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The decline in the home equity interest rate climate isn’t slowing down. Case in point? The average rate on a home equity line of credit (HELOC) declined again this week, according to Bankrate data released on Wednesday. Now at just 7.18%, HELOC rates are near their lowest level in three years, on average. It was only one year ago that rates here were comfortably in the 8% range, illustrating the cost-effectiveness this product currently offers homeowners in need of extra funding.
Like all borrowing products, however, the timing of your application matters. And that’s especially true when leveraging your home equity, as you would with a HELOC. Failure to repay here could easily lead to the home in question being foreclosed upon. Fortunately, the timing this March once again benefits prospective HELOC borrowers. Below, we’ll break down three big advantages of opening one right now.
Start by seeing how much you could borrow with a HELOC here.
3 advantages of opening a HELOC now
There are some periods in which borrowing from your home equity with a HELOC may not be financially advantageous or even, potentially, risky. But that’s not the case this March. Here are three specific advantages borrowers can expect if they open a HELOC now:
A lower interest rate than most alternatives
At an average rate of just 7.18% right now, a HELOC isn’t just the more affordable way to borrow home equity. It’s actually the most affordable way to borrow money overall. With home equity loan interest rates closer to 8%, personal loan rates over 12% and credit card rates still over 20% this March, a HELOC represents one of the cheapest ways to borrow money right now.
Compared to a credit card, for example, a HELOC is around three times less expensive. And if borrowers take the time to shop around online by comparing lenders (they don’t need to use the one that currently holds their mortgage), they may be able to find a rate that’s even lower than that 7.18% now.
Shop for low-rate HELOCs online today.
A rate well-positioned to decline this year
A HELOC has a variable interest rate that will change each month based on market conditions. While that can be a distinct disadvantage in other economic climates, this March and in the months that follow it can actually be a major help. That’s because interest rates are largely expected to decline later in 2026, particularly if the Federal Reserve continues cutting rates as it did in the closing months of 2025 and 2024. That will lead to lower HELOC rates for borrowers. And, unlike a home equity loan, these homeowners won’t need to refinance (and pay for refinancing closing costs) as the HELOC rate will adjust independently with no work required on behalf of the borrower.
Tax benefits that other borrowing products don’t offer
With April 15 right around the corner and millions of Americans wondering about the ways they can reduce their tax bill next year, it helps to remember the tax benefits a HELOC offers that other borrowing products do not. If you use your HELOC for eligible home repairs and renovations in 2026, you may qualify to deduct the interest paid on your taxes when you file in 2027.
That not only will reduce your tax bill, but it can also reduce concerns over today’s interest costs if you know that you’ll essentially be getting a part of it back next tax season. Just be sure to carefully consider which projects will and won’t qualify for this tax perk, as not all home projects will be eligible.
The bottom line
With HELOC rates at a new average low, this March could be the smart time for borrowers in need of extra money to consider this product. And with rates here considerably lower than many alternatives, the potential for the product to become cheaper based on improved market conditions later in 2026 and tax benefits that could reduce your tax bill for the years in which you used the product, now may be the time to start truly comparing your HELOC options. Consider speaking with a lender today who can better help you determine your next steps, and answer any specific questions and address any concerns you may have.
