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Current home equity line of credit (HELOC) rates for July 2025

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Updated on Jul 16, 2025
The national average HELOC interest rate is 8.27% as of July 9, 2025, according to Bankrate’s latest survey of the nation’s largest home equity lenders.

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What are the current HELOC interest rates?

LOAN TYPE AVERAGE RATE AVERAGE RATE RANGE
HELOC 8.27% 4.99% - 12.50%

Average home equity line of credit (HELOC) rate

National HELOC interest rate trends - July 9, 2025

HELOC rates the same for third consecutive week

HELOC rates remained the same for the fourth week in a row, with the average $30,000 line of credit HELOC at 8.27 percent, according to Bankrate’s national survey of large lenders. 

Home equity credit lines have variable interest rates that change based on the prime rate, which is tied to changes in Federal Reserve monetary policy. At its latest meeting in June, the Fed voted to leave interest rates steady, as it weighs inflation risks and the impact of President Trump’s tariffs on the economy. The next Fed meeting is taking place at the end of this month, July 29-30. 

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.

Ultimately, your decision on how to tap your home equity hinges upon your overall financial situation and what you're planning to use the money for, says Ted Rossman, senior industry analyst at Bankrate. “For example, if you really need to finance a new roof, a home equity loan or line of credit could be a viable option. If it's something more discretionary, maybe it makes sense to hold off until you can make that purchase without taking on debt.”

Factors that determine your HELOC rate

Both your personal financial profile and economic/financing trends play a role in the HELOC rate you will ultimately receive. Factors include:

  • Federal Reserve policy: HELOC rates are usually based on the prime rate, which in turn reflects the Federal Reserve’s monetary policy moves. When the Fed raises or lowers interest rates, the prime rate follows, and your HELOC rate reflects the change.
  • Credit score: The higher your score, the better your rate. If your credit history shows on-time payments and low debt, lenders may offer you a lower interest rate.
  • Loan-to-value ratio: This is the amount you wish to borrow on your home versus your home’s worth, expressed as a percentage. The lower your LTV, the less risky the lender perceives you. 
  • Loan type, amount & property: Bigger loans or longer repayment periods can come with higher rates, simply because they present more risk for the lender over time. Pulling equity from a second home or investment property is also considered riskier than borrowing against your primary residence, so expect to pay more if you’re doing so.
  • The lender you choose: Lender rates and terms can vary greatly. Many offer discounts to borrowers who already bank with them. Some lenders offer teaser rates on HELOCs–an especially low interest rate for a set time period. 

How to get the best HELOC rate

If you’re interested in a HELOC, it pays to do your homework and to shop around. Rates and terms can vary more than you’d think, and a little prep can go a long way.

  • Check if you qualify: Before you start looking, make sure you meet lenders’ basic requirements for HELOCs. That usually means a good credit score, a solid and steady income, and sufficient home equity (at least a 15-to-20 percent stake).
  • Polish your finances: Boost your credit score by paying down credit cards, and paying off other big debts, like auto loans, if you’re close to the end of them anyway. Making extra mortgage payments allocated to your principal can also help build equity.
  • Compare at least three lenders: And don’t just look at the HELOC interest rate. Scrutinize all the closing costs and fees, whether upfront or ongoing. Then you’ll have a sense of your annual percentage rate (APR), the true cost of your loan. 
  • Read the fine print: Not all HELOCs are created equal. Watch for hidden fees, prepayment penalties, and confusing terms. Be sure to check what the floor and ceiling are on the interest rate (the lowest and highest it can go). Note under what circumstances, if any, the lender can freeze or lower your credit line.

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

LOAN TYPE CREDIT LINE AMOUNT TERM PERIOD CURRENT APR
Up to $1 million 10-year draw, 20-year repay 6.49% (for 12 months)
$25,000–$400,000 Up to 30 years 6.60%
$10,000–$300,000 10-year draw, 30-year total repay period 6.99%
Starting at $25,000 10-year draw, 20-year repay 7.34%
$25,000-$150,000 10-year draw/ 20-year repay for variable-rate HELOC; 5–20-year repay for fixed-rate HELOC 7.67% (fixed) / 7.88% (variable)
$15,000–$1 million 10-year draw, 20-year repay 8.05% (6.49% - 6-month intro rate)
Starting at $5,000 15-year draw, 15-year repay 8.17% standard HELOC / 8.67% interest-only HELOC
$10,000–$500,000 30 years 8.25%

Note: The above APRs are current as of July 9, 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.

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 pros and cons of a HELOC.

PROS

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

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    Typically lower upfront costs than home equity loans.

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    Lower interest rates than with credit cards.

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    Usually low or no closing costs.

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    Interest charged only on the amount of money you use.

CONS

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    Lenders may require minimum draws.

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    Interest rates can adjust upward or downward.

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

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    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:

  • Home equity loan: Functions like a second mortgage. You get a lump sum upfront and repay it at a fixed interest rate over time. Best if you prefer predictable payments.
  • Cash-out refinance: Replaces your existing mortgage with a bigger one, giving you the difference in a cash payout.
  • Reverse mortgage: Designed for older homeowners, this lets you tap your home equity, either in installments or a lump sum, without monthly repayments. You repay the loan only when you move out, sell the home, or pass away.
  • Personal loan: Like a home equity loan, has a fixed interest rate and disburses money in a lump sum. Tends to have shorter terms and higher interest rates than home equity financing.

FAQs about home equity lines of credit

Meet our Bankrate experts 

Written by: Linda Bell, Senior Writer, Home Lending 

For more than two decades, I have covered the housing market, including in depth coverage of the 2008 housing market collapse. To increase my knowledge of home equity and HELOCs, I earned a Certified HELOC Specialist designation from the National Association of Mortgage Underwriters (NAMU). Throughout my career, I have won more than two dozen awards, most notably from the National Association of Real Estate Editors (NAREE) and the New York Association of Black Journalists (NYABJ) for an investigative series I produced on minorities and the housing industry. 

Read more from Linda Bell

Edited by: Troy Segal, Senior Editor, Home Lending 

As a senior editor on Bankrate’s Home Lending team, I handle coverage of residential real estate, specializing in the finer points of homeownership, home equity and home-based financing. I hold a Certified Mortgage Underwriter designation from the National Association of Mortgage Underwriters. Throughout my career, I’ve also written and edited articles on a variety of personal finance, investment and wealth management topics. I was named one of Fixr.com’s “30 Top Home Improvement Journalists” in 2024. 

Read more from Troy Segal 

Reviewed by: Mark Hamrick, Senior Economic Analyst 

I am an award-winning business and financial journalist, with decades of experience in the news business. I can often be found on television, radio and in print, where I make complex financial topics easy to understand. I have also helmed two major journalism organizations and am a champion for financial literacy and press freedom around the globe. 

Read more from Mark Hamrick