ASHEVILLE HELOC RATES TODAY
Current HELOC rates in
Asheville, NC.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Current HELOC rates in
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Key Points
• The rates for a home equity line of credit are influenced by the prime rate and the borrower’s financial history.
• HELOCs are a flexible, revolving line of credit secured by home equity.
• With a HELOC, you may have a variable interest rate, which can impact your monthly payments and overall costs.
• You should compare multiple lenders to find the most competitive rates.
• It’s essential to have a solid plan for paying back your HELOC to avoid financial strain and potential risks.
Introduction to HELOC Rates
In this guide, we’ll take a deep dive into home equity line of credit rates in Asheville, North Carolina, so you can confidently get equity out of your home. We’ll explore the factors that influence HELOC rates, the potential benefits and risks of HELOCs, and how to compare different lenders to find the best terms. Whether you’re looking to spruce up your home, consolidate debt, or tackle other major expenses, this guide will arm you with the knowledge you need to make smart borrowing decisions.
What Exactly Is a HELOC?
A HELOC uses your home’s equity as collateral for a revolving credit line. Your equity is the difference between your home’s value and your mortgage balance. You’ll typically need 15% equity to qualify for a HELOC, but even more equity is good if you want the most attractive interest rate. You can borrow up to 90% of your equity. A HELOC has two distinct periods:
The Draw Period
Borrowers have an initial draw period, typically up to 10 years, during which they can borrow in increments up to a specified credit ceiling. During this time, they will only have to make interest payments on what they have borrowed. A HELOC interest-only calculator can show you what these payments might look like.
The Repayment Period
After the draw period comes the repayment period, which can last up to 20 years. At this time, you won’t be able to borrow any more, and you’ll begin to pay back the principal plus interest in monthly payments. A HELOC monthly payment calculator can help you see how much your payments might be at this stage.
What Determines HELOC Interest Rates?
Lenders base their HELOC rates on the prime rate, which is largely driven by Federal Reserve policies. Each lender then adds a different margin to the prime rate, leading to variations in the rates they offer. This is why it’s so important to get rate quotes from multiple lenders when exploring a HELOC. Additionally, lenders will consider factors such as your credit score, debt-to-income (DTI) ratio, and the amount of equity you have in your home when deciding what rate to offer. Understanding this can help you put your best foot forward when applying.
How Interest Rates Impact HELOC Affordability
As you probably noticed when you bought your home and took out your home loan, even the smallest change in interest rates can make a big difference in how affordable it is to borrow money. For example, if you have a $50,000 HELOC and borrow the full amount at 8.50%, repaying it over 15 years, you would have monthly payments of $492 during the repayment period and total interest of $38,627. At 9.50%, the monthly payments would be $522 and the total interest would be $43,980. HELOC rates are variable so your actual results may differ. But a lower starting rate is better.
HELOC Interest Rate Trends
Monitoring the prime interest rate is a smart way to gauge where HELOC rates are going. The prime rate hit a low of 3.25% in 2020 and a high of 8.50% in 2023. This historical backdrop is a good reference, offering some perspective on current rates.
| Date | U.S. Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.5% |
| 9/27/2018 | 5.25% |
Source: U.S. Federal Reserve
Variable vs. Fixed Interest Rates
As noted above, HELOCs come with variable (also called adjustable) interest rates. This means the rate can change over the course of your HELOC according to market conditions. You’ll have to ask yourself whether you can handle that unpredictability. There are some built-in controls that will be in the HELOC agreement, specifying how much the rate can change and placing a cap on the rate overall. As long as you can live within that range and make your monthly payments, you’re in good shape.
Recommended: Different Types of Home Equity Loans
Helpful Tools and Calculators
Before you take the leap and apply for a HELOC, it’s wise to use our online tools to get a sense of what your monthly payments and interest costs might look like. You might also use these after signing on to a HELOC to compute changing costs as interest rates shift.
Run the numbers on your HELOC.
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Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
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HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
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HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
How to Qualify for a Competitive HELOC Rate
To land a top-notch HELOC rate, you’ll want to focus on a few key areas. By ensuring these financial aspects are in good standing, you’ll be in a stronger position to secure a competitive HELOC rate.
Improve Your Credit Score
You can get a HELOC with a credit score of 640, but to ensure you’re in a prime position to secure the best available HELOC rates, aim for 700 or higher. By making payments on time and chipping away at your credit card balances, you can give your credit score a lift. Setting up automatic payments is a good idea. Keep an eye on your credit report for any errors, too. A better credit score can unlock the door to more favorable loan terms and lower interest rates, making your HELOC more affordable and easier to manage.
Calculate Your Debt-to-Income (DTI) Ratio
Your DTI ratio is a simple comparison: your monthly debt payments divided by your gross monthly income. For HELOC lenders, a DTI under 50% is the general target, but the lower, the better, and the best interest rates go to those with a 36% or lower DTI. To improve your DTI, focus on paying down debts, increasing your earnings, or both.
Application Process for a HELOC in Asheville
Many lenders offer the convenience of prequalifying for a HELOC online. This first step can provide you with a clear picture of the HELOC rates in Asheville that you may be eligible for, as well as the credit limit you may be offered. Next, you’ll proceed to the full application process:
Step 1: Run the Numbers
Before you take the plunge with a HELOC, it’s wise to take a good look at your financial landscape. Start by checking your credit scores from all three major credit bureaus and calculating your debt-to-income (DTI) ratio. Then, consider your home equity, which grows as you make regular mortgage payments and as your home’s value increases over time. Subtract your outstanding mortgage balance from your home’s estimated value. Then divide the answer by your home value to arrive at a percentage. As noted above, you’ll need at least 15% equity to move forward.
