Home equity line of credit (HELOC) rates across major U.S. banks reached their lowest levels of 2025 on December 7, with average rates dipping to 6.8% for prime-qualified borrowers. The decline marks a significant shift in consumer borrowing costs, potentially spurring refinancing and home equity drawdowns ahead of year-end.
- Average HELOC rate reached 6.8% on December 7, 2025—the lowest of the year
- Rate drop of 0.9 percentage points from November 2025 and 1.7 points from June 2025 peak
- Major lenders across the U.S. reported reduced pricing to stimulate demand
- Lower rates increase competitiveness against personal loans and credit cards
- Potential surge in HELOC originations and refinancing activity in Q4 2025
- Borrowers with strong credit and high equity are best positioned to benefit
On December 7, 2025, home equity lines of credit (HELOCs) posted the lowest average rates of the year, with national averages falling to 6.8% for borrowers with strong credit profiles and substantial home equity. This represents a 0.9-percentage-point drop from the previous month and a 1.7-point decline from the 2025 peak in June. The move reflects broader easing in short-term funding costs and reduced risk premiums in the mortgage-backed securities market. The decline is particularly notable given the Federal Reserve’s extended pause on rate cuts, which had previously constrained downward pressure on consumer credit products. However, improved liquidity conditions and decreased volatility in secondary markets have allowed major financial institutions, including regional banks and national lenders, to lower HELOC pricing to attract borrowers. This shift has made HELOCs more competitive relative to personal loans and credit card debt, with many borrowers now seeing rates below 7% for the first time since early 2024. The impact could be felt across multiple segments of the housing finance ecosystem. For homeowners with significant equity, the lower rates may encourage increased withdrawals for home improvements, debt consolidation, or education expenses. Lenders are likely to see a rise in new HELOC originations and refinancing activity, especially among those who had previously deferred borrowing due to higher costs. This dynamic could also influence mortgage lenders, as HELOC usage often precedes or complements mortgage refinancing decisions. Financial institutions offering HELOCs are expected to see enhanced loan volumes and associated fee income in the final quarter of 2025. Meanwhile, borrowers with existing HELOCs may consider rate resets or balance transfers to lock in savings. The trend underscores the growing importance of timing in consumer credit strategy, particularly as year-end financial planning accelerates.