To get the best rate on a HELOC in 2025, you will need to do quite a bit of shopping. You should talk to large national banks, community banks, credit unions, and online home equity lenders. The Home Equity Mart will introduce you to trusted lenders that have access to many home equity credit line programs with competitive HELOC interest rates, so we may be able to assist you.
How to Get the Best HELOC Interest Rate
HELOCs have many aspects, such as variable interest rates, introductory rates and teaser rates, fees, closing costs, and maybe balloon payments. So, you should review your different HELOC programs from lenders before you sign.
Next, understand what your credit score is by ordering credit reports from Experian, TransUnion, and Equifax. You are allowed to get a free report from each one annually. You should know your credit score before you apply for a home equity line of credit and try to get it higher if necessary. That way, you can qualify for the best rate.
Whether you are shopping for the best HELOC rates in Arizona, Michigan, Ohio, Texas or California, the Home Equity Mart can help you compare home equity lenders in all 50 states. HEM will help you shop home equity loans and credit lines from competitive banks and lenders online.
When you compare HELOC offerings from a few home equity loan lenders – including us, hopefully! – you should watch for these items:
• Teaser rates that are temporary: Most HELOCs have a low introductory interest rate that may last for a few months or a year. Teaser rates are fine, but you should make sure to know how long it lasts. You also should know what the rate will be when the introductory period is over. In many cases, it is a variable rate that could go up and down.
• Markups on the HELOC rates: Home equity lines are usually based on the prime rate, but for your line of credit, you will pay the prime rate plus whatever the lender’s markup is. Different lenders have various markups, so look around to find the best HELOC loan rates.
• HELOC Rate cap: Learn if the lender has a cap on how high the line of credit interest rate can go.
• What is the HELOC draw period? Most lenders extend an HELOC interest only payment draw period between five and ten years.
• Learn about HELOC fees: Some lenders will charge different fees and and closing costs so you can understand what they are. Shop for a no cost HELOC.
• Look for a balloon payment: A balloon payment at the end of the loan can be used to give you a lower payment. Sometimes the best HELOC rate comes with the balloon option.. Know up front if there is a balloon payment so you can plan.
• Watch for prepayment penalties: If you can pay off the loan all at once, you don’t want to be charged a prepayment penalty.
The Home Equity Mart can match you with loan professionals that offer competitive mortgage rates on many HELOC programs and home equity loans, so please contact us and we will lay out several affordable options.
HELOC Introductory Rates
To get you to sign up, the lender could use a teaser or introductory rate which could be below prime. There is nothing wrong with this, and the teaser rate could be well below anything you can get in 2024 with a credit card or personal loan. Many introductory rates last for six to 12 months, but some may allow the teaser rate for up to two years.
But at the end of the teaser period, the interest rate will always go up. It’s possible the rate and payment can double, so always know what you are getting into before applying for a home equity line of credit. In most cases you will need a stellar credit history to qualify for a HELOC with a low intro rate.
What Will HELOC Rates Be Like in 2025?
According to the Wall Street Journal, this is a good time to consider a HELOC. Despite the recent increase in rates across various financial products, HELOC interest rates remain lower compared to similar options. While interest rates on credit cards have exceeded 21%, and personal loan rates are at 11 to 15% or more, the average HELOC rates presently hover in the high single digits.
As most Americans know, interest rates have climbed substantially since the pandemic. In early 2025, the typical equity line of credit has a 9-10% interest rate. This is much higher than in 2020, but a 9% rate is still much lower than you can get with any unsecured loan.
It seems that the Federal Reserve has gotten inflation down to about 3-4% in the last several months. This is why they are not planning on rate increases in 2025. They may even start to cut rates later this year, which would put downward pressure on home equity loan HELOC rates.
It’s impossible to say what HELOC rates will be in six months or a year, but based on the Fed’s words and actions, it’s possible rates could start to fall for all mortgage products. HELOCs have a variable rate, so if you close on a home equity loan soon, you could end up with a lower rate in the near future. But things can change.
If you aren’t comfortable with the variable interest rate uncertainty, another option to get your equity in cash is to apply for a home equity loan. This is a fixed-rate loan with a defined payment schedule for the life of the home equity loan.
Many homeowners enjoyed rising home values in the past three years, which means they have more equity in their homes. If you have large expenses and want to tap some of that equity, one option is a home equity line or credit or HELOC.
HELOC Rate Forecast for 2025
HELOC interest rates are variable, which means they can increase or decrease, significantly affecting your monthly payments. The movement of HELOC rates is indirectly influenced by the Federal Reserve’s actions on the federal funds rate.
Recent trends show inflation levels decreasing, and the Fed has hinted that it might pause rate hikes. However, officials have not yet ruled out further increases. If inflation doesn’t continue to slow, HELOC rates are likely to stay high.
- Shop home equity loans with fixed interest rates
- Compare HELOCs with interest only payments
Are HELOC Interest Rates Expected to Rise up or Fall?
