HELOC rates today, December 26, 2025: Rates may bottom out before the next Fed rate cut

Core Insights - The national average rate on home equity lines of credit (HELOC) has decreased in line with the prime rate, currently at 6.75%, with expectations for stabilization until the next Federal Reserve rate cut [1] - Home equity has reached a record high of nearly $36 trillion, indicating significant value tied up in residential properties [2] - The average weekly HELOC rate is reported at 7.44%, based on applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio of 70% [2] HELOC Interest Rates - HELOC interest rates are determined differently from mortgage rates, typically based on an index rate plus a margin, with the current prime rate at 6.75% [4] - Lenders have flexibility in pricing HELOCs, influenced by factors such as credit score and debt levels, making it advisable for borrowers to shop around for the best rates [5] - National HELOC rates may include introductory offers that last for a limited time before adjusting to a higher rate [6] Market Trends - With mortgage rates remaining low, homeowners are less likely to sell their homes, making HELOCs an attractive option for accessing home equity without refinancing [3] - Lenders are responding to the Federal Reserve's rate cuts by offering lower introductory rates, such as FourLeaf Credit Union's 5.99% APR for 12 months on HELOCs up to $500,000 [8] Borrowing Considerations - When considering a HELOC, borrowers should compare rates, fees, repayment terms, and minimum draw amounts to find the best deal [9] - A HELOC allows homeowners to access only the amount needed from their equity, avoiding interest on unused credit [9] - For homeowners with low primary mortgage rates and significant equity, now may be an optimal time to secure a HELOC for various uses, including home improvements or personal expenses [11] Payment Structure - For a $50,000 HELOC at a 7.50% interest rate, the monthly payment during the 10-year draw period would be approximately $313, with the understanding that rates are variable and payments may increase during the repayment period [12]