HELOC Rates Remain Steady at 9% Amid National Holiday and New Month.

As of September 1, 2025, the average HELOC interest rate is 9%, with rates ranging from 8.05% to 9.59% APR. The largest HELOC lender, Bank of America, offers a 10-year draw HELOC with an average APR of 8.72%. Homeowners can access their home equity through a HELOC, which can be a good alternative to selling their house. HELOC interest rates are determined by an index rate plus a margin, and lenders have flexibility with pricing, so it pays to shop around.

As of September 1, 2025, the average HELOC (Home Equity Line of Credit) interest rate stands at 9%, with rates ranging from 8.05% to 9.59% APR. The largest HELOC lender, Bank of America, offers a 10-year draw HELOC with an average APR of 8.72%. Homeowners can access their home equity through a HELOC, which can be a good alternative to selling their house. HELOC interest rates are determined by an index rate plus a margin, and lenders have flexibility with pricing, so it pays to shop around.

The trajectory of HELOC rates for fall 2025 is expected to be influenced by the Federal Reserve's decisions on the federal funds rate. According to experts, if the Federal Reserve announces a rate cut, HELOC rates could decline slightly. As of August 27, the CME Group's FedWatch tool shows an 88% chance of a rate cut at the September meeting [1].

Experts predict that the decrease in rates might not be extreme, with a potential reduction of around 0.25% to 0.75% by year-end. However, the actual decrease will depend on various factors, including inflation, the labor market, bond market sentiment, and overall economic momentum [1].

In addition to the Federal Reserve's influence, local housing market conditions also play a role in determining HELOC rates. If home values in a particular area decrease, it could reduce the amount available for HELOCs and home equity loans, making these products riskier for lenders. Conversely, strong home prices can increase borrowing capacity and make lenders more competitive on rates [1].

Homeowners seeking to secure a HELOC should consider several strategies to improve their chances of getting a lower rate. Enhancing their credit score, paying down credit cards, and holding off on opening new accounts before applying can all help. Additionally, leaving some equity in the home can lower the risk for lenders, potentially resulting in a lower rate [1].

Furthermore, homeowners should shop around for the best rates and not hesitate to negotiate with lenders. Rates can differ significantly between lenders, with differences of up to a full percentage point possible [1].

In summary, while HELOC rates are expected to decline slightly in the coming months, the actual decrease will depend on various factors. Homeowners can take proactive steps to improve their chances of securing a lower rate, such as enhancing their credit score, leaving some equity in the home, and shopping around for the best rates.

References:
[1] https://www.cbsnews.com/news/home-equity-loan-rate-forecast-for-fall-2025/