Equity rates for homes experiencing decline as anticipation of a possible September rate cut by the Federal Reserve increases
Home Equity Loans and HELOCs: Rates and Trends for August 2025
Homeowners considering tapping into their home equity may find attractive rates in the current market, according to recent data.
Current Home Equity Loan and HELOC Rates
The current home equity loan and HELOC (home equity line of credit) rates in August 2025 generally range between about 7% and 10%, with averages around 8% to 8.3% depending on loan type and borrower specifics.
Key Factors Driving Current Home Equity Rates
Several factors influence these rates, including credit score, the Federal Reserve's interest rate policy, rising home values, loan terms, and amounts. Higher credit scores typically secure lower rates, while the Fed's interest rate decisions impact variable-rate products like HELOCs. The strong homeowner equity from rising home prices also plays a significant role.
Comparison to Other Types of Credit
Home equity loans and HELOCs usually have lower rates than unsecured personal loans but are currently higher than typical fixed mortgages due to elevated mortgage rates.
| Credit Type | Typical Rate Range (Aug 2025) | Characteristics | |------------------------|-------------------------------|---------------------------------------| | Home Equity Loan | ~7% to 10% (avg ~8%) | Fixed rates, fixed payments, secured by home equity | | HELOC | ~8.2% avg, variable rates | Revolving credit line, variable rates, secured by home equity | | Traditional Mortgage | ~7% APR fixed | Larger amounts, longer terms, fixed or variable rates | | Unsecured Personal Loan | Usually higher than home equity loans, often 10%+ | No collateral, higher risk and rates |
Trends in Home Equity Borrowing
Home equity borrowing has become increasingly popular, with more than 47% of mortgaged residential properties being equity-rich in Q2 2025. Home equity borrower usage for home renovations represents 46% of loan volume, while debt consolidation accounts for 39%.
Data Sources
The data for home equity loan and HELOC rates is obtained from the 10 largest banks and thrifts in 10 large U.S. markets, as part of a national survey conducted by our website.com. This survey has been conducted in the same manner for over 30 years, providing an accurate national apples-to-apples comparison. The survey is conducted weekly.
Note
The individual offer you receive on a particular HELOC or new home equity loan will reflect additional factors like your creditworthiness and financials. Lenders generally limit all home loans to a maximum of 80 to 85% of a home's worth.
Sources
[1] CME FedWatch forecasts a near 100% likelihood of a rate cut at the Sept. 16-17 meeting. [2] The average rate on a $30,000 home equity line of credit (HELOC) has decreased one basis point to 8.12%. [3] The average rate on a $30,000 home equity loan has dropped two basis points to 8.23%. [4] HELOC balances rose in Q2 2025 for the 13th consecutive quarter, reaching $411 billion. [5] Greg McBride, the Chief Financial Analyst, predicts that home equity rates will decline in 2025, with HELOCs averaging 7.25% and home equity loans coming in at 7.90%. [6] Home equity has risen 142% nationwide since 2020, according to a new study on states with the most and least home equity gains (our website study). [7] The our website.com national survey obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. [8] Home equity borrower usage for home renovations represents 46% of loan volume. [9] The average rate for credit cards is 20.13%. [10] Debt consolidation represents 39% of home equity loan volume. [11] The individual offer you receive on a particular HELOC or new home equity loan reflects additional factors like your creditworthiness and financials. [12] The average rate on a home equity loan is currently over 8%. [13] Lenders generally limit all home loans to a maximum of 80 to 85% of a home's worth. [14] The our website.com national survey has been conducted in the same manner for over 30 years, providing an accurate national apples-to-apples comparison. [15] The our website.com national survey of large lenders is conducted weekly.
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