The national average rate on a home equity line of credit is nearing 7%, dropping with each of the Federal Reserve’s three rate cuts this year. Homeowners have a record $36 trillion in home equity. Second mortgage rates are based on index rates like the prime rate, offering flexibility for lenders.

Introductory offers on HELOCs can lead to higher adjustable rates after the initial period. Keeping a low-rate primary mortgage while accessing home equity through a second mortgage like a HELOC is a smart move. The best HELOC lenders offer low fees and flexible credit lines for easy access to your home equity.

Lenders are offering lower adjustable and introductory rates following the Fed’s lower-rate policy. When shopping for lenders, compare rates, fees, repayment terms, and minimum draw amounts. With a HELOC, you only pay interest on what you borrow, leaving the rest of your credit line available for future needs.

HELOC rates can vary significantly, from 6% to 18%, depending on your creditworthiness and shopping diligence. For homeowners with low primary mortgage rates and significant home equity, now is an opportune time to take out a HELOC. Access cash for home improvements, repairs, or even fun expenses, but be disciplined in prompt repayment.

Withdraw the full $50,000 from a HELOC with a 7.50% interest rate, and your monthly payment during the 10-year draw period would be around $313. Remember that rates are variable, so payments can increase over the 20-year repayment period. HELOCs are best suited for shorter-term borrowing and repayment.

Read more at Yahoo Finance: Rates move lower, reflecting three Fed rate cuts this year