$25,000 home equity loan vs. $25,000 HELOC: Which will be cheaper this May?
As of May 2026, a $25,000 home equity loan is slightly cheaper than a HELOC, with average interest rates at 6.95% and 7.11% respectively. Monthly payments are similar for both, but HELOC rates are variable and could decrease further—or increase—over time. Home equity loans offer fixed payments and predictability, while HELOCs provide flexibility but come with rate volatility. Both options have become more affordable compared to late 2025, but borrowers should shop around and maintain strong credit to secure the best terms.
- ▪The average interest rate for a $25,000 home equity loan is 6.95%, while for a HELOC it is 7.11% as of May 2026.
- ▪A 10-year home equity loan at 6.95% costs $289.63 per month, compared to $291.69 for a 10-year HELOC at 7.11%.
- ▪HELOC rates are variable and may fall further, but they also carry the risk of increasing over time.
- ▪Home equity loans offer fixed rates and stable monthly payments, providing more financial predictability than HELOCs.
- ▪Borrowers should compare lenders and have good credit to qualify for the lowest rates on either product.
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MoneyWatch: Managing Your Money $25,000 home equity loan vs. $25,000 HELOC: Which will be cheaper this May? We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. .chip { background-image: url('/fly/bundles/cbsnewscore/images/chip-bgd/chip-bgd-moneywatch.jpg'); } By Matt Richardson Matt Richardson Sr. Managing Editor, Managing Your Money Matt Richardson is the senior managing editor for the Managing Your Money section for CBSNews.com. He writes and edits content about personal finance ranging from savings to investing to insurance.
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