The Federal Reserve's decision to cut the targeted federal funds rate by at least 75 basis points will translate into lower borrowing costs for homeowners who have a home equity line of credit.

Most HELOCs are indexed to the prime rate, a common benchmark for consumer and business loans set by banks. The prime rate moves in lockstep with the federal funds rate.

However, it may take one or two billing cycles before consumers see borrowing costs fall. People with existing home equity loans will not see their borrowing costs fall, as rates on these instruments remain fixed.

Rates on new home equity loans do not move in lockstep with the federal funds rate and are unlikely to change based on the Fed's most recent actions. In recent weeks, rates on home equity loans have soared to their highest levels since 2002.