Here’s how far HELOC rates have fallen in the last 18 months (and what to do now)

With multiple economic developments occurring in 2025, from changing domestic policies to drops in inflation and interest rates, homebuyers may have understandably missed an important revelation: home equity levels are at an all-time high. Homeowners started the third quarter of 2025 “with a record $17.8 trillion in total equity, including $11.6 trillion in tappable equity that can be accessed while maintaining a 20% cushion,” an August 2025 report stated. “Roughly 48 million mortgage holders had tappable equity, with the average homeowner holding $213,000 in accessible value.”

That not only means that your home’s worth has risen and your equitable position has improved, but it also illustrates an important point for those who need to borrow money, too. With the average home equity amount worth hundreds of thousands of dollars, this is now one of the most robust funding sources for borrowers. And with products ranging from home equity loans to cash-out refinances to home equity line of credit (HELOCs), there are plenty of ways in which to access that money. 

A HELOC, in particular, can be one of the better ways to borrow as it employs a variable interest rate that will change monthly based on market conditions. And with interest rates declining over the past year and with these rates likely to continue to fall later in 2026, this could be the way to both exploit today’s cooler rate climate while taking advantage of additional rate drops still ahead. To better appreciate the opportunity, however, it may help homeowners to learn how far HELOC rates have already fallen over the past 18 months (and what to do now that they have). That’s what we’ll break down below.

See how much home equity you could borrow with a HELOC here.

Here’s how far HELOC rates have fallen in the last 18 months

HELOC interest rates, compared to other borrowing products, have experienced one of the steepest declines since the Federal Reserve started its interest-rate cut campaign in the final months of 2024. While the Fed paused cuts for most of 2025, the central bank started cutting again in the last four months of the year and may resume reductions in the spring and summer of 2026. 

Here, then, is how average HELOC rates have evolved from early September 2024 (in the weeks before the Fed’s 50 basis point rate reduction) to early March 2026, according to Bankrate data:

• September 4, 2024: 9.99%
• December 4, 2024: 8.55%
• March 5, 2025: 8.06%
• June 4, 2025: 8.27%
• September 3, 2025: 8.90%
• December 3, 2025: 7.81%
• March 4, 2026: 7.18%

So, HELOC rates have declined by more than two and a half percentage points in the last 18 months. Unlike with a home equity loan, existing borrowers and prospective ones won’t have to worry about refinancing or the cost of refinancing as HELOC rates change each month independently, without any input from the borrower. 

While that can be a distinct disadvantage when rates are on the rise (as they were in recent years), it’s now a clear benefit with rates expected to fall again later this year. Consider taking action now, then, to take advantage of this unique combination of high equity amounts and low HELOC interest rates.

See how low your current HELOC rate offers are here.

What prospective HELOC borrowers should do now

A low HELOC rate won’t just suddenly materialize. Instead, borrowers should start by reviewing their credit score and report to ensure that they’re best positioned to secure the lowest rate possible (and, if they aren’t, work on boosting that first). They should also strongly consider shopping for rates with lenders besides just the one that holds their current mortgage loan. That doesn’t necessarily mean that other lenders will have better rates and terms, but you won’t know that they don’t, either, without first taking the time to shop around. 

And you should be prepared to calculate your costs here against a variety of realistic rate scenarios, as the rate you open your HELOC with now will almost certainly change over time. With your home functioning as collateral in these borrowing exchanges, and the risk of foreclosure real, it’s critical that you can make payments here tied to a variety of rates before formally applying for the funds.

The bottom line

HELOC interest rates have been down by more than two and a half percentage points over the past 18 months, with the potential for them to decline further substantially later in 2026. Consider your options carefully, then, as a HELOC may not only currently represent your best and most affordable way to borrow equity but also the most cost-effective way to borrow money overall right now. It may also be helpful to speak with a lender directly who can help you determine your options and next best steps.