HELOC Rates Drop Ahead of Holiday Spending Surge on December 15, 2025

On December 15, 2025, national average HELOC rates declined to 7.8%, marking a 0.4-percentage-point drop from the previous month and the lowest level since June 2025. This reduction comes as consumers prepare for peak holiday spending, with the average HELOC borrowing limit now standing at $84,000, up from $81,500 in November. The drop follows a broader trend in consumer credit markets, where refinancing activity and variable-rate product adjustments have contributed to improved terms for borrowers with strong equity positions. The decline in rates is attributed to a moderation in the Federal Reserve’s policy rate expectations, which stabilized after several months of upward pressure. As of December 15, the federal funds rate target range remained at 5.25%–5.50%, but market indicators suggest a higher probability of a rate cut by mid-2026. This shift has encouraged large banks and regional lenders, including Wells Fargo, Chase, and U.S. Bank, to adjust HELOC pricing to remain competitive. Consumers seeking to fund holiday gifts, travel, or home improvements are benefiting from this environment. Borrowers with a loan-to-value ratio below 75% are now qualifying for rates as low as 7.2%, while those with prime credit scores (740+) may access promotional offers of 6.9% for the first 12 months. These terms are particularly attractive given that the average annual percentage rate (APR) for new HELOCs has remained above 8% for most of 2025. The shift in HELOC pricing is expected to drive a 17% increase in new applications compared to the same period last year, according to internal lending data. Homeowners in states with high property values—California, New York, and Washington—are leading this surge, with average HELOC draws increasing by 22% in November and December combined.