DENVER HELOC RATES TODAY
Current HELOC rates in
Denver, CO.
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 interest rates in Denver are based on the prime rate, lender margins, and each borrower’s financial stats.
• A HELOC gives you a revolving line of credit at a competitive interest rate.
• To qualify, you’ll generally need 15% equity in your home and a credit score of 640 or better.
• You can use a HELOC for a variety of purposes, including home improvements, education costs, and debt consolidation.
• HELOCs’ variable interest rates can make payments unpredictable, and defaulting could lead to foreclosure.
Introduction to HELOC Rates
Welcome to your comprehensive guide to home equity line of credit (HELOC) rates in Denver, CO. If you’re a homeowner in the Mile High City, you may be in a good place to get equity out of your home with a HELOC — but it helps to understand the current market conditions and the factors that influence the interest rate you’ll be offered. We’ll walk you through how to compare different lenders, the benefits and risks of HELOCs, and how to qualify for a competitive rate. Whether you’re planning a home renovation or need funds for other significant expenses, this guide will equip you with the knowledge to make an informed decision.
What Exactly Is a HELOC?
A HELOC is a revolving line of credit that uses your home equity (the value of your home less the amount you owe on your home loan) as collateral. Most lenders require you to have 15% equity in your home before you can sign on to a HELOC. You can typically borrow up to 90% of your equity. It’s important to understand that if you don’t make your HELOC payments, your lender could foreclose on your home. There are two phases to a HELOC, and the payments are different in each so let’s break it down:
The Draw Period
With a HELOC, you’re given a credit limit and a draw period. The draw period can last up to 10 years, and during this time you can borrow, repay (if you wish), and borrow again. Typically, you are only required to make interest payments during the draw period.
The Repayment Period
After the draw period, you’ll enter a repayment period of up to 20 years. You can’t borrow any more, and you’ll need to begin making monthly payments that include principal and interest. A HELOC’s variable interest rate means the amount of your payment can fluctuate.
The Origin of HELOC Interest Rates
Lenders set HELOC interest rates based on the prime rate, which is influenced by the Federal Reserve’s policies. Each lender then tacks on its own margin, which is why rates can vary. Your personal financial factors, such as credit score, debt-to-income (DTI) ratio, and home equity level, also come into play. Given that there are so many variables, it’s important to seek out rate quotes from multiple lenders, especially since lenders’ terms and policies can vary as well.
How Interest Rates Impact HELOC Affordability
Even a seemingly small fluctuation in your HELOC interest rate can have an impact on your monthly budget. HELOCs’ variable interest rates make it hard to know the exact amount a HELOC will cost, but if you borrowed $100,000 with a HELOC and had a 20-year repayment term, you would have the following monthly payment amounts at 7.00%, 8.00%, and 9.00% interest: $775, $836, and $900, respectively. Your total interest paid would be $86,072, $100,746, and $115,934.
HELOC Interest Rate Trends
While we can’t predict the future, looking at the prime rate and listening to news of its movements can help give you a sense of where HELOC rates will soon be. And having a sense of the history of the prime rate can help you understand whether current market rates are relatively low or high. The prime rate sank to a low of 3.25% in 2020 and rose to a high of 8.50% in 2023.
| 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
Variable (also called adjustable) rates are the typical option for HELOCs. The idea that your interest rate might bounce around can be disconcerting, but if you sign on to a HELOC, the agreement will specify how frequently the rate can change, how much it can rise or fall, and what the HELOC’s overall rate cap will be.
Recommended: Different Types of Home Equity Lending
Helpful Tools and Calculators
One way to assess your comfort level with variable interest rates is to compute what your monthly payments would look like at different interest rates and for different lending amounts. You can use online calculators to do that and more.
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
Follow the advice below to secure a competitive HELOC rate. But first, make sure you have at least 15% equity in your property: Subtract your mortgage balance from your home’s estimated value. Then divide the product by the estimated value to get a percentage of equity.
Improve Your Credit Score
Keeping your credit score at 700 or higher is one key to getting the best HELOC rates, though you can qualify for a HELOC with a score as low as 640. Take the reins by paying your bills on time and whittling down credit card balances. Give your credit report a once-over for any errors that might be holding you back — disputing them can make a real difference. Avoid opening new credit accounts or closing old ones in the months leading up to your application.
Calculate Your Debt-to-Income (DTI) Ratio
Your DTI ratio is a simple concept: It’s the total of your monthly debt payments divided by your gross monthly income. Most HELOC lenders prefer a DTI that’s under 50%, but naturally, the lower, the better. A ratio of 36% or less will position you best for great rates. You can lower your number by paying down debt, increasing your income, or both.
Application Process for a HELOC in Denver
The application process for a HELOC in Denver can be streamlined by prequalifying online, which can save time. This approach allows you to get an initial idea of the HELOC rates available in Denver. You can also see the amount you might qualify for without undergoing a hard credit pull initially. Once prequalified, you can then proceed with the full application. This subsequent step will involve providing more detailed financial information and specifics about the property.
