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If you were considering borrowing $50,000 in the high-interest-rate environment of 2022 through 2024, just a quick glance at average interest rates was likely enough to discourage you from acting. With rates on personal loans, and all at one point in or just under the double digits, there were few cost-effective ways to borrow a five-figure sum of money. So, borrowers were either stuck with exorbitant rates or left to delay paying for major expenses.
But the interest rate climate has changed over the past 13 months or so. And that's arguably been seen most dramatically in the home equity borrowing space. and are markedly lower now than they were before the Federal Reserve started reducing rates in September 2024. HELOCs, in particular, now come with then. With the in its October meeting – its fifth recent one – and with another reduction likely for its December meeting, now may be the time for homeowners to reconsider their borrowing options, even for larger amounts like $50,000.
Between a $50,000 home equity loan and a $50,000 HELOC, though, which is cheaper now, after the October Fed rate cut? That's
what we'll examine below.
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Currently, it's cheaper to borrow instead of a . The average HELOC rate is just 7.82% now while home equity loan rates average 8.20% for 10-year repayment periods and 8.15% for 15-year periods. Here's what these payments will look like each month:
So, $50,000 home equity loans come with monthly payments approximately $10 higher than HELOCs do.
But that's right now.
, so those payments will be identical each month even if the rate climate heats or cools during the repayment period. The same can't be said for a HELOC, which has a for borrowers in response to market conditions.
That's partially why HELOCs have come down more than two full percentage points over the past year, approximately, in conjunction with Fed rate cuts. There's no guarantee, however, that this dynamic will continue for much longer, and many would say it's inevitable that rates could even rise, especially over a 10- or 15-year period.
Weigh the cost differential between the two products closely, then, to better determine if the minimal interest savings available now are worth the volatility that a HELOC inherently presents to borrowers.
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Trying to time your home equity borrowing application is difficult and will largely depend on personal circumstances. For some, locking in today's lower home equity loan rate may make sense, especially if the chances of additional Fed rate cuts ahead start to diminish. Others, however, may want to pursue a HELOC to avoid missing out on the impacts of future interest rate cuts.
For context, there's around a 70% chance the Federal Reserve will cut rates when it meets again in December, according to the tool. However, there's no uniform answer to this question, especially in the evolving interest rate climate of November 2025. Whichever product offers you the most affordability and security, not just now, but over the long term, is likely the right choice.
Right now, following the Federal Reserve's October interest rate cut, $50,000 HELOCs are cheaper than $50,000 home equity loans. But that relationship could easily change, perhaps sooner than many borrowers anticipate. Closely compare both, then, to better understand which meets your goals and budget. And consider speaking with a financial advisor or home equity lender who can answer your questions and help you better determine your next steps in the home equity borrowing process.
