Best home equity line of credit (HELOC) rates for January 2025

Written by
Jeff Ostrowski
and
Linda Bell
Edited by
Troy Segal
Reviewed by
Mark Hamrick
Edited by
Troy Segal
Reviewed by
Mark Hamrick
Updated January 09, 2025
On This Page

What are today's average HELOC rates?

LOAN TYPE AVERAGE RATE AVERAGE RATE RANGE
HELOC 8.27% 7.68% – 10.06%

To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. The rates shown above are calculated using a loan or line amount of $30,000, with a FICO score of 700 and a combined loan-to-value ratio of 80 percent.

Note: The above APRs are current as of January 8, 2025. The exact APR you might qualify for depends on your credit score and other factors, such as whether you're an existing customer or enroll in auto-payments.

National HELOC interest rate trends

HELOC rates plunge as 2025 begins

The average rate on a home equity line of credit (HELOC) dropped 9 basis points to 8.27 percent as of Jan. 8, the lowest level in a year and a half, according to Bankrate’s nationwide survey of large lenders. 

More HELOC declines could be in store as the year continues. Greg McBride, Bankrate's chief financial analyst, forecasts that the average HELOC rate will be 7.25 percent by the end of 2025, a low not experienced since 2022.

Home equity credit lines have variable interest rates that change based on the prime rate, which is tied to changes in the Federal Reserve monetary policy. Beginning last September, the Fed lowered interest rates three times in a row in 2024. According to McBride, the Fed will deliver three more rate cuts this year, moves he says will translate into lower HELOC rates in 2025.  

In addition to the Fed, HELOC averages can also change because one or more home equity lenders markets an especially generous rate for a promotional period. That’s one reason why it often pays to search around for HELOC offers, at least for a lower introductory rate. “American homeowners will continue to sit on a mountain of home equity, but aside from short-term HELOC introductory rates, borrowing against it in 2025 will still be pricey,” McBride says.

Still, HELOCs are more attractively priced compared to unsecured personal loans, which currently average 12.48 percent. “Regardless of rate fluctuations, a HELOC is always a wiser choice than high-interest credit card or personal loan debt,” says Michael Tannenbaum, CEO of Figure, a home equity lender.

If you’re looking to finance a renovation and have equity to tap, a line of credit could be less expensive than a home improvement loan. It’d also save you from a cash-out refinance, which could mean giving up a low rate on your mortgage in exchange for a new one.  

A line of credit isn’t the only way to leverage your home’s equity. Another option: home equity loans, or second mortgages, which come with fixed interest rates. As of Jan. 8, the average rates for a 10-year, $30,000 loan and a 15-year, $30,000 loan were at 8.55 percent and 8.49 percent, respectively, according to Bankrate’s survey.

How to get the best HELOC rate

When shopping for a HELOC, look for a competitive interest rate, repayment terms that meet your needs and minimal fees. Loan details presented here are current as of the publication date. Check the lenders’ websites for more current information. The top lenders listed below are selected based on factors such as APR, loan amounts, fees, credit requirements and broad availability.

Before you start shopping for a HELOC, make sure you meet lenders’ requirements. Then, take some time to improve your credit score. If you carry a big credit card balance, pay it down. If your auto loan note is almost done, you might pay it off a month or two early. You might also make a few additional mortgage payments to increase your home equity.
 
Once everything is in order, shop around. To find the best HELOC rate, compare multiple lenders — a rule of thumb is to get quotes from at least three. Remember, the rate is important, but it’s not the only factor you should consider. Competing HELOC rates are likely to be close, so be sure to also scrutinize fees and terms to get a sense of the APR, and make sure you’re not comparing apples to oranges.

Best home equity line of credit (HELOC) rates in January 2025

LOAN TYPE CREDIT LINE AMOUNT TERM PERIOD CURRENT APR
$10,000–$500,000 30 years 6.24%
Up to $1 million 10-year draw, 20-year repay 6.99%
$25,000-$150,000 10-year draw/ 20-year repay for variable-rate HELOC; 5-20-year repay for fixed-rate HELOC 7.42% (fixed) / 8.13% (variable)
$15,000–$1 million 10-year draw, 20-year repay 8.05%
$25,000–$400,000 Up to 30 years 6.75%
$10,000–$300,000 10-year draw, 30-year total repay period 6.99%
Starting at $25,000 10-year draw, 20-year repay 7.49%
Starting at $5,000 15-year draw, 15-year repay 8.62% standard HELOC / 9.12% interest-only HELOC

Note: The above APRs are current as of January 3, 2025. The exact APR you might qualify for depends on your credit score and other factors, such as whether you're an existing customer or enroll in auto-payments.

