HELOC rates today, October 5, 2025: The versatile line of credit rate keeps getting better

Core Insights - The average HELOC interest rate in the U.S. is currently just under 8.5%, with Bank of America reporting an average APR of 8.47% for a 10-year draw HELOC, which is a variable rate after an introductory period of 5.99% lasting six months [1][3]. Group 1: Market Overview - Homeowners have over $34 trillion in home equity as of the end of 2024, marking the third-largest amount on record, which indicates significant potential for HELOC utilization [2]. - With mortgage rates above 6%, homeowners are likely to retain their low-rate primary mortgages, making HELOCs an attractive alternative for accessing home equity without refinancing [2][10]. Group 2: HELOC Mechanics - HELOC interest rates are determined by an index rate plus a margin, often based on the prime rate, which is currently 7.25%. For example, a lender adding a 1% margin would result in a HELOC rate of 8.25% [3]. - Lenders have flexibility in pricing HELOCs, and rates can vary significantly based on credit scores, existing debt, and the ratio of credit line to home value [4]. - The structure of HELOCs allows homeowners to borrow as needed, only paying interest on the amount drawn, which provides financial flexibility [8]. Group 3: Current Offers and Considerations - LendingTree is currently offering HELOC rates as low as 6.38% for a $150,000 credit line, although this is likely an introductory rate that will adjust later [7]. - Homeowners can benefit from maintaining their low-rate primary mortgage while accessing funds for home improvements or other expenses through a HELOC, making it a favorable time to consider this option [10]. - For a $50,000 HELOC on a $400,000 home, the estimated monthly payment could be around $384, with a variable interest rate starting at 8.49%, highlighting the importance of understanding repayment terms [11].