HELOC Rates Under 8.75%: Fees and Introductory Rates to Consider

As of August 13, 2025, the average APR on a 10-year draw HELOC is 8.72%, with a 6.49% introductory rate. Homeowners can access some of their home equity with a HELOC, which is an alternative to selling their primary mortgage. Lenders determine HELOC interest rates based on an index rate plus a margin, and rates can vary depending on credit score, debt, and credit line amount. Fees, such as application, origination, and appraisal fees, can be just as important as interest rates when shopping for a HELOC.

As of August 13, 2025, the average annual percentage rate (APR) on a 10-year draw home equity line of credit (HELOC) is 8.72%, with a 6.49% introductory rate. Homeowners can leverage this financial tool to access some of their home equity, serving as an alternative to selling their primary mortgage. HELOC interest rates are determined by an index rate plus a margin, with rates varying based on factors such as credit score, debt, and credit line amount.

According to Bank of America, the largest HELOC lender in the country, the average APR on a 10-year draw HELOC is 8.72% [1]. This rate is variable and kicks in after a six-month introductory period, which is currently 6.49% in most parts of the country [1]. Homeowners with low primary mortgage rates and substantial equity in their homes may find HELOCs particularly beneficial.

HELOC interest rates are different from primary mortgage rates. Second mortgage rates are based on an index rate plus a margin, with the index often being the prime rate, currently at 7.50% [1]. For example, if a lender added 1% as a margin, the HELOC rate would be 8.50%. Lenders have flexibility with pricing on second mortgage products, so it is essential to shop around for the best terms.

When considering a HELOC, homeowners should be aware of both the introductory rate and the variable rate that follows. Introductory rates can last for six months or longer, but after this period, the interest rate becomes adjustable and is likely to be substantially higher. It is crucial to compare fees, repayment terms, and the minimum draw amount when shopping for a HELOC. The draw is the amount of money a lender requires you to initially take from your equity.

FourLeaf Credit Union is currently offering a HELOC rate of 6.49% for 12 months on lines up to $500,000 [1]. This introductory rate will convert to a variable rate later. Homeowners should be mindful of the total cost of a HELOC, including fees such as application, origination, and appraisal fees, which can be just as important as interest rates.

In conclusion, HELOCs can be a valuable financial tool for homeowners with low primary mortgage rates and significant equity in their homes. However, it is essential to carefully consider the introductory rate, variable rate, fees, and repayment terms when evaluating a HELOC. Homeowners should shop around with multiple lenders to find the best terms and ensure they understand the full cost of the loan.

References:
[1] https://finance.yahoo.com/personal-finance/mortgages/article/heloc-rates-today-monday-august-11-2025-100034015.html
[2] https://finance.yahoo.com/personal-finance/mortgages/article/heloc-rates-today-friday-august-8-2025-100024038.html