HELOC Rates Remain Stable Under 8.75% Amid Fed Chairman Jerome Powell's 'Wait and See' Approach

As of July 21, 2025, the HELOC interest rate is stable at under 8.75%. Federal Reserve Chairman Jerome Powell remains cautious, but Fed Governor Christopher Waller has called for a rate cut at the July 30 meeting. This could lead to a slight easing of HELOC rates. The average APR for a 10-year draw HELOC is 8.72%, with a variable rate that kicks in after a six-month introductory APR of 6.49%. Homeowners can access home equity value with a use-it-as-you-need-it HELOC instead of selling their house. Lenders determine HELOC rates based on an index rate plus a margin, which can vary depending on credit score, debt, and credit line amount.

As of July 21, 2025, the interest rates for home equity loans (HELOCs) have remained stable, with the average APR for a 10-year draw HELOC standing at 8.72%. This rate includes a variable component that kicks in after a six-month introductory period, which is currently set at 6.49%. The Federal Reserve has been cautious, but recent comments from Fed Governor Christopher Waller have hinted at a potential rate cut at the July 30 meeting, which could lead to a slight easing of HELOC rates [1].

Home equity loans allow homeowners to borrow against the value of their home, providing them with a lump sum of cash. HELOCs, on the other hand, offer a line of credit that homeowners can draw from as needed, making it a flexible option for those with fluctuating financial needs. The interest rates for HELOCs are determined by an index rate plus a margin, which can vary depending on factors such as credit score, debt-to-income ratio, and the amount of the credit line [2].

In the latest survey by Bankrate, the average rate on 5- and 15-year home equity loans ticked up slightly, to 8.28% and 8.37% respectively, while the 10-year loan rate increased to 8.43% [1]. These rates are fixed and will remain unchanged regardless of market fluctuations, but they can be influenced by broader economic conditions and Federal Reserve policy.

For homeowners considering a home equity loan, it is essential to weigh the benefits against the costs. While these loans can provide access to additional funds, they also come with interest payments and potential risks. Homeowners should carefully consider their financial goals and the reasons for tapping into their home equity before making a decision [2].

References:
[1] https://www.bankrate.com/home-equity/home-equity-loan-rates/
[2] https://www.bankrate.com/home-equity/home-equity-loan-rates/