HELOC rates today, December 28, 2025: The equity-tapping advantage of 2026

Core Insights - The national average home equity line of credit (HELOC) interest rates are projected to start 2026 at their lowest in over three years, providing a significant advantage for homeowners looking to access home equity [1] - As of December 28, 2025, the average monthly HELOC rate is 7.44%, applicable to borrowers with a minimum credit score of 780 and a maximum combined loan-to-value ratio of 70% [2] - The Federal Reserve estimates that U.S. homeowners have approximately $36 trillion in equity locked in their homes, indicating a substantial opportunity for homeowners to utilize HELOCs to access this equity [3] HELOC Rate Dynamics - HELOC rates differ from primary mortgage rates, being based on an index rate plus a margin, with the current prime rate at 6.75% [4] - Lenders have flexibility in pricing HELOCs, and rates can vary significantly based on credit score, debt levels, and the credit line relative to home value [5] - Introductory rates for HELOCs may be significantly lower than market rates but typically adjust after an initial period, often leading to higher rates [5][8] Benefits and Usage of HELOCs - Homeowners can maintain their low-rate primary mortgage while accessing home equity through a HELOC, allowing for flexible borrowing and repayment [6][7] - The ability to draw only what is needed from a HELOC means homeowners do not incur interest on unused credit, making it a cost-effective option [9] - HELOCs can be used for various purposes, including home improvements and personal expenses, but caution is advised regarding long-term debt [12] 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 payments increasing during the repayment period due to variable rates [13]