Comerica Logo
4
Bankrate Score
Lender
Comerica Bank
Interest Rates
Starting at 6.24% APR (special introductory rate)
Approval Time
N/A
Max LTV Ratio
80%
Minimum Credit Score
N/A
Available Term Lengths
30 years
Line of Credit Amount
$10,000-$500,000
Fees
Comerica’s fees vary by state. For example, California has an early termination fee of 2 percent of the credit limit with a maximum fee of $500 if the account is closed within the first three years.

Bethpage Federal Credit Union logo
4.2
Bankrate Score
Lender
Bethpage Federal Credit Union
Interest Rates
6.99% APR (for 12 months)
Approval Time
6-10 weeks
Max LTV Ratio
75%
Minimum Credit Score
720
Available Term Lengths
10-year draw period with a 20-year repayment period
Line of Credit Amount
Up to $1,000,000
Fees
If you close your HELOC within 36 months, you'll need to repay the closing costs you would've paid. Hazard insurance and flood insurance may be required.

Bank of America logo
3.5
Bankrate Score
Lender
Bank of America
Interest Rates
Starting at 8.05% APR (varies by state)
Approval time
5-7 weeks
Max LTV Ratio
85%
Minimum Credit Score
Unavailable
Available Term Lengths
10-year draw period with a 20-year repayment period
Line of Credit Amount
Starting at $15,000 to $1,000,000
Fees
Early closure fee of $450, plus taxes and fees, applies to accounts closed within 36 months

4.5
Bankrate Score
Lender
Third Federal Savings
Interest Rates
6.99% APR
Approval Time
Not Specified
Max LTV Ratio
80% (for loan amounts up to $200,000)
Minimum Credit Score
Not specified
Available Term Lengths
30 years
Line of Credit Amount
$10,000 to $300,000
Fees
You don’t need to worry about application or origination fees with Third Federal, and you can pay off your debt early without a penalty. The only charge you’ll incur is a $95 annual fee. However, HELOCs do carry a minimum monthly payment of $100.

4.5
Bankrate Score
Lender
BMO
Interest Rates
7.42% (fixed) / 8.13% (variable)
Approval Time
30 days
Max LTV Ratio
70%
Minimum Credit Score
650-680
Available Term Lengths
10-year draw period and 20-year repayment term for HELOC (5-year to 20-year repayment term for fixed-rate HELOC)
Line of Credit Amount
$25,000-$150,000
Fees
BMO advertises both home equity loans and HELOCs with no application fees and low-to-no closing costs. If you close your account within three years, the bank might charge a fee to recoup closing costs, though. Additionally, the variable-rate HELOC comes with a $75 annual fee during the draw period, and there’s a $75 fee every time you convert a part of your balance to a fixed rate after closing.

TD Bank logo
4.1
Bankrate Score
Lender
TD Bank
Interest Rates
7.49% APR
Approval Time
Up to 30 days
Max LTV Ratio
90%
Minimum Credit Score
660
Available Term Lengths
10-year draw, 20-year repayment
Line of Credit Amount
Starting at $25,000
Fees
There’s a $50 annual fee on loans over $50,000 and a $99 origination fee. The 2% termination fee (max $450) applies if you pay the line of credit off and close it within 24 months. You will also have to pay closing costs on lines over $500,000.

Connexus Credit Union logo
3.5
Bankrate Score
Lender
Connexus
Interest Rates
8.62% standard HELOC / 9.12% interest-only HELOC
Approval Time
within 30 days of applying
Max LTV Ratio
90%
Minimum Credit Score
640
Available Term Lengths
15-year draw period with a 15-year repayment term
Line of Credit Amount
Starting at $5,000
Fees
Connexus’ HELOC doesn’t have an annual fee, but membership in the credit union is required. Depending on loan terms and property location, closing costs can range from $175 to $2,000.

3.3
Bankrate Score
Lender
Guaranteed Rate
Interest Rates
6.75% APR
Approval Time
5-10 minutes
Max LTV Ratio
85%
Minimum Credit Score
640
Available Term Lengths
Two-year to five-year draw period, up to 30-year repayment period
Line of Credit Amount
$25,000-$400,000 (Minimum of $25,001 in Alaska)
Fees
Guaranteed Rate charges a 1.99% origination fee for a HELOC. This charge is deducted from the line of credit, however; you don’t need to bring any money to closing.

Methodology

To determine this best HELOC rates list, we surveyed over 30 lenders offering home equity lines of credit. The top HELOC rates displayed here may be special introductory rates, and represent the lowest advertised APR (annual percentage rate) based on a borrower with a credit score of 700 or higher and a combined loan-to-value (CLTV) ratio of 80 percent obtaining a 30-year, $30,000 home equity line of credit.

Note that the lenders listed here are based solely on their offering the lowest APR, and are not necessarily the best overall HELOC lenders Bankrate has scored. Learn more about Bankrate’s lender review methodology.

