Images by GetTyimages. Illustrations by bankrate
A peaceful week of home equity rates. According to Bankrate’s National Lenders Survey, the average rate for the $30,000 Home Equity Line (HELOC) was unchanged at 8.27%. The average rate for the $30,000 home equity loan was also stable at 8.26%.
Since the beginning of June, the HELOCS and HOME equity loan rates have been nearly lockstep. This is a situation I’ve never seen since 2023. TAIChristian is the president of Adrical Home, Tai Christian, a facilitator of the UTHA-based affordable housing program. Whether one is more affordable than the others depends primarily on the Federal Reserve, and “we won’t see you again until the end of the month to decide whether interest rates will change.” “At this point, both remain better options compared to interest rates on alternatives such as credit cards.”
| the current | 4 weeks ago | 1 year ago | 52-week average | 52 weeks low | |
|---|---|---|---|---|---|
| helic | 8.27% | 8.27% | 9.17% | 8.55% | 7.90% |
| 5 Years of Home Equity Loan | 8.26% | 8.25% | 8.60% | 8.41% | 8.23% |
| 10 Years of Home Equity Loan | 8.42% | 8.40% | 8.74% | 8.54% | 8.38% |
| 15 years of home equity loan | 8.35% | 8.33% | 8.73% | 8.48% | 8.32% |
| Note: The home equity rate for this study is assumed to be a $30,000 line or loan amount. | |||||
What is your home equity rate today?
Prices for Helocs and Home Equity Loans are driven primarily by two factors: Lender competition and federal reserve action for new clients. The Fed affects the cost of variable rate products, especially for HeLocs.
Both Helocs and Home Equity Loans have dropped significantly from the highs reached in early 2024, but have moved from the lows they achieved this year. Bankrate Chief Financial Analyst Greg McBride predicts that in 2025, the rates, particularly Helock’s rates, will reach their lowest levels in three years.
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Current hOmelette rate vs. other types of credit rates
Because Helocs and Home Equity Loans use their homes as collateral, the fees tend to be much cheaper than the interest charged on credit cards or personal loans.
| Credit Type | Average rate |
|---|---|
| helic | 8.27% |
| Home Equity Loan | 8.26% |
| Credit Card | 20.13% |
| Personal loan | 12.65% |
| Source: National survey of lenders, July 2nd | |
Of course, the individual offers you receive on a particular HELOC or a new home equity loan reflect additional factors such as creditworthiness and financial obligations. Then there is the value of your home and your ownership. Lenders generally limit all home loans (including mortgages) to up to 80-85% of the value of your home.
Even if we can secure a good rate from lenders, home equity products are still relatively high debt, Rothman points out. “Now that the average residential equity loan and credit rate line is in the 8% range, so that’s close to the boundary of what distinguishes low-cost and high-cost liabilities,” he says. “It’s not as low as the sub-4% rate I saw three years ago, but not as high as the 10% rate I observed a year and a half ago.”