Step 2: Compare Lenders
To find the best HELOC lenders in Asheville, you’ll want to compare them and see which ones offer the best rates and terms. Look at the interest rates, qualification requirements, minimum and maximum amounts you can borrow, fees, and the length of the draw and repayment periods. Because the terms vary from lender to lender, it’s important to shop around and read the fine print before you commit to a HELOC.
Step 3: Submit Your Application
Now, gather your paperwork. You’ll need government-issued identification, recent pay stubs, W-2 forms, and copies of your last tax return. If you’re self-employed, a lender may ask for a profit-and-loss statement in addition to two years’ worth of tax returns. Property documentation includes a homeowners insurance declaration page. Submit your HELOC application online, over the phone, or in person.
Step 4: Get an Appraisal
A home appraisal is a professional and objective analysis conducted to determine your home’s value. The cost for a home appraisal ranges from $300 to $610. This step is important in determining the amount of equity you can potentially access and the specific terms of your HELOC agreement. A prospective lender will tell you what kind of appraisal is required, so wait for instructions.
Step 5: Prepare for Closing
Once you’ve been approved, before you can access your HELOC funds, you’ll need to sign the HELOC agreement and pay any closing costs. You may have to pay for an appraisal, title search, origination fee, and other fees. Some lenders charge an annual fee. Be sure you know all the costs involved with the HELOC.
Closing Costs and Fees
HELOC closing costs are usually more affordable than those associated with buying or refinancing a home. The appraisal fee tends to be the steepest expense. A title search, if necessary, may cost between $100 and $450. You might also encounter application, loan origination, and administrative fees, as well as maintenance fees (up to $250/year). Certain lenders may also charge transaction, inactivity, or early termination fees.
Tax Benefits and Considerations
You can deduct the interest on your HELOC for the 2025 tax year if you use the funds to improve your primary residence. It’s a good idea to talk to a tax professional to see if you’re eligible for these deductions and to keep tabs on how they may change in future years. You will have to itemize your return in order to capture this deduction.
Recommended: What Is a Home Equity Loan?
Alternatives to HELOCs
There are several alternatives to HELOCs, each with its own benefits and drawbacks. It’s worth considering these before you lock in a HELOC.
Home Equity Loan
With a home equity loan, you get a lump-sum loan and a fixed interest rate to keep things simple. You can usually borrow up to 85% of your equity. Lenders look for a credit score of 680 or higher, though many like 700. A big difference between a HELOC vs. a home equity loan is that with a home equity loan, you get the money all at once and begin repaying it immediately. A home equity loan calculator can show you how much you might be able to borrow.
Cash-Out Refinance
A cash-out mortgage refinance lets you borrow more than you currently owe on your mortgage and collect the extra funds in cash. If you have a credit score of 620 or more, and your DTI ratio is under 43%, this option is open to you, with a fixed or variable rate. Just make sure the new rate is better than the one you had before from a cost perspective. One cash-out refinance vs. home equity line of credit differentiator? The former leaves you with just one monthly payment.
Personal Loan
A personal loan is typically unsecured. You repay what you have borrowed in regular, fixed installments over a period of two to seven years. The key benefit here is that your home is not at risk of foreclosure should you encounter financial challenges. Most lenders look for a credit score of 610 or higher. While these loans are relatively quick to secure, the interest rates may be higher compared to HELOCs or home equity loans.
The Takeaway
Before you leap into a HELOC, it’s important to assess the benefits and potential risks. HELOCs can offer financial flexibility and often have lower interest rates than unsecured loans. But you have to be mindful of the risk of losing your home if you falter on payments. So be smart about it. Have a solid repayment plan in place. Another wise move? Seek out rate and term information from multiple lenders before locking in your selection.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
Unlock your home’s value with a home equity line of credit from SoFi, brokered through Spring EQ.
FAQ
What’s the monthly payment on a $50,000 HELOC?
Your monthly payment on a $50,000 HELOC will depend on the interest rate and the repayment terms. During the draw period, if you used the full $50,000 but just made interest payments, your monthly bill at 8.00% would be $333. Once you enter the repayment term of 20 years, the monthly cost would rise to $607. Remember, these are only estimates because HELOCs have variable interest rates.
Is a HELOC the right choice for you?
Whether a HELOC is a good idea right now depends on your financial situation and the current HELOC rates in Asheville. If you need a flexible line of credit for significant expenses and can manage somewhat unpredictable monthly payments, a HELOC might be a good idea.
How hard is it to qualify for a HELOC?
The process of securing a HELOC is quite manageable if you meet the lender’s criteria. At minimum, you’ll need a credit score of 640, a debt-to-income (DTI) ratio under 50%, and home equity of at least 15%. Better numbers will get you better interest rates.
Will a HELOC impact your credit score?
A HELOC can indeed have an impact on your credit score. When you apply for one, you might see a slight decrease in your score due to the hard credit inquiry. However, using the HELOC responsibly — making on-time payments and not spending right up to the credit line — can actually work in your favor, potentially boosting your score. Be sure to manage your HELOC wisely to maintain or improve your credit standing.
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More HELOC resources.
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What is a Home Equity Line of Credit
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Different Types of Home Equity Loans
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HELOC vs Home Equity Loan: How They Compare