HELOC and Home Equity Loan Rates Dip Below 7% for First Time in Over a Year

The interest rates on home equity loans (HELs) and lines of credit (HELOCs) have plummeted to their lowest levels since January 2024, presenting a new window of opportunity for homeowners looking to tap into their home’s equity. Both options feature lower rates, making them more attractive than traditional credit products. The average interest rate on HELs dropped by nearly 0.5 percentage points over the past month, according to data from major lenders, while HELOC rates fell by about 0.7 percentage points. These decreases are largely attributed to changing market conditions and the ongoing efforts of central banks to control inflation. Homeowners who can qualify for these lower interest rates will see significant savings on their monthly payments. A $200,000 home equity loan with a 6.75% interest rate could save an individual up to $150 per month compared to a 7.25% rate, while a HELOC with the same terms would result in savings of around $300 per month. The lower interest rates on HELs and HELOCs are expected to remain stable for the next few months, making now a good time for homeowners to explore their options. However, it’s essential to note that these rates may change as market conditions shift. To take advantage of these lower interest rates, potential borrowers should act quickly, as they won’t last forever. Homeowners who are considering tapping into their home’s equity can use online mortgage calculators or consult with a financial advisor to determine the best course of action for their individual circumstances. By borrowing at these lower interest rates, homeowners can make their homes more affordable and achieve various personal or financial goals, such as paying off high-interest debt, financing home renovations, or funding education expenses.