Here's when HELOC interest rates could fall again
Homeowners who borrowed a portion of their home equity via a home equity line of credit (HELOC) have had welcome news in the opening months of 2025. Not only did interest rates on the line of credit fall multiple times, but they fell substantially, to 18-month and two-year lows, respectively. Hovering around 10% just last September, HELOC interest rates are now around 8%, offering homeowners a cheap and effective way to borrow a large sum of money right now.
Still, borrowing from your home equity comes with risks that other, unsecured loan options don't come with. So the interest rate here is key as failure to make payments could result in the home being foreclosed on. However, the interest rate on a HELOC is variable and subject to change each month. That's a positive when HELOC rates are steadily declining, as they have been for much of 2025, but it could be a detriment when they rise again (as they did slightly last week).
Understanding this dynamic, then, current HELOC borrowers and those considering the line of credit may be wondering when HELOC interest rates could fall again. Below, we'll detail three upcoming dates on the calendar when that could happen.
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Here's when HELOC interest rates could fall again
While predicting the future of interest rates is impossible to do with precision, if recent history is any indicator, HELOC interest rates could decline again around one or more of the following three dates:
Friday, May 2, 2025: The next unemployment report will be released on the first Friday of May by the Bureau of Labor Statistics. Now at 4.2%, the rate rose slightly in March from February's 4.1%, although 228,000 jobs were added in the month.
How would unemployment impact HELOC rates? It may not be a direct effect, but changes here could reverberate throughout the economy. If unemployment worsened in April, it could encourage the Federal Reserve to cut interest rates again, perhaps as soon as their May meeting. That would cause HELOC rates to decline. If unemployment remains static, however, rates could stay around where they are now. Either way, it's important to remember that HELOC rates change daily and lenders can adjust their offers to borrowers based on market conditions, unemployment readings included, even absent a formal Fed action.
Compare your current HELOC rate offers online today.
Wednesday, May 7, 2025: Millions of Americans will be paying attention on this date, the day on which the Federal Reserve concludes its next two-day monetary policy meeting. The bank cut rates multiple times in the final months of 2024 but has kept them paused in its January and March 2025 meetings. There's a chance (albeit a small one) that they could resume their rate-cut campaign here again, causing HELOC interest rates to drop again in response. But even absent a formal cut, should Federal Reserve chairman Jerome Powell hint at additional rate cuts to come (perhaps when the bank meets again in June), HELOC interest rates are still likely to fall. So pay close attention to what does and doesn't happen on this date, particularly if you're a new borrower looking to secure the lowest HELOC interest rate available.
Tuesday, May 13, 2025: Inflation fell in February and again in March. Did it continue that trend in April? That's what Americans will discover on this date when the latest inflation reading is released. Consistent progress here could clear the way for the Fed to continue cutting rates when it meets again on June 17 and June 18 – and HELOC lenders could start cutting their rate offers before that even happens. The April inflation rate reading will be released on the morning of May 13, so expect its impact to be felt in the rate environment as early as the afternoon.
The bottom line
The decline in HELOC interest rates that borrowers have benefited from in the opening months of 2025 appears likely to continue into the second quarter of the year. With factors such as the unemployment rate, the inflation rate and the Fed's monetary policy all poised to adjust in the weeks ahead, HELOC interest rates could easily be impacted, perhaps before all of these data points have been determined. So if you know you need the money and want to pay as little as possible to secure it, now may be a smart time to start shopping for a HELOC.
