HELOC Rates Jump 16bps to 7.26% as BofA Cites $11T Tappable Equity
Home equity line rates rose 16 basis points to 7.26%, while five-year $30,000 loan rates climbed 12 basis points to 8.03% this week. Bank of America cites $11 trillion in tappable equity and pandemic-era low mortgage rates as key drivers of record origination volumes despite steady Fed policy.
1. Rate Movements
This week, home equity line rates increased 16 basis points to 7.26% and five-year $30,000 home equity loan rates rose 12 basis points to 8.03%. Other home equity loan terms also ticked higher, though all remain near multi-year lows.
2. Demand Drivers
Bank of America highlights more than $11 trillion in tappable home equity and a lock-in effect from pandemic-era low mortgage rates as the primary catalysts supporting elevated origination volumes in the home equity sector.
3. Fed Policy Impact
The Federal Reserve held its benchmark rate steady with four officials dissenting, and the outlook points to a flat rate environment through 2026, projecting average HELOC rates around 7% and home equity loans near 8%.
4. Competitive Context
Secured home equity financing remains far cheaper than unsecured credit, with credit cards averaging 19.57% and personal loans at 12.27%, underscoring the relative affordability of tapping home equity.