COLUMBUS HELOC RATES TODAY
Current HELOC rates in
Columbus, OH.
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 in Columbus, Ohio, are determined based on the prime rate, your credit score, debt-to-income ratio, and the amount of equity in your home.
• HELOCs offer a revolving line of credit, with interest charged only on the amount borrowed.
• Online calculators can help borrowers estimate monthly payments and total interest costs before applying.
• You may be able to deduct the interest you pay on a HELOC.
• Before offering you a HELOC, your lender will require a home appraisal.
Introduction to HELOC Rates
This article will give you a comprehensive understanding of home equity line of credit (HELOC) rates in Columbus, Ohio. By the time you’re through, you’ll be well versed in the factors that sway HELOC rates, the advantages and potential pitfalls of these financial tools, and how to sift through various lenders to find the best fit for your needs. Armed with this knowledge, you’ll be ready to make a well-informed decision and approach the application process with confidence.
What Is a HELOC?
A HELOC is a smart way to leverage the equity you’ve built up in your home by paying down your home loan. (Your equity is the difference between your home’s value and the remaining mortgage balance.) With a HELOC, you can borrow up to 90% of your equity. You can use a home equity loan calculator to determine how much you might borrow. There are two phases to a HELOC.
A HELOC has two phases, each with different parameters:
The Draw Period
During the draw period, typically 10 years, you can access funds in increments as needed and only make interest payments. You can use a HELOC interest-only calculator to see what those payments might look like. Remember that because the HELOC is secured by your home, not making payments may result in foreclosure.
The Repayment Period
After the draw phase ends, a repayment period of 10 to 20 years begins. Now you’ll pay back the principal with interest. HELOCs have adjustable interest rates, which mean your monthly payment amount may change many times. You can estimate payments with a HELOC monthly payment calculator.
Where Do HELOC Interest Rates Originate?
HELOC interest rates are tied to the prime rate, which in turn is influenced by the Federal Reserve’s policies. Each lender adds a margin to the prime rate, creating the range of HELOC rates you see in the market. Lenders also take into account individual borrower factors, such as credit score, debt-to-income (DTI) ratio, income, and the amount of equity in the home. This is why it’s important to seek out rates from multiple lenders before you settle on a lender to partner with for your HELOC.
How Interest Rates Impact HELOC Affordability
The interest rate on your HELOC can make a big difference in how affordable it is. Even a small change in the interest rate can add up to a lot of extra interest over the life of the loan. For example, on a $50,000 HELOC with a 20-year term, a one-percentage-point rate increase from 7.00% to 8.00% can bump your monthly payment up by $30 and increase the total interest paid over the life of the HELOC by almost $7,000.
Recommended: HELOC vs. Home Equity Loan
HELOC Interest Rate Trends
When you’re thinking about how to get equity out of your home, you’ll probably start paying close attention to the prime rate. Doing so may shed some light on what to expect with HELOC rates in Columbus. Having a sense of the history of the prime rate can also help give you some perspective on the rates you are seeing. The prime rate hit a low of 3.25% in 2020 and a high of 8.50% in 2023.
Historical Prime Interest Rate
| 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 variable (also called adjustable) interest rates, which track the prime rate’s ups and downs. As the prime rate shifts, so will your HELOC rates, at intervals and within limits that are spelled out by your HELOC agreement.
Helpful Tools & Calculators
Before you apply for a HELOC, you can use online tools to estimate monthly payment and total interest costs. Here are three of our favorite tools:
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 secure an attractive HELOC rate, it’s all about the numbers. Make sure you have at least 15% equity in your home (ideally more) and from there, focus on boosting your credit score and keeping your debt-to-income (DTI) ratio low. Here are the details:
Improve Your Credit Score
You’ll need a credit score of 700 or above to qualify for the most attractive HELOC rates in Columbus. The good news is, you have the power to boost your score. Make all your payments on time and reduce your credit card balances. Also check your credit report for any inaccuracies and dispute them if needed. Keep old credit accounts open and use them responsibly, but avoid opening new accounts in the run up to your HELOC application.
Calculate Your Debt-to-Income (DTI) Ratio
Your DTI ratio is the total of your monthly debt payments divided by your gross monthly income. To get a HELOC, you’ll need a DTI under 50%, but for the best interest rates in Columbus, aim for 36% or lower. To improve your DTI, reduce your debts, increase your income or both.
