Home Equity Loans and HELOCs Face Shifting Interest Rates in 2025

Borrowers must weigh the risks and benefits of home equity products as Fed rate cuts remain uncertain.

Home equity loans offer fixed rates, while HELOCs have variable rates that fluctuate with federal interest rate changes.
Experts predict potential Fed rate cuts in 2025, but ongoing economic uncertainty could limit their extent.
HELOC rates are expected to rise to 7.25%, while home equity loan rates may fall slightly but remain higher at 7.9%.
Using home equity as collateral carries the risk of foreclosure if borrowers fail to meet repayment obligations.
Borrowers are advised to carefully assess their repayment plans and shop for competitive rates to avoid financial pitfalls.