The national average rate for home equity lines of credit (HELOC) is at a new low, down three basis points from last month. Average HELOC rates are lower than home equity loan rates, but HELOC rates are variable, while home equity loan rates are fixed.

The average HELOC rate is 7.25%, down 19 basis points, while the national average rate for a home equity loan is 7.56%. Both rates are based on applicants with a minimum credit score of 780 and a CLTV of less than 70%.

Homeowners have nearly $36 trillion in home equity, the highest on record. With mortgage rates remaining low, accessing home equity through a HELOC or home equity loan can be a good alternative to selling or refinancing.

Lenders have flexibility with pricing on second mortgage products like HELOCs or home equity loans, based on credit score, debt amount, and credit line size. Rates are based on an index rate plus a margin, with HELOC rates currently around 7.50%.

FourLeaf Credit Union is offering a HELOC APR of 5.99% for 12 months on lines up to $500,000. Lenders are adjusting rates following the Federal Reserve’s rate cuts.

When shopping for lenders, compare rates, fees, repayment terms, and minimum draw amounts. The best home equity loan lenders offer fixed rates for the duration of the loan, eliminating the need to worry about rate changes.

Interest rates for HELOCs and home equity loans vary, from 6% to 18%. Rates are influenced by creditworthiness and shopping diligence. The national average rate for a HELOC is 7.25%, and for a home equity loan it’s 7.56%.

Interest rates on second mortgages are expected to keep falling in 2025. It’s a good time to get a HELOC or home equity loan for cash needs like home improvements.

Using a HELOC for $50,000 at 7.50% interest would result in a $313 monthly payment during the 10-year draw period. Payments may increase during the 20-year repayment period, making a HELOC essentially a 30-year loan.

Read more at Yahoo Finance: Rates are lower are on HELOCs