Application Process for a HELOC in Columbus
Some lenders offer the option to prequalify for a HELOC through their online portal, which can make the application process more streamlined. Prequalifying can give you an idea of the HELOC rates in Columbus that you might be able to get, as well as the amount of equity you could potentially access. Prequalifying involves providing some basic financial information and can be done fairly quickly, which can help you make more informed decisions before you formally apply by following these steps.
Step 1: Run the Numbers
Before you take the plunge with a HELOC, it’s wise to take a good look at your finances. 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 lender in Columbus, compare rate quotes from multiple lenders. Also look at qualification requirements, minimum and maximum amounts you can borrow, fees, and the length of the draw and repayment periods. Because the terms can vary from lender to lender, it’s important to shop around.
Step 3: Submit Your Application
To fill in an application, 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 application online, over the phone, or in person.
Step 4: Get an Appraisal
A home appraisal is a professional’s objective analysis of your home’s value. Your lender will tell you what kind of appraisal is required. The cost typically ranges from $300 to $600. If your home appraises for more than your existing mortgage balance, the lender is much more likely to approve you for a HELOC. This step is important in determining the amount of equity you can potentially access and the specific terms of your HELOC agreement.
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. Some lenders make the funds available to you right after the closing; others may take a few days. 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.
Recommended: Different Types of Home Equity Loans
Closing Costs and Fees
The good news is that HELOC closing costs are generally more affordable than those associated with a home purchase or refinance. In addition to the appraisal fee, you might encounter application, origination, title search, and administrative costs, as well as annual maintenance fees that could be as much as $250.
Tax Benefits and Considerations
As a homeowner, you can take advantage of deducting HELOC interest when the funds are used to substantially improve your primary residence. The current tax laws are in effect through 2025. To understand the tax implications and confirm your eligibility for HELOC-related deductions this year or in the future, it’s best to consult with a tax advisor.
Alternatives to HELOCs
Other financing options to consider before committing to a HELOC are home equity loans, cash-out refinancing, and personal loans. Let’s take a closer look at each of these options.
Home Equity Loan
Home equity loans provide borrowers with a lump-sum loan at a fixed interest rate. You can typically borrow up to 85% of your home’s equity. Lenders usually look for a credit score of 680 or more, with many favoring 700 and above. This option is great if you have a specific need for a defined amount of money and prefer the predictability of fixed monthly payments.
Cash-Out Refinance
A cash-out mortgage refinance lets you borrow against your home’s equity by refinancing your mortgage for more than you currently owe and pocketing the difference. This option is particularly handy when you need a one-time lump-sum loan. To qualify, you’re generally looking at a credit score of 620 or higher, and a debt-to-income ratio under 43%. You can choose between fixed or variable rates. A 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 a versatile, typically unsecured loan that you repay in regular, fixed installments over a period of two to seven years. The key benefit here is the security of your home — there’s no risk of foreclosure if financial challenges arise. Most lenders look for a credit score of 610 or higher when considering a personal loan application. While the process is often swift, it’s essential to note that personal loans can carry higher interest rates than HELOCs or home equity loans.
The Takeaway
HELOCs are a flexible way to tap into your home’s equity for large expenses, debt consolidation, or home improvements. Keep in mind that if you miss payments, your home could be at risk of foreclosure. HELOC rates can vary, so shop around among different lenders. The interest you pay may be tax-deductible if you use the money for home improvements.
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 can be used for a variety of things, including home renovations, personal expenses, and debt consolidation. It offers flexibility, allowing you to draw funds as needed during the draw period and pay interest only on the amount used. This makes it a versatile tool for managing your financial needs, especially when HELOC rates in Columbus are favorable.
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 a smart move?
Whether a HELOC is a good idea right now depends on your financial situation and the current HELOC rates in Columbus. If you need a flexible line of credit for significant expenses and can manage somewhat unpredictable monthly payments, a HELOC might be a smart choice.
What could stop you from getting a home equity loan?
There are a few things that could stand in the way of you obtaining a home equity loan or a home equity line of credit. You need to have at least 15% equity in your home, for one thing, and some lenders require 20% equity. You’ll also need to meet a lender’s credit-score requirements and have a healthy debt-to-income ratio.
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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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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