HELOC rates today, July 31, 2025: The home equity line of credit rate remains as steady as the Federal Reserve

Yahoo

02-08-2025

Second mortgage HELOC rates remain unmoved, much like the Federal Reserve. Yesterday, the Fed resisted a presidential plea for a short-term interest rate cut. Now, Wall Street has bumped back expectations for an interest rate break to October — and perhaps just one, rather than two, before the end of the year.
While home equity line of credit rates remain tame, an interest rate cut would move the prime rate lower, with variable HELOC rates likely following. Best strategy: find a low introductory rate that covers you until the Fed makes a move.
Here's the latest on the home equity line of credit interest rate.
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HELOC rates Thursday, July 31, 2025
According to Bank of America, the largest HELOC lender in the country, today's 50-state national average variable rate on a 10-year draw HELOC is 8.72%. Remember, that variable rate kicks in after a six-month introductory rate of 6.49%.
The minimum average APR is 8.05%, with the maximum at 9.59%.
Homeowners have a staggering amount of value tied up in their houses — more than $34 trillion at the end of 2024, according to the Federal Reserve. That's the third-largest amount of home equity on record.
With mortgage rates lingering in the high 6% range, homeowners are not going to let go of their primary mortgage anytime soon, so selling a house may not be an option. Why let go of your 5%, 4% — or even 3% mortgage?
Accessing some of that value with a use-it-as-you-need-it HELOC can be an excellent alternative.
How lenders determine HELOC interest rates
HELOC interest rates are different from primary mortgage rates. Second mortgage rates are based on an index rate plus a margin. That index is often the prime rate, which today is 7.50%. If a lender added 1% as a margin, the HELOC would have a variable rate of 8.50%.
Lenders have flexibility with pricing on a second mortgage product, such as a HELOC or home equity loan, so it pays to shop around. Your rate will depend on your credit score, the amount of debt you carry, and the amount of your credit line compared to the value of your home.
And average national HELOC rates can include "introductory" rates that may only last for six months or one year. After that, your interest rate will become adjustable, likely beginning at a substantially higher rate.
How a HELOC works
The best HELOC lenders offer low fees, a fixed-rate option, and generous credit lines. A HELOC allows you to easily use your home equity in any way and in any amount you choose, up to your credit line limit. Pull some out; pay it back. Repeat.
Meanwhile, you're paying down your low-interest-rate primary mortgage like the wealth-building machine you are.
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Look for introductory rates, but be aware of a rate adjustment later
Today, Achieve.com is advertising HELOC rates as low as 6.74%. No doubt, that's an introductory rate. After a period of time, it will become a variable rate. When shopping lenders, be aware of both rates. And as always, compare fees, repayment terms, and the minimum draw amount. The draw is the amount of money a lender requires you to initially take from your equity.
The power of a HELOC is tapping only what you need and leaving some of your line of credit available for future needs. You don't pay interest on what you don't borrow.
HELOC rates today: FAQs
What is a good interest rate on a HELOC right now?
Rates vary so much from one lender to the next that it's hard to pin down a magic number. You may see rates from nearly 7% to as much as 18%. It really depends on your creditworthiness and how diligent a shopper you are.
Is it a good idea to get a HELOC right now?
For homeowners with low primary mortgage rates and a chunk of equity in their house, it's probably one of the best times to get a HELOC. You don't give up that great mortgage rate, and you can use the cash drawn from your equity for things like home improvements, repairs, and upgrades. Of course, you can use a HELOC for fun things too, like a vacation — if you have the discipline to pay it off promptly. A vacation is likely not worth taking on long-term debt.
What is the monthly payment on a $50,000 home equity line of credit?
If you take out the full $50,000 from a line of credit on a $400,000 home, your payment may be around $395 per month with a variable interest rate beginning at 8.75%. That's for a HELOC with a 10-year draw period and a 20-year repayment period. That sounds good, but remember, it winds up being a 30-year loan. HELOCs are best if you borrow and pay back the balance in a much shorter period of time.