When it comes to locking in an interest rate on a borrowing product, the timing can be difficult to get right. Wait too long and you risk having to pay more than you would have at an earlier point. Start too early, however, and you could see yourself getting locked in to a rate that declines right after you close on the loan. Monitoring the interest rate climate closely, then, for opportunities to act (and for times to step back) is critical. And it's even more important for homeowners considering a home equity loan. 

Since these funds come directly out of your home, which serves as collateral in the borrowing exchange, you'll want to ensure long-term affordability to offset any risk of foreclosure. That means knowing when to lock a home equity loan interest rate – and when not to. In the unique interest rate climate of June 2025, however, there's a compelling case to be made for locking in a home equity loan rate now. Below, we'll list three reasons why this makes sense for homeowners in need of extra financing.

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Should you lock a home equity loan interest rate this June?

While each homeowner's financial situation is different, many homeowners considering a home equity loan would benefit from locking in a low rate now. Here's why:

Home equity loan rates are stagnating

Home equity loan interest rates steadily declined in 2024 and continued to slowly drop in the early months of 2025. But that progress has been slowed in recent weeks, with rates here dropping from 8.36% on May 14 to 8.23% on May 21 to 8.24% on May 28 and 8.25% on June 4, according to data. 

While those aren't major differences week-over-week, they do indicate some uncertainty on behalf of lenders as they await new data on inflation, Fed rate cuts and economic policies. Considering that rates are still lower than the approximate 8.80% average from early 2024, those in need of a home equity loan now may want to lock in what's available at the moment – and look to refinance should the market significantly cool in the future.

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Rates could stay higher for longer than anticipated

Optimism earlier this year that the Federal Reserve would continue its interest-rate cut campaign in 2025 has waned significantly after the central bank kept rates paused at its January, March and May meetings. And the are also dim. Finally, if rates are eventually cut, either in July or September, it's likely to be just by 25 basis points to start, which will have a muted impact on home equity loan interest rates. Understanding this dynamic, then, and with relatively low home equity loan rates already available, it makes sense to lock in a rate now to limit any additional expenses that could arise from an extended rate pause.

It's still cheaper than many alternatives

The ? Close to 13% now. And the average credit card rate? Around , just recently down from a record high. Even home equity lines of credit (HELOCs), which were clearly the cheapest borrowing option earlier this year, have become more expensive lately as rates there are up by more than 25 basis points from where they were earlier this spring. 

Matched up against these alternatives, then, and with the benefit of a fixed rate in a climate in which rates could easily rise again, proceeding with a home equity loan makes sense now. Not only is it cheaper than a credit card and HELOC – it will remain so as these other two alternatives have variable rates that could rise in response to market conditions while the home equity loan rate secured today will be the same one six months from now (or longer).

The bottom line

It may not always make sense to lock in a rate on a borrowing product, especially if the climate is cooling. But June 2025 isn't necessarily that economic atmosphere. With home equity loan rates low (but stagnant), the chances of higher rates for longer appearing more and more likely and the reality that rates here are still lower than some alternative products with variable rates, homeowners in need of financing may find that locking in a home equity loan rate this June makes the most sense for their needs and long-term goals.