My rental property is paid off, but I need cash. Is this a bad time to take out a $50,000 HELOC?

The Federal Reserve's quarter-point rate increase to a 3.75%–4.0% range matters directly for homeowners considering a home equity line of credit. HELOC rates are typically tied to the prime rate, which moves with Fed policy, so newly opened lines of credit will generally carry higher starting rates than they would have earlier this year.

For someone weighing a $50,000 HELOC on a paid-off rental property, the key point is that this is a variable-rate product. The initial rate is only part of the picture: monthly interest cost can rise or fall as policy changes, even if the borrower's plans do not. That uncertainty is separate from the decision itself, which depends on how the funds will be used and how comfortably the payments fit the property's cash flow.

What to watch: upcoming inflation and employment data, since those shape the Fed's next moves, and whether the central bank signals a pause or further increases. Comparing a HELOC against fixed-rate alternatives, and reviewing lender terms closely, can help clarify the trade-offs.