That's because home equity loans and home equity lines of credit (HELOCs) — which are loans that use your home's equity as collateral — currently have much lower interest rates than most other major financing products on today's market.

Both HELOCs and home equity loans have declined substantially from their highs reached at the beginning of 2024, although they have moved off the lows they achieved this year. Bankrate Chief Financial Analyst Greg McBride still forecasts that rates will decline in 2025 — especially those on HELOCs, potentially to their lowest level in three years.

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.