BOISE HELOC RATES TODAY
Current HELOC rates in
Boise, ID.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Current HELOC rates in
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Key Points
• Home equity line of credit rates are influenced by the prime rate, your credit score, and your home equity level.
• Keeping an eye on prime rate trends can help you anticipate rate changes.
• Use online calculators to get an idea of what monthly payments and total interest costs might look like.
• HELOCs let you borrow as you need funds instead of accepting a large lump sum all at once.
• Defaulting on payments could lead to foreclosure.
Introduction to HELOC Rates
A home equity line of credit (HELOC) is a popular way for homeowners to access the equity in their home. This article will provide a comprehensive overview of HELOC rates in Boise, Idaho, and help you understand how these rates are set. We’ll discuss the key factors that influence HELOC rates, the benefits and drawbacks of HELOCs, and how to compare different lenders to find the best deal. By the end, you’ll have a clear understanding of whether a HELOC is the right financial tool for you, plus concrete tips on how to strengthen your application.
What Exactly is a HELOC?
A HELOC is a revolving credit line secured by the equity in your home (your home value minus what you owe on your home loan). Lenders typically require you to have at least 15% equity in your home. You can borrow up to 90% of that equity. But take note: When your home is the collateral for borrowing, it is critically important that you keep on top of your payments. Otherwise the lender could foreclose. Make sure you understand how payments work in a HELOC’s two phases:
The Draw Period
In the HELOC’s initial draw phase, typically 10 years, you can borrow money as you need it, up to whatever credit line your lender has established. Most lenders only require you to pay interest on what you have borrowed during this time. HELOCs have variable interest rates, and you’ll probably find a HELOC interest-only calculator to be a useful tool.
The Repayment Period
Once you enter the repayment period, you’ll stop borrowing and start making monthly payments of both principal and interest. Again, the interest rate is variable, so payments aren’t always predictable. A HELOC monthly payment calculator can help you estimate what you might owe depending on the amount you’ve borrowed and your current rate.
Recommended: HELOC vs. Home Equity Loan
The Source of HELOC Interest Rates
HELOC interest rates are pegged to the prime rate, which is influenced by the Federal Reserve’s monetary policies. Each lender adds a margin to this rate, contributing to the variation in HELOC rates you’ll see when you seek out rate quotes from multiple lenders (and you should do this). Additionally, lenders consider individual factors such as your credit score, debt-to-income (DTI) ratio, and the amount of equity in your home.
How Interest Rates Impact HELOC Affordability
It’s easy to underestimate how much a small rate change can affect your HELOC’s affordability. Imagine that you have a $50,000 HELOC and borrow the full amount at 8.50%, repaying it over 15 years. In this case, your monthly payments would be $492 during the repayment period and your total interest paid would be $38,627. But at a 9.50% rate, the monthly payments would be $522 and the total interest would be $43,980. HELOC rates are variable so your actual results will be different.
HELOC Interest Rate Trends
Keeping an eye on the prime interest rate can be a smart move when considering a HELOC. Since 2018, this rate has seen its ups and downs, hitting a low of 3.25% in 2020 and a peak of 8.50% in 2023. Having a sense of the range of rates is helpful when you are considering a variable-rate HELOC. And being somewhat versed in the rate’s history can put current rates into perspective.
| 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
Now, let’s talk about how those variable rates work, exactly. Also called adjustable rates, they will change periodically, according to a schedule spelled out in your HELOC agreement. It’s not entirely the Wild West. The agreement will also detail how much the rate can change, so you’ll go into a HELOC with some sense of how high your interest rate might rise (or fall) with the market. To determine if your budget can accommodate a rate increase, it helps to play around with different borrowed amounts and interest rates in a HELOC calculator.
Helpful Tools and Calculators
Before you take the leap and apply for a HELOC, online calculators can give you a sense of what your monthly payments and interest costs might look like. Here are three useful tools.
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 land a competitive HELOC rate, you’ll want to focus on cultivating a good credit score and keeping your debt-to-income (DTI) ratio in check. Most lenders look for a credit score of 640, a DTI ratio under 50%, and at least 15% equity to qualify an applicant for a HELOC. But here’s how you can exceed expectations and set yourself up for the best possible interest rate.
Improve Your Credit Score
Keeping your credit score at 700 or more is the key to unlocking the best HELOC rates. Making on-time payments and chipping away at credit card balances can help you get there. Be sure to review your credit report for any inaccuracies and dispute them if needed. And here’s a pro tip: Leave old credit accounts open and use them responsibly and avoid opening new credit accounts in the months leading up to your HELOC application.
Calculate Your Debt-to-Income Ratio (DTI)
Your DTI ratio is a simple equation: your monthly debt payments divided by your gross monthly income. To get the best HELOC rates, you’ll want to aim for a DTI ratio under 36%. Tally up your monthly debt payments, including your car loan payment(s) and credit card minimums, then divide by your gross monthly income. If you need to reduce your DTI, try to pay off some debt or increase your income (or, better yet, do both).
Application Process for a HELOC in Boise
The process of applying for a HELOC in Boise is made easier when you prequalify online. This step allows you to see the potential rates and terms you might be eligible for. The prequalification process typically only requires you to provide some basic financial information. The full application process is a bit more intense. Here’s a rundown:
Step 1: Run the Numbers
Before you file a HELOC application, make sure you have at least 15% equity. Subtract what you owe on your mortgage from your home’s estimated value. Then divide the product by your home value for a percentage of equity. Also make sure your credit score and DTI ratio at least meet the minimums spelled out above (640 for the former, 50% for the latter).
