Homeowners with equity are getting flooded with offers to tap it.
HELOC rates have drifted down from their post-2023 peaks as the Federal Reserve holds steady, and lenders are hungry for new borrowers.
A home equity line of credit now averages roughly 8% to 9% nationally, down from the double-digit territory that scared people off two years ago.
On a $50,000 line, that shift saves real money every month.
Credit card rates are still parked near 20% or higher, and personal loans aren't much better.
If you're carrying balances while sitting on $80,000 of untapped home equity, the math looks tempting.
Moving $15,000 of card debt to a HELOC at 8.5% could cut your interest cost by more than half.
That's not a gimmick — it's just arithmetic.
But the fine print is where people get hurt.
Most HELOCs come with variable rates tied to the prime rate.
When the Fed eventually moves, your payment moves with it.
Some lenders also dangle a low "introductory" rate for six or twelve months, then reset it higher.
Ask what your rate becomes if prime climbs two points.
There's a second trap: closing costs and annual fees buried in the disclosure packet.
Many banks waive fees if you keep the line open for a set period, often three years.
Close it early and you may owe hundreds back.
That's fine if you plan to stay put — risky if you might sell or refinance soon.
Then there's the behavioral problem nobody advertises.
Studies keep finding that people who consolidate card debt into home equity often run the cards back up within a couple of years.
Now they've got the old balance plus new charges, all secured by the roof over their heads.
A HELOC turns unsecured debt into secured debt, which means falling behind can cost you the house.
Borrowers with steady income, a clear payoff plan, and enough discipline to stop using the cards.
It can also work for a planned renovation or a bridge expense you know is temporary.
It's a poor fit for anyone treating it as breathing room for ongoing overspending.
Shop at least three lenders, including a local credit union — their margins are often lower than the big banks'.
Ask specifically about rate caps, which limit how high your rate can climb over the life of the line.
And check whether a fixed-rate option exists for the portion you draw, so at least part of the balance can't surprise you.
The drop in rates is genuine, and for the right household it's a real opportunity to stop bleeding interest.
Just don't let a slick mailer make the decision for you.
Our take: a HELOC is a tool, not a rescue.
If the only way you can pay off your cards is by pledging your home, fix the spending first.
Final Thoughts
Otherwise you're just moving the risk somewhere it can take everything.