Current HELOC & Home Equity Loan Rates: July 2, 2024—Rates Are Mixed (2024)

FAQs

What will HELOC rates be in 2024? ›

The current average HELOC interest rate is 9.26 percent. To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets.

HELOC rates vs home equity loan rates

HELOC rates are typically variable and often start lower than the best home equity loan rates. However, home equity loans usually offer a fixed interest rate, providing predictable payments.

You borrow a specific amount, which is provided as a one-time cash payout at closing, and then you make regular payments during a fixed repayment period. With a home equity loan, you apply for the amount you need. Most charge a fixed interest rate that doesn't change during the life of the loan.

The general consensus is that home equity rates on both home equity loans and HELOCs are going to drop in fall 2024, as are mortgage rates across the board. Ultimately, though, it comes down to the Fed's plans for rate cuts.

Whether you should get a HELOC now, with rising interest rates, depends on your circumstances. Interest rates are rising on all products, so if your only option is a credit card or personal loan (which usually have much higher rates), then a HELOC may be your best bet.

Assuming a borrower who has spent up to their HELOC credit limit, the monthly payment on a $50,000 HELOC at today's rates would be about $403 for an interest-only payment, or $472 for a principle-and-interest payment.

That noted, here's how much a $100,000 HELOC would cost per month if taken now, pegged to two different repayment periods: 10-year HELOC at 9.18%: $1,276.52 monthly for a total of $53,182.28 in interest paid. 15-year HELOC at 9.18%: $1,025.00 monthly for a total of $84,500.41 in interest paid.

If interest rates have fallen or your credit score or income has improved since you opened the HELOC, you can reduce your rate by refinancing (especially if you can get a special introductory rate). This will help you save on the amount of interest you pay overall.

What are the cons of a HELOC? ›

“HELOC rates are almost always substantially higher than first mortgage and cash-out refinance rates because they are far riskier,” Gordon says. “If you go into default, that first lien is well protected.

As of September 19, 2024, the variable rate for Home Equity Lines of Credit ranged from 8.45% APR to 12.10% APR. Rates may vary due to a change in the Prime Rate, a credit limit below $50,000, a loan-to-value (LTV) above 60% and/or a credit score less than 730.

Watch out for balloon payments: If you don't manage your HELOC monthly payments properly, you could be hit with a large “balloon payment” at the end of your repayment period. This large payment can trap you in a cycle of debt if you can't pay it off or, worse, could result in losing your home.

Based on our research, our top home equity loan lenders are Navy Federal, U.S. Bank and TD Bank due to their high max LTVs, competitive rates (as low as 7.29%) and accessible debt-to-income requirements.

Yes, mortgage rates are likely to go down in 2025. Average 30-year mortgage rates are currently below 6%, and they may fall further into the 5% range next year.

By the end of 2024, interest rates will fall nearly another half of a percentage point from their current level of between 4.75% and 5%, according to FOMC projections. Interest rates will drop another percentage point over the course of 2025, the projections indicated.

Often, the highest a HELOC rate can go is 18%. Check your loan paperwork. Some lenders may allow for higher rates. Many HELOCs set a lifetime rate cap and a maximum increase at each adjustment.

Our strategists believe that there will likely be two additional rate cuts in 2024, and expect the cuts to continue into 2025. This cut in policy rates should help support labor markets from slowing too quickly.