HELOC rates are variable, meaning that next year's rate landscape could have a big impact on your borrowing costs. Aitor Diago/Getty Images

Home equity borrowing rates have been on the decline over the last 18 months. While home equity line of credit (HELOC) rates averaged 9.18% last June, the same rates now sit just below 8% , according to Bankrate data. That drop has been largely due to the Federal Reserve rate cuts that have occurred since September 2024. At today's lower rates, you could save thousands of dollars in interest on a typical HELOC compared to what borrowers faced in mid-2024.

And, as 2025 comes to a close, it's a good time to consider whether a HELOC is the right borrowing option to cover your major expenses next year, whether that's to renovate your home, c

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