HELOC rates spiked at the start of the year, with a $30,000 line jumping to 8.22%. Meanwhile, a five-year home equity loan dropped slightly to 7.97%. Borrowers should carefully consider if tapping into home equity is the right move for their financial situation, advises a certified financial planner. Rates are driven by Federal Reserve policy and inflation expectations, with the Fed cutting rates three times in 2025. Forecasts suggest rates may continue to drop in 2026 if projected rate cuts are implemented. HELOCs and home equity loans are less expensive than credit cards or personal loans due to the collateral of the home. Individual rates for HELOCs and home equity loans vary based on factors like creditworthiness and home value.

Read more at Yahoo Finance: HELOCs soar above 8% to start year; home equity loans drop modestly