Connect Images/Chev Wilkinson 
Summer 2025 is officially here and, with it, warmer weather, sunnier days … and, potentially, larger expenses. Whether you find yourself in need of extra funding to cover a family vacation, pay for fall college tuition costs or finance major home improvement projects, your home equity could be the viable and inexpensive funding source you need right now. But with the home in question functioning as collateral and, thus, the threat of foreclosure high, you’ll want to use your equity in as safe and as strategic a way as possible. By doing so, you can potentially improve your overall financial health at the same time.
On the other hand, making the wrong decisions could worsen your financial standing to a significant degree. So it’s important to make the right home equity loan moves this summer. But what, exactly, are those? While these could vary based on the homeowner and your budget, we gathered a list of broadly applicable moves that many homeowners should consider making now.
Start by seeing how much home equity you could borrow from here.
Home equity loan moves homeowners should make this summer
Here are three timely (and strategic) home equity loan moves owners may want to consider making this summer:
Understand the differences between a home equity loan and a HELOC
A home equity loan and a home equity line of credit (HELOC) may operate similarly and sound the same, but they’re not identical. For starters, the loan disburses the equity in a single lump sum, and it comes with a fixed interest rate for borrowers. HELOCs, on the other hand, function as a revolving line of credit that utilizes variable interest rates.
Currently, the average rate on each is primarily the same (home equity loans at 8.27% versus 8.25% for HELOCs), but thanks to that variable rate, that similarity may not last much longer, especially if rate cuts are issued this summer. Take the time, then, to understand the differences, as it will better inform your decision-making and allow you to appropriately choose an option that matches your financial needs and budget.
Compare your home equity loan and HELOC rate offers here to learn more.
Shop around for rates and terms
The above rates are averages, meaning that if you have a good credit score, you may be able to find a rate somewhat lower. So, just like you would with other borrowing products, it’s worth taking the time to shop around for rates and lenders now, especially when considering the potential for rate cuts to be issued later this year. As that becomes more of a reality, lenders may start cutting their rate offers in advance. And, remember that you don’t need to use your current mortgage lender to borrow equity (although you may want to see if they can beat any offer you get from a competitor before formally applying).
Use it for financially sound purposes
Sure, that summer vacation may come with a hefty price tag that can easily be covered by the average $300,000-plus home equity level many homeowners enjoy right now. But should it? You should always utilize your home equity for smart reasons that can improve your financial standing (like paying off high-rate credit card debt) and avoid uses that can hurt it (like paying for a vacation). This money is coming from your most prized financial asset, so it must be used wisely, no matter the seasonal temptations to spend it otherwise.
The bottom line
Your home doesn’t just need to be the place where you live and sleep; it can also be an important financial source for a variety of expenses. But it will need to be used strategically, especially when borrowing from it in the unique economic climate of summer 2025. By making these above moves now, you’ll improve your chances of equity borrowing success both this season and for the months and, potentially, years still ahead.
