What’s a good HELOC interest rate in 2025?

Before borrowing money, it’s critical to first calculate your potential repayments. To do so, you’ll need a set of figures to complete the calculation with the interest rate on the product — the most important factor. And, lately, this figure hasn’t been particularly advantageous for borrowers. Interest rates on personal loans, for example, are closing in on 13%. Mortgage rates, meantime, dropped to a two-year low last September but have since rebounded to where they were last summer. And credit card rates are now close to 23%, on average, a record high.

Against this backdrop, homeowners have one viable alternative — their home equity. With a home equity line of credit (HELOC), specifically, owners can withdraw a significant portion of their equity and they can do so at a lower interest rate than those alternatives. And thanks to its variable rate structure, that rate could drop even lower in the months to come as additional interest rate cuts are issued. So this could be the optimal way to borrow money right now. Prior to applying, however, owners should first know what’s considered to be a good HELOC interest rate right now, to start 2025.

Start by seeing what HELOC interest rate you’d be eligible for here.

What’s a good HELOC interest rate in 2025?

Ideally, the lower your interest rate, the better. Fortunately, HELOC interest rates have been on the decline. After steadily dropping for much of 2024, rates on the line of credit started in 2025 by hitting an 18-month low, dropping to an average of 8.27% for a $30,000 HELOC. So if you can secure that rate or one that’s even lower, you can consider your HELOC rate good. But how do you find a good HELOC rate right now? Here are three actions prospective borrowers can take:

Shop around for lenders

You don’t need to use your current mortgage lender to borrow with a HELOC. So, consider shopping around to compare rates and terms from at least three other lenders. Then go back to your current lender to see if they can match or improve those terms. Even a small difference in rates can pay off during the common 10- or 15-year HELOC repayment periods.

Start shopping for HELOC lenders online now.

Boost your credit score

Remember that the best borrowing rates and terms will always be reserved for those with the highest credit scores. Be sure, then, to first work on your credit before submitting an application or you’ll risk being offered a higher-than-average rate. This means refraining from additional credit use, paying down (or off) existing debt and making current payments on time (or early).

Consider your repayment periods

Rates on HELOCs will be different based on the repayment periods. Generally (but not always), borrowers will be able to secure a lower rate on a shorter HELOC repayment period, like 10 years, than they would on a longer one, like a 15-year HELOC. That said, a condensed time frame will lead to larger monthly payments. But if you can afford that higher amount, it’ll be worth it due to both the shorter loan term and the interest savings earned by condensing the payoff.

The bottom line

Right now, a good HELOC interest rate is around 8.27% or lower for qualified borrowers. However, rates on HELOCs are variable and subject to adjust to the rate climate. It’s important to budget for this potential volatility in advance of any changes ahead. Rates will fall as the Fed cut rates but they could rise or stagnate, too. So if you’re looking for a fixed, low-rate way to borrow your equity, a home equity loan may be worth exploring as an alternative.

Learn more about your HELOC and home equity loan options here.