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For a few months earlier this year, it felt like interest rates on home equity lines of credit (HELOCs) were on a permanent decline. After cooling for much of 2024, rates on the popular home equity borrowing product dropped to an 18-month low in January, a two-year low in February and another one in March. By early April, the average HELOC interest rate was comfortably below 8%, marking a remarkable two-plus percentage point drop in less than six months. And it seemed possible that rates could fall closer to 7% by the summer.
But that possibility hasn’t come to fruition, and HELOC rates have made a gradual but steady rise since then to 8.27%, where they currently reside. But since rates here are variable and subject to change monthly, both existing borrowers and prospective ones shouldn’t worry too much either. Rates here are still much lower than what can be secured with alternatives like personal loans and credit cards. And they’ll decline with no effort (or refinancing costs) on behalf of the borrower.
That said, when exactly could HELOC rates fall again? Below, we’ll examine three calendar dates when HELOC rates could fall again this summer.
Start by seeing what HELOC rate you’d currently qualify for here.
3 times HELOC rates could fall this summer
While predicting the future of interest rates is inherently impossible to do with precision, if recent history is any indication (and with an understanding of what drives HELOC rates), they could become cooler on one or more of the following dates this summer:
July 15, 2025: The June inflation report release
Inflation ticked up by a single basis point in May after falling for a few months prior. Now at just 2.4%, the rate is many percentage points lower than its June 2022 high of over 9%. And with the Federal Reserve’s target goal of 2%, inflation is closing in on where the bank wants it to be. Should the next inflation reading released by the Bureau of Labor Statistics on this date show another decline or, potentially, the rate even nearing that 2% goal, it could give the Fed the motivation it needs to reduce rates while offering home equity lenders the data support they need to start preemptively lowering rates in anticipation of a formal cut.
Compare your current HELOC rate offers here to determine affordability.
July 29, 2025: The July Federal Reserve meeting
Earlier this year, many economists and experts were all but guaranteeing that the central bank would reduce rates at their mid-summer meeting. And they still might, should economic conditions change in a way that encourages them to take action. If they do, HELOC rates may decline on or around this date. While not nearly as likely as once expected, the Fed can cut rates here. And, even if they don’t, comments made post-meeting about any future rate reductions could be strong enough to cool the rate climate anyway, including those on HELOCs.
September 17, 2025: The September Federal Reserve meeting
Sure, this is the very end of the summer but this is arguably the most realistic date when borrowers could expect HELOC rates to change. On this date, the Federal Reserve will conclude its two-day September meeting and, with it, likely issue its first rate reduction since December 2024. Right now, the CME Group’s FedWatch tool has a cut here listed at more than a 90% likelihood. Yes, economic factors could skew this outlook and, yes, HELOC rates may change before or after the meeting, but if you’re trying to time your HELOC application or looking for relief in your current HELOC repayment structure, this is the top time to pay attention to this summer.
The bottom line
Market conditions are constantly evolving but there’s reason for homeowners borrowing with a HELOC to be cautiously optimistic this summer. There are multiple dates in which rates could fall, either individually or collectively. That said, home equity loan rates right now are approximately the same as HELOCs and rates there are fixed. So, if you know you want to borrow home equity but don’t want to have to continually monitor the market for changes that could impact your monthly repayments, a home equity loan may be the preferable option.
