Borrowers have not recently been accustomed to finding products with low interest rates. After inflation hit a decades-high in June 2022, rates on borrowing products soared. Mortgage rates hit their highest point since 2000. Home equity loan and home equity line of credit (HELOC) rates also increased, as did rates on personal loans. And credit card interest rates surged toward the end of 2024 to a record 23%.

But the economic climate of early 2025 is a bit unusual. Inflation is significantly lower than it was, but it’s ticked up in four consecutive months. And interest rates, which were cut three times toward the end of 2024, have remained frozen since December. In this climate, then, an affordable way to borrow is especially valuable.

Fortunately, homeowners have an alternative worth exploring at their disposal: their home equity via a home equity line of credit (HELOC). HELOC interest rates declined in 2024 and have since hit 18-month and two-year lows, respectively, in 2025, making them one of the cheapest ways to borrow money right now. But how cheap can homeowners expect it to be? Below, we’ll demonstrate how much you’d save by borrowing with a HELOC now compared to some popular alternatives.

Start by seeing how much equity you could withdraw with a HELOC online today.

Here’s how much you’d save by borrowing with a HELOC now

The average HELOC interest rate for qualified borrowers is 8.12% right now. That makes it significantly cheaper than home equity loans (averaging 8.40%), personal loans (averaging 12.37%) and credit cards (averaging around 23% now). However, while those differences may seem clear when comparing rates, they become even starker when calculated against a large borrowing sum. 

Here’s the difference between all four when borrowing $40,000, spread over 10 years:

• 10-year HELOC at 8.12%: $487.85 per month
• 10-year home equity loan at 8.40%: $493.81 per month
• 10-year personal loan at 12.37%: $582.47 per month
• 10-year credit card repayment at 23%: $854 per month

And here’s what that would look like if spread out over 15 years instead:

• 15-year HELOC at 8.12%: $385.04 per month
• 15-year home equity loan at 8.40%: $391.55 per month
• 15-year personal loan at 12.37%: $489.63 per month
• 15-year credit card repayment at 23%: $792 per month

Based on the above calculation, a HELOC right now for $40,000 can be as little as a few dollars cheaper than a home equity loan to hundreds of dollars cheaper than a credit card. Still, it’s important to remember that both HELOC and credit card interest rates are variable (the above calculations assume rates will remain constant, which they won’t). All of the above figures assume the borrower has a good credit score. If they don’t, they could be offered rates significantly higher, skewing these figures by a significant degree.

See what HELOC rate you’d currently be eligible for here.

The bottom line

HELOCs are one of the cheapest ways to borrow money in the interest rate climate of March 2025. But you won’t be able to withdraw small amounts like you would with a credit card or personal loan, so those limitations will need to be accounted for. And unlike credit cards and personal loans, your home will function as collateral, so you’ll want to calculate your potential repayment costs tied to a wide variety of realistic rates to better determine long-term affordability. Consider also speaking to a home equity lender (you don’t need to use your current lender) to learn more about the dos and don’ts of borrowing with a HELOC now.