HELOC rates increased slightly after Powell's comments, but still lower than primary mortgage rates.

From Yahoo Finance: 2025-07-02 06:00:00

HELOC interest rates rose slightly today after Federal Reserve Chairman Jerome Powell spoke at a monetary policy event in Portugal. Powell remains cautious but did not rule out a rate cut in July. When the Fed cuts rates, prime rates typically follow, easing consumer pricing on financial products like credit cards and HELOCs. Zillow reports 10-year HELOC rates increased seven basis points to 6.62%, while VA-backed HELOCs rose one basis point to 6.14%. Home equity in houses increased to over $34 trillion, with owners hesitant to give up low-rate mortgages. Accessing home equity with a HELOC can be a good alternative. HELOC rates are lower than primary mortgage rates and are based on an index rate plus a margin. Lenders have flexibility with pricing, depending on credit score and debt amount. Average national HELOC rates can include introductory rates that adjust higher later. Homeowners can access home equity without giving up low-rate mortgages with a second mortgage like a HELOC. The best HELOC lenders offer low fees, fixed-rate options, and generous credit lines, allowing homeowners to use their equity as needed. FourLeaf Credit Union is offering a 6.49% HELOC rate for 12 months on lines up to $500,000. Rates vary between lenders, ranging from 7% to 18% based on creditworthiness and shopping diligence. For homeowners with low mortgage rates and equity, now is a good time to consider a HELOC for home improvements or other expenses. HELOC payments on a $50,000 line of credit may be around $395 per month with a variable interest rate beginning at 8.75%.

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