If you're a homeowner considering borrowing from your home equity, developments this March have made that a smart choice. At the start of the month, a new report showed the average home equity amount at $313,000, up 6% year-over-year. That gives the median homeowner hundreds of thousands of dollars of equity to use as they need right now. And they can do so at a consistently declining interest rate, should they tap into it with a home equity line of credit (HELOC). Not only did interest rates on HELOCs decline for much of 2024, but they continued to fall in early 2025, hitting multiple, two-year lows just over the past month. 

Now at 8.03%, HELOC interest rates are more than two points lower than the 10.16% they came in at in January 2024. Since HELOCs have variable rates that will change for borrowers monthly, however, interested homeowners may be contemplating the possibility for rates on the line of credit to fall even further. Specifically, when will HELOC interest rates fall below 8%? While it's impossible to predict with clarity, particularly for a variable rate product, it's possible that HELOC interest rates could fall below this threshold relatively soon. Below, we'll break down what that timeline could look like.

.

When will HELOC interest rates fall below 8%?

HELOC interest rates are likely to remain where they are for the next few weeks — that is, until the Bureau of Labor Statistics releases its next inflation reading. If that reading for March, set to be released on April 10, shows further cooling, then HELOC rates can and likely will fall below 8%. A cooling inflation rate, after all, raises the chances of additional rate cuts courtesy of the Federal Reserve. Those cuts have been on pause so far in 2025 after three were issued in the final months of 2024, but they could be back in play for later this year, or even in May, when the bank meets again, if inflation continues declining (it fell to 2.8% in February). 

That said, lenders don't need to wait for the Fed to take formal rate-cutting action to begin reducing their HELOC interest rate offers. HELOC rates, after all, declined in January when the Fed paused its rate-cut campaign, continued to decline in February without a Fed meeting, and fell again in March even though the Fed announced an extended pause. So it's very likely that HELOC rates will fall below 8% in early April, even though the bank won't officially meet again until May 6 and May 7.

Still, any unforeseen economic developments could easily skew this downward trend. HELOC rates could stagnate or even rise if economic indicators worsen, so borrowers will need to be cautious in their approach. That said, waiting for rates to fall any further isn't necessary, either, as rates will adjust for existing borrowers independently, without having to refinance (or pay for refinancing closing costs), as would be the case with a home equity loan.

.

The bottom line

Predicting the future of interest rates can only be done via speculation and with historical performance as a guide, so borrowers should be cautious with an overly optimistic outlook. That said, HELOC rates have been on a steady decline for more than a year, and with economic indicators pointing toward that decline continuing, rates on the line of product could easily fall below 8% relatively soon. 

This makes now a smart time to consider borrowing with a HELOC, particularly when compared to the double-digit rates on personal loans and credit cards. Just be sure to calculate your repayment costs against a series of realistic rate scenarios as you'll need to maintain your payment schedule as agreed upon or risk losing your home to the lender.