Step 1: Run the Numbers
First things first, check your credit score and calculate your DTI ratio. Then, assess your home equity: Subtract your outstanding mortgage balance from your home’s estimated value. Then divide the answer by your home value to arrive at a percentage. Making regular mortgage payments helps build equity. Home improvements that boost the property’s value can increase equity, too.
Step 2: Compare Lenders
Take a look at the rates in Denver and the general HELOC rates out there. Carefully compare qualification requirements, credit minimums and maximums, any associated fees, and the length of both the draw and repayment periods. Keep an eye out for lenders that offer competitive rates and flexible terms. Reading customer reviews and thoroughly checking lender reputations can also help you make a more informed decision.
Step 3: Submit Your Application
Now it’s time to gather all the necessary paperwork. This includes proof of identification, income verification, and property information. For income verification, you’ll need to provide your most recent pay stubs, W-2 forms, and complete tax returns from the previous year. If you’re self-employed, you may also need to provide a profit-and-loss statement and your tax returns from the past two years. Additionally, you’ll need to provide a homeowners insurance declaration page as part of the property documentation. Once you have everything you need, you can submit your application online, over the phone, or in person.
Step 4: Get an Appraisal
After you submit an application and solidify your choice of lender, you’ll likely need an appraisal. Work with the lender to ensure you get the appraisal and documentation the lender requires.The typical cost of having a pro weigh in on the value of your home is usually between $300 and $600. If your home is appraised for more than what you owe, you’ll have cleared a bar necessary for a HELOC.
Step 5: Prepare for Closing
Once you’re approved for a HELOC and decide to move forward, you’ll need to sign the HELOC documents and take care of any associated fees. Most lenders will make the funds available within three business days of the HELOC closing. Before you sign on the dotted line, be sure you understand all the terms and conditions. This is an important step to avoid any surprises and to make sure you’re prepared to use your HELOC.
Closing Costs and Fees
The good news is that HELOC closing costs are generally more wallet-friendly than those associated with a home purchase or a refinance. The appraisal fee is often the steepest cost you’ll encounter. Other potential expenses include application fees, loan origination fees, and administrative costs. Some lenders may also have a yearly maintenance fee, which could be up to $250. Keep an eye out for transaction fees, inactivity fees, and early termination fees, as they might also be in the mix.
Recommended: HELOC vs. Home Equity Loan
Tax Benefits and Considerations
Homeowners can deduct interest on a HELOC for the 2025 tax year, but only if the borrowed funds are used to substantially improve the home. You can consult a tax professional to understand the specific tax implications and confirm your eligibility for a deduction related to a HELOC. Your tax advisor can also help keep you updated on changes in tax policy for 2026 and beyond.
Alternatives to HELOCs
There are other financing options besides HELOCs, including home equity loans, cash-out refinancing, and personal loans. Each has its own set of requirements and benefits.
Home Equity Loan
With a home equity loan, you get a one-time lump-sum loan at a fixed interest rate. You can usually borrow up to 85% of your equity. Lenders look for a credit score of 680 or higher, though 700 is preferred. If you like the predictability of a fixed interest rate, this might be a good fit. With a home equity loan, you get the money all at once and begin repaying it immediately. A home equity loan calculator can help you assess your borrowing power.
Cash-Out Refinance
A cash-out mortgage refinance lets you borrow against your home’s equity by trading your existing mortgage for a new, larger one. You’ll pocket the difference to use as you wish. 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 fixed or variable rates. A cash-out refinance vs. home equity line of credit point of difference? The former leaves you with one monthly payment.
Personal Loan
A personal loan is typically unsecured, so you don’t risk foreclosure if you find yourself unable to make payments. It’s typically repaid in regular, fixed installments over two to seven years. Many lenders look for a credit score of 610 or higher for these loans, so this is an option if you think you can’t qualify for a HELOC. While they’re relatively speedy to secure, personal loans’ interest rates may be higher than those of HELOCs.
The Takeaway
As you mull over the idea of a HELOC, consider the pros and cons. It’s nice to be able to borrow as you need funds and only pay interest initially. But remember, your home is on the line if you don’t keep up with payments. Be sure to shop around for the best rates and terms to find the HELOC plan that works best for 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 can a HELOC be used for?
A HELOC 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.
Do you need an appraisal for a HELOC?
The appraisal is a critical step in the process of obtaining a HELOC. It helps the lender understand the value of your home, which in turn determines the amount of equity you have available to borrow.
How tough is it to secure a HELOC?
Getting approval for a HELOC isn’t hard if you meet the lender’s criteria. Lender requirements vary, but the basic prerequisites are a credit score of at least 640, a debt-to-income ratio below 50%, and a home equity level of 15%. The best interest rates go to those with a credit score of at least 700 and a DTI ratio of 36% or less. The application process includes submitting financial records and arranging for a home appraisal.
How does a HELOC affect your credit score?
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. Missing payments or maxing out your HELOC can be detrimental, however.
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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.
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SOHL-Q225-410
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