AUBURN HELOC RATES TODAY
Current HELOC rates in
Auburn, MA.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Current HELOC rates in
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Compare HELOC rates in Auburn.
Key Points
• Home equity line of credit interest rates in Auburn are influenced by the prime rate.
• HELOCs are revolving lines of credit secured by home equity.
• Your credit score and debt-to-income ratio have a significant effect on your interest rate as well.
• HELOC interest rates vary from lender to lender.
• Online calculators can help you figure out the monthly payments and total costs before you commit.
Introduction to HELOC Rates
If you’re a homeowner, you’re sitting on a potential source of funds that could help you achieve your financial goals: your home equity. In this guide to home equity line of credit (HELOC) interest rates in Auburn, Massachusetts, we’ll cover everything you need to know about how to make the most of your home equity. We’ll discuss what HELOC rates are, what affects them, and how you can find the best rates in your area. Whether you’re considering a home renovation or need funds for personal expenses, this guide will help you make informed financial decisions.
What Exactly Is a HELOC?
A HELOC is a revolving credit line that taps into your home equity, which is the difference between the value of your home and the remaining balance on your home loan. To qualify, you’d typically need at least 15% equity in your home. You can borrow up to 90% of your equity.
The Draw Period
The initial draw period for a HELOC can be up to 10 years. This stage is an important distinction between a HELOC vs. a home equity loan, because with a HELOC, you only have to pay interest on what you’ve borrowed during the draw phase. (With a home equity loan, you get a lump sum and start repaying principal plus interest immediately.) A HELOC interest-only calculator can help you estimate costs at this time.
The Repayment Period
After the draw period comes the 10- to 20-year repayment period when you stop borrowing and start repaying what you owe plus interest. This is when a HELOC monthly payment calculator might be helpful, since HELOCs have variable interest rates that can change, rising (or falling) with market conditions. This means your monthly payment won’t always be the same, so you’ll need to be okay with this uncertainty.
Recommended: Different Types of Home Equity Lending
The Origin of HELOC Interest Rates
HELOC interest rates are pegged to the U.S. Prime Rate, which is under the sway of the Federal Reserve’s policies. Lenders then add a margin to this rate, which is personalized based on your credit score, debt-to-income (DTI) ratio, and the equity in your home. This is why different lenders will offer you different HELOC rates. Being in the know about these factors can help you predict rate changes and decide on the best time to apply for a HELOC.
How Interest Rates Impact HELOC Affordability
Interest rates play a significant role in the affordability of a HELOC. Even a seemingly small rate difference can have a noticeable impact. If you borrow $50,000 with a HELOC, have a 10-year repayment term, and an 8.00% interest rate, your monthly payment would equal $607 and total interest paid would be $22,797. But if you managed to obtain a 7.50% rate, your monthly payment would shrink to $581 and total interest would be $19,665. That’s a savings of over $3,000. (Of course, due to the HELOC’s variable rate, your real-world numbers will differ.)
HELOC Interest Rate Trends
As you explore how to get equity out of your home, you’ll probably start watching the prime rate closely. It’s helpful to have some sense of the recent history of the rate. It hit an unusually low 3.25% in 2020 and a recent high of 8.50% in 2023. This can help put the rates you’re seeing in the current Auburn marketplace into perspective. It also gives you a sense of how much a HELOC’s variable rate can change in a relatively short period of time.
| 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
HELOCs usually come with adjustable interest rates, which are often initially lower than fixed rates but can change over time. While this may sound a bit uncertain, there are some rules around the shifting rate which will be spelled out in your HELOC agreement. You’ll know how often the rate can change and by how much. You can decide if you would be comfortable with the potential shift by plugging some numbers into a HELOC calculator.
Helpful Tools and Calculators
Before you apply for a HELOC, you can estimate your monthly payment and interest costs to determine if your monthly payments will fit into your budget. Try plugging different amounts borrowed and interest rates into the calculators to see if you think you can afford the monthly payments.
Run the numbers on your HELOC.
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Home Equity Loan
CalculatorEnter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
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HELOC Payment
CalculatorPunch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
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HELOC Interest Only
CalculatorUse 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 qualify borrowers for a HELOC, lenders typically look for a minimum credit score of 640, a DTI ratio under 50%, and at least 15% equity in your home. But to obtain the best HELOC rates, you’ll need to polish your credit score and DTI ratio until they shine.
Improve Your Credit Score
To get the best HELOC rates in Auburn, you’ll want a credit score of 700 or better. If you need to increase your score, focus on making payments on time and paying down some credit card balances. It’s also wise to review your credit report for inaccuracies and dispute any you find. Don’t rush to close old credit accounts — they can actually help your credit history. And avoid opening new accounts in the months leading up to your HELOC application.
Calculate Your Debt-to-Income Ratio (DTI)
Your DTI ratio is easy to compute: Tally up your monthly debt payments and divide by your gross monthly income. For the best HELOC rate, you need a DTI ratio below 36%. Get there by paying down debts, seeking out additional income, or both.
Application Process for a HELOC in Auburn
Some lenders offer an online prequalification process for a HELOC, which can make the application process more efficient. By going through this initial step, you can get a better sense of the rates and terms you might qualify for, as well as the amount of equity you could access. You can prequalify with multiple lenders before deciding whether you want to pursue the full application, following these steps:
Step 1: Run the Numbers
Check your credit score to be sure it’s at least 640 and calculate your DTI ratio to verify it’s under 50%. Then assess your home equity: Subtract your current mortgage balance from your home’s estimated value; divide the answer by your home value to arrive at your percentage of equity. As noted above, you need at least 15% equity to move forward.