What is a home equity line of credit, or HELOC?

A HELOC is a variable-rate home equity product that works like a credit card — you have access to a credit line that you can draw from and pay back as needed. HELOC rates are tied to a benchmark interest rate. As the prime rate moves up or down, so does your HELOC rate. Payments vary depending on the interest rate and how much money you have used.
 
 

How does a HELOC work?

With a HELOC, you’re given a line of credit that’s available for a set time frame (known as the draw period), usually up to 10 years. While most HELOCs have an interest-only draw period, you can make both interest and principal payments to pay off the line of credit faster.

When the line of credit’s draw period expires, you enter the repayment period, which can last up to 20 years. You’ll pay back the outstanding balance that you borrowed, as well as any interest owed. A lender may allow you to renew the credit line.

How do I qualify for a HELOC?

In addition to estimating your home equity, lenders look at your credit history, credit score, income and other debts. Most lenders require a combined loan-to-value ratio (CLTV) of 85 percent or less, a credit score of 620 or higher and a debt-to-income (DTI) ratio below 43 percent to approve you for a home equity line of credit.

Your home equity is the key factor lenders look at when deciding if you will qualify for a HELOC. Remember, your equity serves as collateral for the HELOC, and lenders require that you have enough of an ownership stake in your property. While the criteria differ among lenders, some may let you tap as much as 90 percent of your home’s value. But to do so, you also must meet very stringent credit and debt-to-income requirements. — Linda Bell, Senior Writer, Home Lending
Read more: HELOC and home equity loan requirements in 2024

Pros and cons of HELOCs

HELOCs combine relatively low interest rates with the flexibility to borrow what you need when you need it. If you need money over an unpredictable period of time, a line of credit is ideal. However, there are always risks when you take out a loan, especially one that's secured by your home. Here are some of the key considerations for getting a HELOC.

PROS

  • Checkmark Icon

    Lets you tap home equity without disturbing the primary mortgage (nice if you’ve locked in a low rate).

  • Checkmark Icon

    Typically lower upfront costs than home equity loans.

  • Checkmark Icon

    Lower interest rates than with credit cards.

  • Checkmark Icon

    Usually low or no closing costs.

  • Checkmark Icon

    Interest charged only on the amount of money you use.

CONS

  • Close X Icon

    Lenders may require minimum draws.

  • Close X Icon

    Interest rates can adjust upward or downward.

  • Close X Icon

    Lenders may charge a variety of fees, including annual fees, application fees, cancellation fees or early closure fees.

  • Close X Icon

    Late or missed payments can damage your credit and put your home at risk.

Alternatives to a HELOC

A HELOC is not the right choice for every borrower. Depending on what you need the money for, one of these alternative options may be a better fit:

HELOC vs. home equity loan

While similar in some ways — they both allow homeowners to borrow against the equity in their homes — HELOCs and home equity loans have a few distinct differences. A HELOC functions like a credit card with a revolving line of credit and typically has variable interest rates. A home equity loan functions more like a second mortgage, providing funds upfront in a lump sum at a fixed rate of interest.

HELOC vs. cash-out refinance

A cash-out refinance replaces your current home mortgage with a larger home loan. The difference between the original mortgage and the new loan is disbursed to you in a lump sum. The main difference between a cash-out refinance and a HELOC is that a cash-out refinance requires you to replace your current mortgage, while a HELOC leaves your current mortgage intact; it adds an additional debt to your finances.

HELOC vs. reverse mortgage

With a reverse mortgage, you receive an advance on your home equity that you don't have to repay until you leave the home. However, these often come with many fees, and variable interest accrues continuously on the money you receive. These are also only available to older homeowners (62 or older for a Home Equity Conversion Mortgage, the most popular reverse mortgage product, or 55 and older for some proprietary reverse mortgages).

Read more: HELOC vs. reverse mortgage

HELOC vs. personal loan

Personal loans may have higher interest rates than home equity loans, but they don't use your home as collateral. Like a home equity loan, they have fixed interest rates and disburse money in a lump sum.

FAQs about home equity lines of credit

Home equity lenders reviewed by Bankrate

Why trust Bankrate?

At Bankrate, our mission is to empower you to make smarter financial decisions. We’ve been comparing and surveying financial institutions for more than 40 years to help you find the right products for your situation. Our award-winning editorial team follows strict guidelines to ensure our content is not influenced by advertisers. Additionally, our content is thoroughly reported and vigorously edited to ensure accuracy.

When shopping for a HELOC, look for a competitive interest rate, repayment terms that meet your needs and minimal fees. Loan details presented here are current as of the publication date. Check the lenders’ websites for more current information. The top lenders listed below are selected based on factors such as APR, loan amounts, fees, credit requirements and broad availability.