Learn more: The best HELOC lenders right nowFirst things first: What is a HELOC? Whether a HELOC is a good idea depends on your financial situation and the rate environment. Today’s HELOC rates are higher than they were a few years ago, so borrowing costs aren’t cheap. HELOC rates usually move in step with the Federal Reserve’s short-term interest rate decisions. On top of that, HELOC rates are variable, meaning your monthly payments can increase if interest rates rise.