Step 2: Compare Lenders
Research different lenders to find the best HELOC rates in Auburn. Look at interest rates, qualification requirements, credit line minimums and maximums, fees, and the length of the draw and repayment periods. Each lender has its own terms and conditions, so it’s important to read the fine print.
Step 3: Submit Your Application
For the application itself, you’ll need recent pay stubs, W-2 forms, and tax returns. If you’re self-employed, you may be asked for a profit-and-loss statement and extra tax returns. Have your homeowners insurance policy on hand, as well. Once you’ve got everything together, you can apply online, over the phone, or in person. Doublecheck the information you provide for accuracy to keep the process moving smoothly.
Step 4: Get an Appraisal
An appraisal will determine your home’s value, which will help the lender compute your precise equity level and how much you might borrow with a HELOC. It typically costs between $300 and $600. A prospective lender will tell you what kind of appraisal is required, so wait for those instructions.
Step 5: Prepare for Closing
Before you can access your HELOC funds, you’ll need to sign the documents and pay fees. Some lenders make funds available as soon as three days after the HELOC is closed. Prepare for the closing by giving all the documents a thorough review and making sure you’re clear on the terms and conditions. Have funds ready to cover the closing costs.
Recommended: What Is a Home Equity Loan
Closing Costs and Fees
You’ll be happy to learn that HELOC closing costs are generally lower than those associated with a home purchase or a refinance. Appraisal fees are often the most significant expense. A title search, if required, may run you $100 to $450. You might also encounter application, origination, and administrative fees, as well as annual maintenance fees of up to $250. Some lenders also charge transaction or inactivity fees.
Tax Benefits and Considerations
Homeowners can often deduct the interest paid on a HELOC, but there is a catch: The funds must be used to make significant improvements to your primary residence. And remember, the current tax guidelines are in play for 2025 and may change in the future, though HELOC interest may continue to be deductible. It’s a good idea to chat with a qualified tax advisor to get the full picture and to confirm your eligibility for any deductions related to your HELOC.
Alternatives to HELOCs
If a HELOC doesn’t seem like the right fit for you, or if you just want to explore all your options before committing, here are some other borrowing methods worth looking at:
Home Equity Loan
With a home equity loan, you get a lump sum from the lender and you begin repaying it, with interest, immediately. The repayment term can be as long as 30 years. Usually, you can tap into 85% of your home equity. Lenders look for a credit score of 680 or more, but as with a HELOC, better rates often go to those with a score of 700 or above. As you consider a HELOC vs. a home equity loan, the fact that a home equity loan has a fixed interest rate is a key difference.
Cash-Out Refinance
A cash-out refinance swaps your old mortgage for a new, larger one; you take the difference as cash. This mortgage refinance might be right for you if you can score an interest rate that is an improvement on your current one (remember to factor in closing costs). To qualify, you’ll need a 620 credit score and a DTI ratio of under 43%. When comparing a cash-out refinance vs. a home equity line of credit, the more forgiving credit and DTI numbers on a refi may be attractive.
Personal Loan
A personal loan is a versatile, typically unsecured loan that you repay in regular, fixed installments over a relatively brief term of two to seven years. The key advantage here is that your home is not on the line should you face financial challenges. Lenders like to see a credit score of 610 or more for a personal loan. While they are relatively quick to secure, do note that these loans often come with higher interest rates than either a HELOC or a home equity loan.
The Takeaway
A HELOC is very flexible. You borrow what you need when you need it, and only pay interest on the sum you actually draw from your credit line. Interest rates on an HELOC can often be better than those on a personal loan. But when your home is used as collateral, it’s especially important to make sure you can handle your monthly payments, even with a variable interest rate. Take the time to look at current HELOC rates in Auburn from a variety of lenders so you can find the rate and terms that best suit you.
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 are the benefits of a HELOC?
The beauty of a HELOC is that you can borrow what you need, when you need it vs taking a lump sum. You’ll only be paying interest on the portion of the HELOC credit line that you have actually used. With competitive rates and potential tax benefits if the HELOC is used to fund home improvements, it’s a smart way to finance various needs, from sprucing up your home to consolidating debt. It’s also a benefit to some borrowers that during the HELOC’s initial draw period, they only pay interest (vs. paying both principal and interest). This delays the repayment process by up to a decade.
What could prevent you from securing a home equity loan?
There are a few factors that could disqualify you from securing a home equity loan. Most lenders look for a credit score in the upper 600s, a DTI ratio of 50% or less, and a minimum of 15% equity in your home. If you don’t meet these criteria, you might need to work on improving your financial profile or explore other financing sources.
How hard is it to get a HELOC?
Getting a HELOC is within reach if you meet the lender’s criteria. Typically, you need a credit score of 640 or more, a DTI ratio below 50%, and at least 15% equity in your home. The process involves selecting a lender with competitive HELOC rates, filling out an application, getting an appraisal to evaluate your home’s value, and carefully reading the HELOC agreement to understand terms and conditions.
How does a HELOC affect my credit score?
The process of opening a HELOC can have a temporary negative impact on your credit score due to the hard credit inquiry a prospective lender will do. However, managing your HELOC responsibly and making timely payments will boost your score (missed payments have the opposite effect, of course).
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SOHL-Q225-407
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