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Home equity line of credit (HELOC) rates continue to drop in 2025, hitting two-year lows and giving homeowners rates that are nearly one percentage point lower than they were in March 2024. Not only have rates declined over the past few months, but home equity levels are on the rise. In fact, the average homeowner has an average of $313,000 in equity, which is 6% higher, year-over-year.
With plenty of equity in their home (on average) and low HELOC interest rates, homeowners looking for funding are in a good position to borrow money from their equity — even six-figure amounts such as $200,000. HELOCs provide an affordable way to do that, offering a revolving line of credit you can borrow from as needed (up to your limit) at rates that are lower than home equity loans, personal loans and credit cards right now.
If you’ve got big expenses coming up or a plan requiring a six-figure sum and need to access $200,000 from your home’s equity, it helps to first know what the monthly payments on a $200,000 HELOC could cost if applied for now. Below, we’ll do the calculations.
See how low your HELOC rate could be here.
How much does a $200,000 HELOC cost per month in 2025?
When you’re making a financial decision about a six-figure sum of money, it’s crucial to understand how much it will cost each month to borrow. This can be difficult to determine with a HELOC since it has a variable rate subject to change over time. Still, calculating potential costs as today’s rates can help give you a rough estimate of what to expect. Here’s what you can expect to pay monthly in 2025 for a $200,000 HELOC at today’s rates (assuming rates are constant):
- 10-year HELOC at 8.06%: $2,432.90
- 15-year HELOC at 8.06%: $1,918.24
To demonstrate the cost-effectiveness of borrowing with a HELOC now, here’s how much a $200,000 HELOC would’ve cost monthly at rates from March 2024 (assuming rates were constant):
- 10-year HELOC at 8.99%: $2,532.43
- 15-year HELOC at 8.99%: $2,027.34
So, today’s rates for 10- and 15-year $200,000 HELOCs are around $100 per month compared to rates from one year ago but those payments could become even cheaper soon if the downward trend in HELOC rates continues.
Find out how much home equity you can borrow here.
Should you borrow $200,000 worth of home equity?
With such a large amount of money at stake, it’s important to consider if it’s worth it to take out a $200,000 HELOC.
Real estate agent James Magill, owner of Area 361 Hospitality, a commercial real estate firm, says he often sees homeowners use HELOCs for pool installations, a move that can be worth it since pools tend to increase home values and give a boost to your quality of life.
However, he generally cautions against using a HELOC for something that isn’t going to produce a return, such as a boat or RV.
“Essentially, it’s not great to create more debt for recreational vehicles or something that isn’t producing any income or reducing your overall debt-to-income ratio,” Magill says. “I wouldn’t recommend increasing your debt-to-income ratio on something that isn’t going to give a return on your investment.”
Because there’s such a large amount of money at stake with a $200,000 HELOC, you have to be sure you can afford your monthly payments, notes Matthew Teifke, principal at TR3 Capital, a residential property management firm.
“[You have to] have some kind of additional income to pay for that monthly payment,” Teifke says. “It comes down to being able to afford it through a secure investment or another source of income.”
If you’re considering using your HELOC to start a small business or fund an investment opportunity, don’t go in blindly. Use the money for an opportunity you’re familiar with, Teifke says.
“Be competent in the investment you’re looking at,” he says. “Don’t jump into a tech startup if you haven’t done that before. If you know real estate, look at investing in an apartment complex. It can go bad fast, so be very diligent [about] where you’re putting the money and why.”
The bottom line
Taking out a $200,000 HELOC requires a clear sense of what your monthly borrowing costs will be, what you’ll use the money for and how you plan to pay the money back. Keep in mind that HELOCs have two phases: draw and repayment. During the draw period, you can withdraw money from your line of credit but will usually be required to make monthly interest-only payments. Once your draw period ends, you’re required to make monthly payments on your principal and interest, which means your monthly payment will increase considerably.
