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Amid the high interest rates of recent years, there are few affordable borrowing options to choose from. Interest rates on personal loans, for example, have been frozen at around 12% for months while credit card interest rates have declined recently, but only from a recent record of 23%. Double-digit rates in both cases make borrowing particularly prohibitive at present, even with the possibility of interest rate reductions later in 2025.
However, a smart and efficient way to borrow is now easily available to homeowners through their home equity. With the average level of equity sitting comfortably with over $300,000 currently, borrowing with a home equity loan Or Home Equity Line of Credit (HELOC) makes sense. And with rates here significantly lower than most alternatives, and with those rates poised to fall alongside lower federal funds rates in the coming months, either could be the perfect way to borrow a large sum of money affordably.
Before getting started, homeowners should first familiarize themselves with current average HELOC and home equity loan rates, both of which change often based on market conditions.
Start the process by seeing how much home equity you could borrow here now.
What are the current HELOC and home equity loan interest rates?
As of October 9, 2025, here are the average interest rates for home equity loans, according to Bankrate:
- 5-year home equity loans: 8.15%
- 10-year home equity loans: 8.30%
- 15-year home equity loans: 8.20%
The average HELOC rate is now 7.84%, according to Bankrate. However, all of these rates are national averages and the offers you may receive will depend on location, lender, credit profile, etc. So take the time to shop around to find the lowest rates and the best conditions.
Start shopping for HELOCs and home equity loans online today.
What to know about borrowing with a HELOC and a home equity loan
HELOCs and home equity loans both use your equity as a source of financing, but the way they work differs. Home equity loans come with fixed interest rates and provide the owner with a lump sum of money for which repayments should be made immediately.
HELOCs, on the other hand, come with variable interest rates and provide the homeowner with a revolving line of credit using the home as a financing source. Payments will only need to be made on the amount of credit used, not the entire line of credit for which you have been approved. And, for a first drawing periodinterest-only payment will be required before the repayment period begins (usually after 10 or 15 years).
In addition to lower interest rates compared to alternative borrowing products, HELOCs and home equity loans have some attractive benefits. tax advantages. If the owner uses either product to IRS eligible home repairs and renovationsthey may have the option to deduct the interest they paid from their taxes for the year or years in which the proceeds were used. However, with the house acting as collateral and the possibility that it could be entered on If payments are not made as agreed, it is essential that homeowners choose the right product for their needs and budget.
The essentials
HELOC and home equity loan rates are currently lower than many alternative borrowing products, and they are poised to fall further if the Federal Reserve cuts rates again later this year. However, not all lenders offer the same rates and terms, and with your home as collateral, it’s essential to shop around to find the right product for your budget and financial goals.
