Here’s how far HELOC costs have fallen since 2024 (and what borrowers should do now)

Around $11 trillion.

That’s how much home equity is considered tappable by homeowners right now, according to a report released earlier this month by the Intercontinental Exchange (ICE). With nearly $17 trillion in total equity currently, this could be a viable funding source for homeowners in need of extra financing in today’s challenging economic climate. And with a home equity line of credit (HELOC)they can do so with a product that’s cheaper than most other home equity products and even less expensive than personal loans or credit cards.

At the same time, HELOCs, like their home equity loan counterparts, utilize your home as collateral. Failure to repay all that’s been borrowed can result in foreclosure. So it’s critical that costs here are managed carefully and that homeowners go into the process informed and prepared. That begins with some understanding of the current HELOC space and the improvement in costs in recent years. Below, we’ll detail what borrowers need to know (and what they should do) to take advantage of this timely opportunity.

Start by seeing how much home equity you would be eligible to borrow here.

Here’s how far HELOC costs have fallen since 2024

“The cost to borrow against equity continues to improve,” the March ICE report states.

“HELOC rates have fallen from roughly 10% two years ago to around 7% at the end of 2025, cutting the monthly cost to tap $50,000 in equity from $412 to $296, a roughly 30% reduction,” the report notes. “Two additional Fed cuts projected for 2026 could push that monthly cost down roughly 10% more, making equity extraction increasingly affordable.”

This is particularly important for both current HELOC borrowers and potential ones, as the product has a variable interest rate that changes monthly based on market conditions. So, if another Fed rate cut is issued or market conditions change, HELOC rates may decline again. And borrowers will benefit from that reduction independently, without having to refinance or pay for refinancing closing costs as they would have to do with alternative products like home equity loans.

At the same time, this variability could also be problematic if rates rise, so borrowers should crunch their repayment costs against a series of realistic rate scenarios to best determine long-term affordability.

See how low your current HELOC rate offers are now.

What prospective HELOC borrowers should do now

If the changes in the HELOC interest rate space have encouraged you to take action, consider starting with these next steps:

• Determine your intended HELOC use: HELOCs aren’t appropriate for every funding need, considering the source used. Home repairs and renovations may suffice, for example, as a HELOC used there may come with tax benefits for borrowers. Debt consolidationsimilarly, may make sense right now. Utilizing a HELOC to pay for a family vacation or a new car, however, should typically be avoided.
• Shop around for rates and lenders: You don’t need to use your current mortgage lender to borrow from your home equitynor should you if competitors are offering better rates and deals. You won’t know your options, however, until you take the time to shop around for rates and lenders (and, fortunately, it’s easy to do so online right now).
• Calculate your repayment costs: As noted, HELOC rates will change, especially over an extended period. So it’s critical that borrowers calculate their costs both with today’s readily available rates as well as what they may be if they rise or fall.

The bottom line

With HELOC costs down by around 30% over the past two years, this could be the smart way to borrow money right now. And with a variable rate well-positioned to decline alongside additional rate cuts issued later in the year, it could quickly become even more affordable for homeowners. That said, with the home functioning as collateral, you’ll want to take a strategic and informed approach to avoid foreclosure risks. Consider speaking with a lender, then, who can answer your questions and help you build a tailored (and secure) borrowing plan.