HELOC rates stay under 9% as lenders roll out low-introductory offers

The average interest rate on a home equity line of credit (HELOC) remains below 9%, and several lenders are promoting short-term introductory rates that start near 4%. These offers give homeowners a way to tap equity without refinancing their primary mortgage, which typically carries a lower fixed rate locked in before 2022.

Average pricing and promotional deals

Bank of America, the largest HELOC lender in the United States, lists an average annual percentage rate (APR) of 8.72% on a 10-year draw HELOC. The bank’s product begins with a six-month introductory APR of 6.49% in most states before converting to a variable rate. Similar structures are common across the industry, with promotional pricing lasting six to twelve months before adjusting to a higher rate tied to an index.

LendingTree is currently advertising a rate as low as 6.75% for a $150,000 credit line. While attractive, the figure is also likely an introductory offer that converts to an adjustable rate once the initial term expires. Promotional rates elsewhere range between 3.99% and 5.99%, typically limited to borrowers with strong credit profiles and low debt-to-income ratios.

Surging home equity supports demand

Homeowners collectively held more than $34 trillion in equity at the end of 2024, the third-highest level on record, according to data from the Federal Reserve. With 30-year fixed mortgage rates persisting above 6%, many owners prefer not to sell or refinance and risk losing the 3%–5% rates obtained earlier in the decade. A HELOC allows them to preserve that low first-lien rate while accessing funds for renovations, education costs or other expenses.

How lenders set HELOC rates

Unlike primary mortgages, HELOCs are second-lien products priced as an index plus a margin. The most common benchmark is the prime rate, currently 7.50%. A margin of 1 percentage point would place the borrower’s rate at 8.50%. Margins vary widely because lenders evaluate credit score, outstanding debt, loan-to-value ratio and requested line size when assigning pricing.

Rate dispersion is significant: published offers span roughly 7% to 18%. Introductory periods add another variable, and borrowers should verify the fully indexed rate that applies once the promotional window closes.

Key factors to compare

Pricing is only one element of a HELOC. Consumers should also review upfront fees, mandatory minimum draws, repayment terms and whether a fixed-rate conversion option is available. For example, drawing the full $50,000 on a $400,000 home at an initial variable rate of 8.75% would create an estimated monthly payment of about $395 during the repayment period. A typical product offers a 10-year draw followed by a 20-year repayment schedule, effectively creating a 30-year obligation if the balance is not repaid sooner.

Because lenders have flexibility in pricing second mortgages, comparison shopping remains the most effective way to secure favorable terms. Borrowers with high credit scores and low existing debt generally receive the strongest offers and may also qualify for reduced or waived fees.

Borrow responsibly

Financial advisers note that a HELOC works best when used for projects that add long-term value—such as essential repairs or energy-efficient upgrades—and when the balance is repaid quickly. Using the line for discretionary purchases can extend costly interest payments over decades if not managed carefully.

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