HELOC Requirements
Lender requirements for HELOCs are similar to those for applying for a mortgage. Requirements tend to vary by lender, however. At a minimum, a homeowner will need:
- Sufficient home equity: This is the value of your home minus any mortgages and loans you may owe to lenders.
- Income verification: Lenders will verify your income to ensure you'll be able to pay back the loan and to help determine the loan amount.
- Adequate credit score and debt management: Checking your credit shows the lender what types of credit you're currently maintaining, and how well you've been managing your debt. This includes calculating how much in monthly payments you owe creditors on credit cards, auto payments and other debts compared to your income, known as your debt-to-income ratio (DTI). Better credit scores may result in a lower annual percentage rate (APR) for would-be home equity loan borrowers.
Learn more: How Do Lenders View Your Credit?
Pros and Cons of HELOCs
The pros and cons of HELOCs include:
Pros
-
Rates are among the lowest available. HELOCs are among the types of consumer loans with the lowest APRs, often only slightly more than the rate for a 30-year fixed-rate mortgage.
-
Borrowers have plenty of time to repay. HELOC repayments can stretch out as long as 30 years if necessary.
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Borrow only what you need. Since a HELOC is a line of credit, you can borrow only as needed. That flexibility is handy, especially if financing needs aren't immediately known. With home equity loans, however, you borrow a lump sum and immediately pay interest on the entire loan amount.
Cons
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Loan default risks loss of property. A borrower's home is the collateral on a HELOC. If a borrower defaults, the property may be repossessed.
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Home price depreciation could put you underwater on your home. If you borrow against the current value of a home that falls sharply in value later, you could end up owing more than your home is worth—and have less equity to show for it.
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HELOC rates can increase and drive up the cost to repay what's borrowed. Although HELOCs have caps that restrict how high interest rates can increase over a life of a HELOC, even modest increases will mean higher interest rates.
How Much Does a HELOC Cost?
How much a HELOC will ultimately cost depends on numerous factors. Some of these factors are in the borrower's control, but others are less so. Generally, HELOC borrowers will pay similar rates as what's available with a home equity loan. A HELOC may actually end up costing less, especially if the entire line of credit isn't used or the HELOC is repaid more quickly.
And either is likely preferable to more costly alternatives, as shown in the table below.
Cost of Financing $50,000 Over 10 Years
| APR | Fixed or Variable APR | Monthly Payment | Total Interest Paid | |
|---|---|---|---|---|
| HELOC** | 8.27% | Usually variable | $613.79 | $23,655 |
| Home equity loan | 7.96% | Usually fixed | $605.58 | $22,669 |
| 5-year personal loan* | 12.37% | Fixed | $1,121.59 | $17,295 |
| Credit card** | 24.69% | Variable | $1,126.56 | $85,186.61 |
*Most personal loans are for 60 months or less
**Monthly payments are constant over 120 months and reduce balance to $0
Note: All calculations exclusive of any fees; presumes no change in variable APR rates
Rates source: Curinos LLC as of August 2025
HELOC Alternatives
There are several borrowing alternatives to HELOCs, some of which don't include home equity as a consideration.
Home Equity Loans
Home equity loans are a lump-sum alternative to a home equity line of credit, and tend to have APRs similar to those of HELOCs. You pay interest on the entire amount borrowed, however, versus only paying interest on the amount drawn from a HELOC. Most home equity loans are fixed-rate loans with terms up to 30 years.
Cash-Out Refinances
Once a popular way to refinance a mortgage at a lower rate, cash-out refinances allow the borrower to refinance to a new mortgage and tap their existing equity as well. Unfortunately, the math doesn't work for most would-be refinancers when mortgage rates are elevated. Many homeowners with a mortgage are currently paying 4% or less in interest; trading in a lower-rate mortgage for a 7% rate doesn't make sense.
Personal Loans
Personal loans are available to consumers with or without home equity. Borrowers with better credit scores are likely to receive more approvals at better rates—though even the best personal loan rates are usually higher than HELOC rates.
Lenders offer a wide range of personal loan amounts, which means they could be a better choice for those looking to borrow less than the $50,000 or more that most home equity loans and HELOCs target.
Most personal loans are unsecured loans, meaning if you're unable to repay a loan, you won't lose a secured property.
0% Intro APR Credit Card
If you're looking to finance a purchase you can repay quickly or get out from under some previously accumulated credit card balances, a 0% introductory balance transfer offer could help reduce interest costs. Balance transfers aren't free: Many issuers change as much as 5% of the balance you're seeking to refinance.
The Bottom Line
HELOCs are one of the least costly ways to obtain financing for homeowners with sufficient equity, which could save borrowers thousands of dollars in interest payments versus other types of loans. But they're not without risk: HELOCs are secured by the borrower's property, so the homeowner could lose their home if they default on the loan.
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About the author
Chris Horymski
Chris Horymski leads Experian Consumer Service’s data research for Ask Experian, where he publishes insights and analysis on consumer debt and credit. Chris is a veteran data and personal finance journalist and previously wrote the Money Lab column for Consumer Reports and headed research at SmartMoney Magazine.
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