From Yahoo Finance: 2025-06-04 06:00:00

HELOC interest rates have dropped, sparking more interest in home equity lines of credit. A recent study showed 48 million mortgage holders have tappable equity, averaging $212,000 per homeowner. Today, Zillow reports rates on 10-year HELOCs at 6.79%, with VA-backed HELOCs at 6.35%. Homeowners hold over $34 trillion in home equity, the third-highest on record.

Second mortgage rates like HELOCs are based on an index rate plus a margin. While the prime rate is 7.50%, lenders can offer lower rates based on factors like credit score and debt amount. National HELOC rates may include introductory rates that adjust higher after the initial period.

Accessing home equity with a HELOC allows homeowners to keep their low-rate primary mortgage. The best HELOC lenders offer low fees, fixed-rate options, and flexible credit lines. Borrow what you need, pay it back, and continue to build wealth with your primary mortgage.

FourLeaf Credit Union is offering a 6.49% introductory rate on HELOCs up to $500,000 for 12 months. Shopping for a HELOC requires comparing rates, fees, repayment terms, and minimum draw amounts. The power of a HELOC lies in using only what you need and leaving the rest of the line of credit available for future use.

HELOC rates can vary significantly from lender to lender, ranging from nearly 7% to 18%. For homeowners with low primary mortgage rates and home equity, now is a good time to consider a HELOC for renovations, repairs, or other expenses. It’s crucial to pay off the borrowed amount promptly to avoid long-term debt.

Taking out a $50,000 line of credit on a $400,000 home could result in a $395 monthly payment with a variable interest rate starting at 8.75%. HELOCs typically have a 10-year draw period and a 20-year repayment period, effectively becoming a 30-year loan. It’s best to borrow and repay the balance within a shorter timeframe.



Read more at Yahoo Finance: Interest rates are lower today, further spurring demand