Both a HELOC and a home equity loan can be good ways to access your home equity this January, depending on your goals and financial situation.

Home equity loans and home equity lines of credit (HELOCs) allow homeowners to tap into the value of their homes. A home equity loan is a fixed-rate, lump-sum loan that allows homeowners to borrow up to 85% of their home’s value and pay that amount back in monthly installments.

For homeowners looking to tap into their record amounts of home equity, the good news could well be ongoing. Bankrate Chief Financial Analyst Greg McBride, CFA, forecasts that HELOC rates will continue to decline in 2025, averaging 7.25 percent, their lowest level in three years.

With the interest rate climate changing again, it helps borrowers to know what a good home equity loan rate is now.

A home equity loan can be a good option to consolidate debt, as it usually carries lower interest rates and longer terms than other financing options. Advantages of using home equity loans or HELOCs to pay off debts include the streamlining of payments and lower monthly payments (compared to credit card bills,