Home equity line of credit rates have plunged to their lowest point in three years. According to Bankrate's latest national survey of lenders, the average rate for a $30,000 HELOC fell 78 basis points to 7.44% this week. This drop followed a major lender restarting promotional offers.
In contrast, the average rate for a benchmark five-year $30,000 home equity loan saw a marginal increase, rising one basis point to 7.98%.
"In general, it's a falling-rate environment for HELOCs and home equity loans, although we got a head fake last week when Bank of America ended a HELOC promotion, causing the HELOC average to jump more than half a percentage point," said Ted Rossman, a senior industry analyst at Bankrate. He described the recent two-week period as a "roller coaster ride."
Rossman provided historical context. "A couple of years ago, the average HELOC rate was around 10%, while the average home equity loan charged about 9%," he stated. "With rates perhaps headed closer to 7% by the end of the year, it's getting more attractive to use home equity for purposes such as home improvements and debt consolidation."
Survey data shows the current HELOC rate of 7.44% is also the 52-week low. Four weeks ago, it stood at 7.63%, and one year ago it was 8.28%. The 52-week average is 8.05%.
For home equity loans, the current five-year rate of 7.98% compares to 7.99% four weeks ago and 8.40% one year ago. Its 52-week low is 7.97%, and the 52-week average is 8.23%. Rates for 10-year and 15-year home equity loans also showed slight weekly declines.
Rossman linked the rate movements to Federal Reserve policy and long-term inflation expectations. The Fed cut rates three times in 2025, which sent HELOCs and home equity loans to their lowest levels in two years. He forecasts more relief could come in 2026 if the Fed delivers three projected quarter-point cuts.
"The Fed is now more focused on labor market conditions than on inflation pressures," Rossman said. He believes the economy will stay in good shape this year, which could increase demand for home equity borrowing. "That could actually apply a little downward pressure on rates, too," he added.
Compared to other forms of credit, home equity products remain less expensive due to being secured by property. The survey lists average credit card rates at 19.64% and personal loan rates at 12.19%.
The survey notes that individual offers depend on factors like creditworthiness, home value, and existing loan balances. Lenders typically limit total home loans to 80-85% of a home's value.