Both home equity loans and lines of credit notched gains for the week. The average rate on a $30,000 home equity line of credit (HELOC) climbed two basis points this week to 8.02 percent, according to Bankrate’s national survey of lenders. Home equity loans also rose in the latest week, with the average $30,000 home equity loan gaining two basis points to 8.40 percent.

Even though HELOCs have recorded two straight weeks of gains, they are still at their lowest level in two years. And consumer interest remains strong.

“With home equity at record levels and an uncertain future for mortgage rates and the housing market more broadly, we’re seeing record numbers of homeowners tapping their home equity with a HELOC,” says Michael Tannenbaum, CEO of Figure, an online home equity lender. “HELOCs continue to be one of the smartest ways to consolidate and pay down high-interest debt, cover medical expenses, pay for college tuition and so much more.”

HELOCs and home equity loans are down substantially from the highs reached at the beginning of 2024, with HELOC rates hitting lows not seen since 2023. Bankrate Chief Financial Analyst Greg McBride forecasts that rates will continue to decline in 2025, especially those of HELOCs. They will average 7.25 percent, he thinks — which would be their lowest level in three years.

The demand for HELOCs and HELoans is being driven by two factors: lender competition — as banks and mortgage companies try to attract applicants with low-for-a-limited-time loan terms — and the Federal Reserve’s actions. The central bank cut interest rates three times in late 2024, and indicated cuts would continue this year. It did hit the breaks on rate cuts at its first two meetings of 2025, though, moving cautiously as it keeps an eye on inflation and the unemployment rate. All eyes are on what happens between now and the Federal Reserve’s next policy-setting meetings, scheduled for May 6-7.