Falling HELOC rates offer homeowners cheaper borrowing options

Home equity line of credit (HELOC) interest rates have decreased again, now averaging 8.14%, making them a cheaper borrowing option. This drop follows a brief increase earlier in May. The decline in HELOC rates makes them more affordable than home equity loans and significantly cheaper than personal loans and credit cards. Homeowners should consider potential rate fluctuations and long-term affordability before applying. Homeowners should also consider refinancing into a home equity loan with a fixed rate if variable HELOC rates become too stressful. HELOC rates have fallen by approximately two percentage points since September 2024.