Step 2: Compare Lenders
Examine the estimates you obtained during prequalification, or seek out offers now. Don’t just compare interest rates. Also look at qualification requirements, minimum and maximum credit lines, fees, and the length of the draw and repayment periods. Each lender will have different terms, so it’s important to examine all of these factors to make sure you choose the best fit for your financial situation and needs.
Step 3: Submit Your Application
Pull together your ID, proof of income, and details about the property you’re using as collateral. For income, you’ll usually need to show your most recent pay stubs, W-2s, and tax returns. If you’re self-employed, you might need to provide a profit-and-loss statement and your tax returns from the last two years. For your property, you’ll need a homeowners insurance declaration page. Once you’ve got everything together, you can start your application online, over the phone, or in person.
Step 4: Get an Appraisal
It’s likely that the lender you apply to will require this step, in which a pro visits your home, gives it a good look, and then crunches the numbers to see what it’s worth in today’s market. The cost? Usually between $300 and $600. If your home’s value comes in higher than what you owe, to the point that you meet the minimum equity needed for a HELOC, your lender could give you the green light. This step is key in nailing down how much equity you can tap into and the terms you’ll score.
Step 5: Prepare for Closing
Before you can use your HELOC, you’ll need to sign the HELOC documents and pay some fees. The good news is that many lenders can get you access to your funds in as little as three days after closing. But before you sign on the dotted line, make sure you understand all the terms and conditions in the agreement.
Recommended: Different Types of Home Equity Lending
Closing Costs and Fees
The good news is that HELOCs generally come with lower closing costs than your typical home purchase or refinance. The most substantial expense is often the appraisal fee. Other costs may include a title search fee ($100 to $450), application fees, origination fee, and administrative fees. Some lenders might also have an annual maintenance fee, which could be up to $250, and transaction fees for withdrawals. Keep in mind that while some lenders may offer to reduce or waive closing costs, this could mean a higher interest rate for you.
Tax Benefits and Considerations
As a homeowner, you could be eligible to deduct the interest from your HELOC on your taxes, but only if the borrowed funds are used for specific purposes, such as making significant improvements to your primary residence. This tax benefit is currently valid through 2025. It’s a good idea to consult a tax advisor to help confirm your eligibility for any deductions related to HELOCs. A tax advisor will also help you keep your eye on how tax policies might change in 2026 and beyond.
Alternatives to HELOCs
You have other ways to get equity out of your home besides a HELOC, including a special type of mortgage refinance. And a personal loan is another option — one that doesn’t entangle your home as collateral at all. Consider these possibilities if you’re at all uncertain about a HELOC.
Home Equity Loan
With a home equity loan, you’ll get a one-time lump-sum loan instead of a line of credit. This loan usually has a fixed interest rate. In most cases, you can borrow up to 85% of your home equity. (A home equity loan calculator can help you see how much you might be eligible to borrow.) Lenders look for a minimum credit score of 680. If you’re someone who likes the predictability of a fixed interest rate, this might be a good fit for you.
Cash-Out Refinance
A cash-out mortgage refinance is another method you can use to borrow based on your equity. In this case, you would refinance your mortgage for more than you currently owe and pocket the difference. Typically, you’ll need a credit score of 620 or higher and a DTI ratio below 43%. If you are thinking about a cash-out refinance vs. a home equity line of credit, one difference is that with a refi, you can choose a fixed or variable interest rate.A personal loan is typically unsecured and repaid in regular, fixed installments over a relatively 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. Lenders like to see a credit score of 610 or higher when considering a personal loan application. While the process is relatively swift, personal loan interest rates are often higher than those of HELOCs or home equity loans.
Personal Loan
A personal loan is typically unsecured and repaid in regular, fixed installments over a relatively 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. Lenders like to see a credit score of 610 or higher when considering a personal loan application. While the process is relatively swift, personal loan interest rates are often higher than those of HELOCs or home equity loans.
The Takeaway
As you mull over the idea of a HELOC, it’s smart to consider the pros and cons. HELOCs are fantastic for their flexible access to funds and competitive rates, but the stakes are high. Defaulting on payments could mean losing your home. Always take the time to shop around and compare offers from multiple lenders, ensuring you walk away with the most competitive rate and terms that fit your financial objectives.
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 can a HELOC be used for?
A HELOC is a versatile financial tool that can be used for a variety of expenses, from home improvements to debt consolidation. It provides a flexible line of credit, allowing you to withdraw funds as needed during the draw period, typically 10 years, and make interest-only payments. This makes it useful for managing ongoing expenses or large projects that have unpredictable costs.
What would be the monthly payment for a $100,000 HELOC?
The monthly payment on a $100,000 HELOC can vary greatly depending on the interest rate and the repayment period. During the draw period, which can last 5, 10, or even 20 years, you may only need to pay interest on the amount you’ve borrowed, which isn’t necessarily going to be the full $100,000. If you did use the entire credit line of $100,000, your interest rate for repayment would likely be a variable one. But at an average of 8.00% and a repayment term of 20 years, you would pay $836 per month.
Do you need an appraisal for a HELOC?
An appraisal is typically required for a HELOC. This step is crucial as it determines your home’s current market value, which in turn helps to calculate the amount of equity you can borrow against. Getting a professional appraisal according to your lender’s instruction is key to securing the best HELOC terms.
Will a HELOC affect your credit score?
The mere act of opening a HELOC can cause a slight dip in your credit score due to the necessary hard credit inquiry by a prospective lender. But use your HELOC responsibly — make timely payments and keep balances in check — and you may actually see an improvement in your score. On the flip side, missing payments or maxing out your HELOC can be detrimental.
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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