Amid recent changes, what's a good HELOC rate right now? Here's what experts say.

In an effort to curb inflation, the Federal Reserve has once again decided to keep the federal funds rate the same after its May meeting. As inflation and economic uncertainty persist, so do elevated interest rates. This has created a challenging borrowing environment for people who need extra funding. 

Credit cards, while convenient, now have interest rates above 20%. Personal loans, which offer flexibility, are closer to 12%. But homeowners have two affordable options to consider: home equity loans and home equity lines of credit (HELOCs). These home equity borrowing options typically have lower interest rates, which can make a meaningful difference over the course of repayment. 

HELOCs, in particular, have been attractive borrowing tools as they offer flexibility and lower rates than home equity loan interest rates. Despite this, borrowers who want to tap their home equity should research options to find the best interest rate possible. Scoring a good HELOC rate can reduce borrower costs by saving you money on interest. But first, you need a benchmark and to know what a good HELOC rate is right now. Considering that rates are down by more than two full percentage points since September 2024, it may not be so obvious what a good rate is right now. We spoke to home lending experts about what's considered a good HELOC rate in today's economic environment. 

See what HELOC rate you could qualify for here now.

What's a good HELOC rate right now?

HELOC borrowing provides a flexible structure, with a draw period and a repayment period. Recently, HELOC rates have fallen to a two-year low, providing an attractive alternative to more expensive borrowing options. Here we take a look at what a good HELOC rate is and what factors come into play when qualifying for a competitive rate:

A good HELOC rate is around 8%

HELOC interest rates typically follow the direction of the Federal Reserve's federal funds rate, among other factors. Based on that, what's a good HELOC rate right now, in mid-May 2025? 

"It's going to depend on credit…I think that the first thing to look at is the prime rate. And the prime rate right now is 7.5%. I would say with a good credit profile, you're probably looking at around 8%," says Rose Krieger, senior home loan officer at Churchill Mortgage.

Nadia Evangelou, senior economist and director of real estate research at the National Association of Realtors, says, "As of now, May 2025, the competitive HELOC rate is typically in the range of 7.5 to 8%."

Explore your HELOC rate offers online here.

Many factors play into your HELOC rate 

HELOC lenders review many different factors as part of the underwriting process and to assess risk. As a whole, these factors influence the HELOC interest rates you qualify for and what might be a "good" rate for you. 

"It's going to depend on credit, the amount of equity that you're taking out, the amount of equity you're going to have left in your home, that percentage, we call it the loan-to-value," says Krieger. "You're going to have to have a debt-to-income ratio within the parameters of the company and so that could be 50%, that could be maybe 43%. It just depends on the company."

To qualify for a good HELOC rate at around 8% or just shy of it, you'll need to meet specific eligibility requirements. 

"From my experience, the 'best' rate depends on your financial profile. If you've got a credit score above 740, a solid income, and plenty of home equity, you might even see offers closer to the prime rate with a small margin added, especially if you're an existing customer at a bank offering discounts," says Steven Glick, director of mortgage sales at HomeAbroad, a real estate investment fintech company.

Shop around for HELOC rates  

The rock-bottom interest rates from several years ago have long been gone, leading to a high-rate environment, but you can still find something affordable by doing some research and shopping around. "Today's rates are nearly twice as high as they were just a few years ago in 2022," says Evangelou. "It's better than the past year…But with rates still elevated, it's more important than ever to compare lenders and look for the most competitive terms available."

HELOC interest rates have luckily been falling over the past year. As a variable-rate product with interest rates that change periodically, this is good news for prospective borrowers. While there were major changes toward the end of last year, currently we're in bit of a holding pattern until future rate cuts. 

"The Fed's three cuts in 2024 lowered rates, but with fewer cuts expected in 2025, big drops aren't likely. Lender competition and local markets also play a role, so shopping around is a must," says Glick. 

The bottom line 

In the current high-rate environment, borrowers looking for affordable financing may have trouble as the Federal Reserve keeps rates elevated. Rates across the board aren't historically low like we saw several years ago. But HELOC interest rates, comparatively speaking, have dipped in the past year and are lower than many other borrowing options. 

"From a cost of borrowing perspective, HELOCS are still a relatively efficient way to access funds," says Evangelou. To avoid putting your home at risk, ensure you're clear on why you're borrowing and how you'll repay it. Looking at various home lenders and options can help you qualify for a good HELOC rate based on your situation.