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It is rare to have a solid source of borrowing And a low interest rate to use at the same time.
But that’s exactly what home equity to which borrowers have become accustomed in recent years. Home Equity Levels has reached an all-time high heading into the third quarter of 2025, according to a recent report. Currently, the average homeowner owns approximately $300,000 in equity to borrow.
At the same time, home equity loan rate are cheaper than what can typically be obtained with a credit card or personal loan. And they are poised to become even more affordable now that the Federal Reserve has resumed the interest rate reduction campaign it began in 2024. The Fed already cut rates in September and more highly anticipated when the Fed meets again in October and December, a home equity loan could soon become even more affordable than it already is.
However, your house serving as collateral in these exchanges and the risk of seizure If you are unable to make repayments, it is important to calculate your costs in advance. And that starts with knowing what a “good” home equity loan rate is today, after the Fed cut rates again. Below, we’ll detail what potential home equity borrowers need to know.
Start by seeing how much home equity you could borrow here.
What is a good home equity interest rate now that the Fed is cutting rates again?
Average home equity loan rates vary depending on the repayment term. Here’s what they look like now, according to Bankrate:
- 5-year home equity loans: 8.21%
- 10-year home equity loans: 8.36%
- 15-year home equity loans: 8.24%
So if you can find a home equity loan with a rate close to these, then you can consider it a “good one”. But if you have a good credit scoreimpeccable credit history and substantial amounts of equity to borrow against, you may be able to find an even better and lower rate.
Consider shopping around and evaluating offers from online and local banks to find the lowest rate that suits your needs. And remember this you don’t need to automatically use your current mortgage lenderso take the time to compare the offers. You can always go back to your original lender to see if they can beat the best deal you found.
Shop home equity loan rates online now.
Is a HELOC better than a home equity loan now?
Home Equity Lines of Credit (HELOC) providing homeowners interested in home equity borrowing an affordable alternative to home equity loans. Average HELOC rates are comfortably below 8% now, offering significant savings opportunities compared to the 8.20% range in which home equity loan rates currently sit. And, thanks to his variable rate that meets market conditions, a HELOC could soon become even more affordable once further rate reductions are issued.
At the same time, a variable rate can be inherently risky for borrowers, especially those tapping into home equity. Rates here can rise as easily as they can fall, so volatility will need to be budgeted for before obtaining the line of credit. If you can afford it moderately monthly rate changesHowever, this could be the cost-effective home equity loan alternative worth considering now.
The essentials
A “good” home equity loan rate this month, after the Fed cut rates, is considered to be 8.36% or lower, depending on the length of the repayment period. Remember, the rate you lock in now will be the one you keep until you repay the loan in full or unless you refinance. So take the time to shop around to find the lowest possible rate. Refinancing, after all, has its own benefits costs this will also need to be taken into account, but if you find a good rate now, you may be able to avoid this scenario altogether.