Most economist and finance advisors anticipate that home equity interest rates will fall in 2025. The variable-rate HELOCs could retain their appeal for homeowners seeking borrowing options. However, it’s crucial to weigh the advantages, disadvantages, and alternative solutions before pursuing a home equity line of credit. It always make sense to shop and compare to secure the best HELOC loan rates before making a commitment. Compare rates on a HELOC and cash out refinance.
How to Shop for the Best HELOC Rates Online
This is a second mortgage loan that you can use to take out some cash for things you need, such as home renovations or paying off credit card debt. Many homeowners are choosing a HELOC to consolidate debt in 2025. Learn about HELOCs below and how to shop for the best interest rate. If you have questions or want to apply, speak to one of our loan professionals today.
The average HELOC rate today ranges between 8% and 10%. When determining the best HELOC options, we considered various factors, with the APR being a key consideration.
How are HELOC Line of Credit Rates Set?
The interest rates associated with various loans and credit products, including home equity lines of credit, (HELOCs), often rely on the prime rate as a foundation. This fundamental index serves as a standard rate for numerous banks and financial entities, adjusting in response to market dynamics and the federal funds rate established by the Federal Reserve.
Many banks establish their home equity line interest rates by adding or subtracting a fixed margin from the prime rate. For instance, a bank might advertise the best HELOC rates ranging from prime minus 0.5% to prime plus 5%. While future fluctuations in the prime rate cannot be precisely predicted, understanding this spread provides a general indication of the bank’s rate range. For the most part, banks, credit unions and lenders will set HELOC rates based on credit scores and loan to value.
What Are Today’s HELOC Introductory Rates?
As of March 2025, several financial institutions are offering competitive introductory rates on Home Equity Lines of Credit (HELOCs). Below is an overview of current offers from four notable lenders:
1. Bank of America
Bank of America provides a special introductory variable Annual Percentage Rate (APR) for the first six months of a new HELOC. After this period, the rate transitions to a variable APR based on the prime rate plus a margin. As of March 3, 2025, the ongoing variable APR is 8.90%. Borrowers can also benefit from additional discounts, such as a 0.25% reduction for setting up automatic monthly payments from a Bank of America checking or savings account, and up to a 1.50% discount for initial withdrawals made at account opening. Companies like the RefiGuide can help you shop banks like BofA so you can lock the best HELOC interest rates online.
2. PNC Bank – PNC Bank offers an introductory 0.25% APR for the first six billing cycles on new HELOCs. Following this introductory period, the variable APR ranges from 6.93% to 14.60%, depending on the loan amount and borrower qualifications. These rates are effective as of March 12, 2025.
3. Golden 1 Credit Union – Golden 1 Credit Union is offering a fixed introductory rate of 4.99% APR for balances accrued within the first six billing cycles from the account opening date. This promotional rate is available for new applications received between December 16, 2024, and July 31, 2025. After the introductory period, the rate reverts to a variable APR as specified in the HELOC agreement. Notably, this offer is not available for investment properties or second homes. Golden CU
4. MidWestOne Bank – MidWestOne has special introductory rates available for a limited time on their HELOCs. While specific rate details are not disclosed, applications must be received by March 31, 2025, to qualify for these promotional rates. https://midwestone.bank
Understanding HELOC Introductory Rates
HELOCs typically feature variable interest rates tied to the prime rate, which can fluctuate over time. To attract borrowers, many lenders offer introductory rates—lower rates applicable for an initial period (commonly six months). After this period, the rate adjusts to the standard variable rate, calculated as the prime rate plus a predetermined margin. For instance, if the prime rate is 7.5% and a lender adds a margin of 1.45%, the resulting HELOC rate would be 8.95%.
Factors Influencing HELOC Rates
Several factors can affect the interest rates offered on HELOCs:
-
Credit Score: Borrowers with higher credit scores typically qualify for lower rates.
-
Loan-to-Value (LTV) Ratio: A lower LTV ratio, indicating more home equity relative to the loan amount, can result in more favorable rates.
-
Loan Amount: Some lenders offer better rates for higher loan amounts.
-
Automatic Payments: Setting up automatic payments from a linked bank account can lead to rate discounts.
As of March 2025, lenders like Bank of America, PNC Bank, Golden 1 Credit Union, and MidWestOne Bank are offering attractive introductory rates on HELOCs. Prospective borrowers should carefully review the terms, including the duration of the introductory rate, subsequent variable rates, and any associated fees. HEM can help you compare offers from multiple HELOC lenders at no cost. Our team will help you understand the factors influencing the best HELOC rates can help borrowers secure the most favorable terms for their financial needs.
What Has Better Rates a HELOC or Home Equity loan?
In many cases we see lower mortgage rates on HELOCs but the interest rates are adjustable and that means the HELOC rate and payment could rise if the market changes. The home equity loans have a fixed interest rate with a fixed monthly payment making it easier for budgeting purposes.
Today the home equity loan has a slightly lower interest rate than a HELOC but the home equity loan has a fixed interest rate, which is great when rates are rising. However, when rates are falling it may not be the best decision because you wouldn’t see a lower monthly payment from the Federal Reserve lowering interest rates.
