Markets price an 81.6% chance of higher Fed rates by December, pushing average HELOC rates to their highest level since March.
Average HELOC rates climbed to 7.25% on June 26, 2026, up from the year’s low of 7.19% in March and May. Home equity loan rates also rose, reaching 7.86%, compared to a 2026 low of 7.36%. The increases follow growing expectations of a Federal Reserve rate hike later this year.
The CME FedWatch tool shows a 31% probability of a 25 basis point increase in July, with an 81.6% consensus for higher rates by December. HELOC rates, tied to the prime rate at 6.75%, fluctuate based on lender margins, while home equity loans remain fixed but similarly sensitive to Fed policy shifts.
Rates reflect borrowers with credit scores of at least 780 and loan-to-value ratios below 70%. The prime rate’s stability at 6.75% suggests further upward pressure on variable-rate products if the Fed tightens policy.