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All eyes will once again turn toward the Federal Reserve on May 6 and May 7 when the central bank meets yet again to determine monetary policy and the future of the interest rate climate. The bank didn't meet in April but in it's previous 2025 meetings in and it elected to keep the federal funds rate frozen at a range between 4.25% and 4.50%. That left interest rates on a variety of products that take direction from the Fed in limbo.

One borrowing product that consistently declined in cost during this period, however, was a . Not only did (both before and during the Fed's rate-cut campaign), but that decline continued in the opening months of 2025, with HELOC rates dropping first to before following that up by declining to multiple . Now at just 7.95%, HELOC rates are down more than two full percentage points , making it the right now.

But will it remain that way for much longer? And should prospective borrowers take any preemptive action now, before the Fed meets again in May? That's what we'll examine below.

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While it may not necessarily hurt to proceed with a HELOC application before the Fed announces its next interest rate moves (or lack thereof) on May 7, it's not exactly an urgent need, either. 

That's because that will adjust for borrowers. So the need to lock in a low HELOC rate to get ahead of any Fed rate adjustments that could cause rates to spike isn't needed. HELOC rates will change independently after the meeting anyway. Or at least they will if any real rate changes or issued, or even hinted at for the future. But that looks unlikely right now, with the tool listing the likelihood of a rate cut this month at just 0.5%.

In other words, urgent action is typically more applicable when borrowing with a fixed-rate product (like a ) that could rise if the Fed raises rates. But since a HELOC has a variable rate and because rate cuts now look more likely for later in the year than rate hikes, homeowners don't need to rush to secure a HELOC by May 5. However, that doesn't mean that they should delay their financing needs much further either.

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The timing behind your borrowing application, whether it be for a HELOC, home equity loan or some other type of funding altogether, is important to get right. Here, then, is why a HELOC makes particular sense right now:

It's the cheapest option around: At 7.95%, a HELOC has a lower average rate than a home equity loan, personal loan and credit card right now. And if you have a and do your homework by shopping for rates and lenders, you may be able to find an even cheaper rate.

It's a smart way to finance spring and summer home projects: Your choice of financing can feel endless but there are only two options in which you can deduct the interest paid on your taxes for : and . Not only could this boost your tax refund in 2026, but it could make concerns over today's rates less pressing when you know that the interest paid will transform into a sizable deduction next year.

It's positioned to become even cheaper: As mentioned, HELOC rates change each month. While that could be problematic in a rising rate climate it's a distinct advantage this May, with rates set to fall again soon. Not only will this set you up for future savings without having to do any refinancing work, but you'll also save on that you otherwise would have got burdened by if you opened a instead.

While the decision to open a HELOC before the May Fed meeting may be a personal one, the benefits of choosing a HELOC over other borrowing options is broadly applicable right now. So consider getting started by researching lenders and rate offers today. And remember that borrowing with a home equity product should be done carefully as the home serves as collateral in these exchanges. Failure to repay could result in .