If you are consolidating high interest debt or refinancing an adjustable rate personal loan, then securing fixed rate home equity loans may be the prudent choice. Remember that the home equity loan offers a lump sum upfront and the principal and interest payments occur each monthly. Before signing a HELOC agreement, check the home equity loan rates to see which payments are more affordable.
You can refinance current mortgage balance of HELOC into a fixed interest rate home equity loan with fixed monthly payments for the life of the loan.
So unlike the home equity loan with fixed monthly payments, the HELOC offers a draw period with interest only payments due for the first 120 or 180 months. After the draw period comes the repayment period in which principal and interest payments are required until the credit line is paid back
A HELOC line proves advantageous over a home equity loan if: You require a flexible credit line for managing variable expenses and wish to borrow and repay as needed. Additionally, if you seek a safety net for unforeseen emergencies while not requiring immediate cash, a HELOC is a pragmatic choice.
What Does a Home Equity Line Of Credit Do?
A HELOC is a second mortgage that is a line of credit similar to a credit card. The difference with a HELOC is the credit line is secured by your home and the equity you have built up. It’s a revolving line of credit that works like a credit card, and you can reuse the credit line when you repay it.
HELOCs are a good option in 2025 for homeowners who have at least 20% equity in their homes and want to pay for home repairs, paying down credit cards, or finance a college education.
More homeowners are turning to HELOCs in 2025 because they may have a lower first mortgage rate than they can get with a cash-out refinance. Many homeowners today have mortgages they took out in 2019, 2020, or 2021, when rates were sometimes 3% or lower. It doesn’t make sense to refinance your first mortgage from a 3% rate when current rates are about 6% (as of March2025).
As of this writing, the average rate for a HELOC for $30,000 is approximately 10%. For the most part at the end of 2024 and in 2025, rates have held in the 8% range. This is higher than homeowners are accustomed to, but remember: Higher interest rates from the Fed have caused credit card rates to soar, sometimes over 20%. A HELOC at 10% still represents a considerable interest savings over many other loan products.
Why Get A HELOC?
If you own a home and want to tap some of your equity, you may wonder why you should consider a HELOC over the other options, such as credit cards or personal loans:
• Credit card rates will stay elevated: The Fed has hiked rates 11 times since early 2022, which made credit card rates soar. The average credit card rate is over 21%, so you can imagine how much interest you will pay if you have thousands in credit card debt. The Fed doesn’t seem to want to increase rates as much in 2025, but we can assume that credit card rates will stay high for some time. A HELOC may have a rate that is half of your credit card, so it’s a good deal.
• Cash-out refi’s are often off the table: You may have a lower first mortgage rate than you can get in 2024 by refinancing. It may be more logical to keep your mortgage in place and get a HELOC instead.
• There may be a recession: If there is a recession this year, it’s possible you could lose your job or have hours cut. It may be better to get your HELOC approved before a recession hits. An economic slowdown also could impact your home’s value, which could decrease the money you can get with a HELOC.
The HELOC is one of the best loan deals on the market right now. Credit cards and personal loans have high rates, and cash-out refinances aren’t viable for many people with first mortgages below 5%. It could be years before you can get a refinanced first mortgage with a lower rate than you have now.
Selecting the ideal HELOC entails assessing the lender’s borrowing caps, repayment conditions, and, notably, the interest rates extended to you. Below, we explore some of the most competitive HELOC loan rates available in 2025 and offer guidance on securing the lowest APR for your forthcoming home equity line of credit.
What Are the HELOC Closing Costs?
Yes, the home equity loan revolving credit line still have closing costs that most borrowers roll into the loan. If you decide to pay closing costs and lending fees into the home equity line up front your annual percentage rate will be higher than the interest rate. When shopping for the best HELOC rate, always compare the annual percentage rate, origination fees. Also make sure there is no annual fee or early termination fee in case you want to pay interest quicker or refinance the HELOC into a fixed rate home equity loan. Some borrowers even pay off their HELOC debt in a cash out refinance when the draw period ends.
Can I Get a Great Rate on a HELOC with Low Credit Scores?
HEM can introduce you to trusted lenders that offer bad credit HELOC loans if you have a low credit score. You will need more equity and lower loan to value ratio to qualify but there are multiple lending sources that offer these type of home equity loans. The rate on low credit HELOCs are typically a few points higher and most companies will ask for increased closing costs to cover their risk. Credit history is very important to banks if you want to secure the best HELOC rate, you will need a credit score over 700.
Hot Tips for Comparing HELOC Rates
Like rates for everything, HELOC mortgage rates are higher than a few years ago. But HELOCs make sense for homeowners who want to access their equity at rates that are more affordable than the other options. Use the tips we mentioned above to find the best HELOC with the lowest rate. The Home Equity Mart will help you shop for the best HELOC lenders and rates and there is no cost or application fee whenever you work HEM. We will help you find experienced loan professionals that offer many HELOC options and programs that offer highly competitive rates.