When considering your home equity as a financing source, there are multiple options worth considering. From reverse mortgages (for owners 62 and older) to cash-out refinancing to home equity loans and home equity lines of credit (HELOCs), chances are high that there’s a suitable financing option for you right now. That said, the pros and cons of each should be carefully considered, particularly now while interest rates are still elevated and the costs of years-long high inflation are still being felt.

Against this backdrop and heading into the final months of 2024, a HELOC could be the optimal choice. This product works as a revolving line of credit, much like your existing credit cards, so it’s easy to use. And with the average homeowner having more than $300,000 worth of equity right now, there’s plenty of money to cover most expenses. But those aren’t the only reasons why a HELOC could be best for homeowners this October. Below, we’ll detail three others.

See what HELOC interest rate you’d be eligible for here.

Why a HELOC could best for homeowners this October

Not convinced that a HELOC is your best way to tap into your home equity this October? Consider these three big reasons why it may be:

An interest rate that drops often

A HELOC has a variable interest rate that can change monthly. This is a distinct con when interest rates continually head upward but an obvious pro now that an interest rate cut was just issued and multiple others look likely toward the end of the year. HELOC rates change often and have already come down from where they were earlier this week. So you could be positioned to save a significant amount of money if today’s rate trends persist.

Explore your current HELOC options online now.

A lower rate than other popular options

If you need extra financing now, it could be due to the exorbitant interest rates you’re stuck paying on some other popular options. Credit card interest rates, for example, are hovering near a record 23% currently. Personal loan interest rates are better but are still a median of 13%. But today’s average HELOC rate is just 8.94%, down from the 9.26% it was at at the start of the week. When compared to the double-digit alternatives, then, a HELOC becomes the clear choice for homeowners this October.

A tax deduction for eligible uses

Do you need money to pay for a home repair or renovation but aren’t sure how much you’ll need? In this case, a HELOC is a good choice because you’ll only pay interest on the amount of money you use – not the total line of credit you were approved for. And if used for IRS-eligible home fixes, you’ll be able to deduct that interest from your taxes when you file your tax return next spring. Granted, home equity loans also have this benefit, but rates on that product are fixed and will need to be refinanced to secure the lower rate that a HELOC will drop to independently.

The bottom line

Every homeowner’s financial situation is different and there may be many who don’t find the aforementioned HELOC benefits applicable to them. For many others, however, this could be the smart and best way to tap into your equity this October. With a rate that’s likely to fall again soon (and one that’s already lower than credit cards and personal loans), a HELOC becomes the preferred option. Plus, you’ll be able to deduct that minimal interest in 2025 if used for approved home projects. For all these reasons and more, a HELOC could be best for homeowners this October. 

Just remember, however, that rates on home equity products are generally lower partially because your home serves as collateral in these borrowing circumstances. So only use an amount of money you feel comfortable being able to repay, or you could risk your homeownership in the process. 

Have more questions? Learn more about the benefits of using a HELOC here.