The home equity interest rate forecast is an encouraging one for borrowers this November.
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Borrowing costs are finally easing for homeowners as the Federal Reserve cuts rates. Home equity loan and home equity line of credit (HELOC) interest rates have been consistently declining, making it more affordable to use home equity for renovations, debt consolidation and other major expenses. At the same time, rising home values have pushed household equity to peak levels, creating even more borrowing power for homeowners.
But with the Fed expected to continue adjusting rates, the outlook for November remains fluid. What should homeowners expect for home equity interest rates in the coming weeks? We spoke with three lending experts to get their forecasts and advice for anyone thinking about leveraging their home's value this fall.
Start by seeing how much home equity you could borrow here.
What's the home equity interest rate forecast for November 2025?
"I'm seeing home equity loan rates dipping to around 7.9% to 8.1% on average, and HELOCs easing to about 7.6% to 7.8%," says Steven Glick, director of mortgage sales at real estate investment fintech company HomeAbroad. The drop stems from October's Fed cut in addition to lower inflation and a softening in the labor market.
The two products respond differently to rate changes. "HELOCs are tied to the short-term prime rate and typically adjust immediately in response to the Federal Reserve's decisions," Debbie Calixto, sales manager of mortgage lender loanDepot, explains. Home equity loans move more gradually since they respond not only to the Fed, but also to the broader economic outlook.
Not everyone expects immediate movement. Jeremy Schachter, branch manager at Fairway Independent Mortgage Company, forecasts HELOC rates will hold steady through November. Meaningful drops are more likely if the Fed cuts rates again in December, he notes.
Compare your HELOC and home equity loan offers online to learn more.
Factors shaping home equity interest rates in the weeks ahead
Three key forces will influence where home equity rates head this month, according to the experts we spoke with:
Federal Reserve policy
The central bank's recent cuts have already begun lowering home equity costs. October's quarter-point cut directly affected the prime rate that HELOCs follow. Fed announcements like this can move rates 10 to 20 basis points overnight, Glick emphasizes, making the meetings worth watching. The ongoing government shutdown has delayed some economic reports, but Calixto says available data points to a gradual economic slowdown. That's good news for borrowers since it should keep nudging rates lower in the coming months.
Housing market trends
Record equity levels are keeping rates competitive. "Nearly half of homes are 'equity-rich' right now, with tappable equity totaling $17.5 trillion last quarter," Glick says. The average homeowner with a mortgage holds more than $300,000 in equity, and stable home prices are keeping that cushion intact.
This dynamic benefits borrowers. High equity translates to lower default risk, allowing lenders to offer better rates even as demand climbs. Calixto highlights that declining rates will boost borrowing power further without forcing homeowners to surrender their sub-4% first mortgage. Some are even using this equity to buy a second home.
Lender risk appetite
Home lender confidence is shaping the rates borrowers see. "Like anyone else, lenders lend when they feel safe," Glick points out. Right now, Fed cuts and historically high equity levels are making lenders more comfortable extending credit. That translates to tighter spreads, with some lenders offering rates as low as 6.5% for top-tier borrowers.
Calixto explains that while lenders want to support customers, they take a measured approach by evaluating credit scores, debt-to-income ratios and equity positions. Borrowers with strong credit scores and loan-to-value ratios under 80% get the best deals since they represent less default risk.
What to consider before borrowing equity now
Choosing the right product and timing matters if you're ready to move forward. Here's what to weigh, experts say:
- Decide when to act. "If you need the cash now for a kitchen remodel or debt consolidation, act soon," says Glick. December could bring another dip if the Fed continues easing, but don't delay time-sensitive expenses.
- Choose your rate structure. "With a fixed-rate home equity loan, you know exactly what your payment will be for the life of the loan, which provides stability," Calixto explains. HELOCs provide flexibility with variable rates that drop as the Fed cuts continue. As rates decline, so will your monthly payment and total interest.
- Shop around. Don't stick with your current bank out of loyalty. "It can cost 0.5% to 1% more in rates — that's thousands over the loan life," Glick warns. Get quotes from multiple lenders and compare the full annual percentage rate (APR).
The bottom line
The timing favors action. "I recommend homeowners considering tapping into their equity to do it now," advises Schachter. If you choose a HELOC and rates drop further, your payment will adjust downward. With strong equity positions and competitive lender pricing, waiting may cost more in missed opportunities than you'd save. Monitor Fed announcements and prime rate movements as you evaluate your timing, too.
Edited by Matt Richardson
