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• Home equity line of credit interest rates are influenced by the prime rate and borrower-specific factors.
• HELOCs offer a revolving line of credit, with interest-only payments during the draw period.
• The draw period is usually 10 years, with a subsequent repayment window of 10 to 20 years.
• With HELOCs’ variable interest rates, monthly payments can change periodically.
• A HELOC can be used to fund home improvements, consolidate debt, or cover other significant expenses.
Introduction to HELOC Rates
If you’re thinking about how to get equity out of your home in Jacksonville, Florida, this guide to home equity line of credit (HELOC) rates in Jacksonville, Florida, will help you make smart choices. We’re here to help you navigate the current market conditions and secure the best rates for your needs. We’ll delve into the factors that influence HELOC rates, the benefits and potential risks of these financial tools, and how to effectively compare different lenders. Armed with this knowledge, you’ll be well-prepared to make an informed decision about borrowing.
What Exactly Is a HELOC?
A HELOC is a revolving credit line that’s secured by your home equity (the value of your home less the balance you owe on your home loan). To qualify for a HELOC, you’ll typically need to have at least 15% equity in your home. You may be able to borrow up to 90% of your equity. HELOCs have two main phases:
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 Origins of HELOC Interest Rates
HELOC interest rates are tied to the prime rate, which is affected by Federal Reserve policies. Lenders add a margin to the prime rate to determine their individual HELOC rate. But the rate you’re offered by a lender can also be affected by your credit score, debt-to-income (DTI) ratio, and the amount of equity you have in your home. This is why it’s so important to seek out quotes from multiple lenders to see what you’ll be offered before signing on to a HELOC.
How Interest Rates Impact HELOC Affordability
HELOCs’ variable interest rates make it hard to say with absolute certainty how much interest you’ll pay when borrowing using a HELOC. But if you borrowed $100,000 with a HELOC that 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, and total interest paid of $86,072, $100,746, and $115,934. A single percentage point may not seem like much in the broad scheme of things, but in the world of interest rates, it’s a big deal.
HELOC Interest Rate Trends
While there’s no crystal ball that can help you predict interest rates, keeping an eye on the prime rate can offer a glimpse into where HELOC rates in Jacksonville may be headed. Having some knowledge of the history of rates can also provide perspective on the rates you’re seeing in the current market. The prime rate hit a low of 3.25% in 2020 and a high of 8.50% in 2023. Some borrowers may be tempted to wait for a super-low rate, but it may not be feasible for most. Instead, you’re better off doing everything you can to qualify for the lowest available rate — more on that below.
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 usually have adjustable interest rates, meaning they can change in response to market conditions. This fluctuation can lead to varying monthly payment amounts. But even variable rates have some built-in controls, and a HELOC agreement will spell out how often a rate can change and how far it can swing. The agreement will also disclose a rate cap. As long as you feel you can repay the debt within these parameters, you will likely be comfortable moving forward.
Before you take the plunge and apply for a HELOC, you can use online calculators to compute what your monthly payment would be at varying interest rates and with or without paying down the principal. Here are three especially useful tools:
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
You know you need 15% equity in your home to qualify for a HELOC. To determine your equity percentage, simply subtract your mortgage balance from your home’s estimated value, then divide the product by your home value. If you are at 15% or better, follow these steps to see how your credit score and DTI ratio measure up.
Improve Your Credit Score
A credit score of 640 or more will help you qualify for a HELOC, but a 700 or above is your ticket to the best available HELOC rate in Jacksonville. The good news is, you have the power to boost your score. Making payments on time and reducing credit card balances can work wonders. And don’t forget to keep an eye on your credit report, disputing any errors you find. Avoid opening new credit accounts or closing old ones in the months leading up to your HELOC application.
Calculate Your Debt-to-Income (DTI) Ratio
Your DTI ratio is a simple division: Tally up your monthly debt payments and divide them by your gross monthly income. Most HELOC lenders prefer a DTI below 50%, but the lower, the better. And for the best interest rate you‘ll want to aim for 36% or less. You can get there by paying down debt, increasing your income, or both.
Current HELOC rates by state.
Compare current HELOC interest rates by state and find a HELOC rate that suits your financial goals.
Select a state to view current rates:
Application Process for a HELOC in Jacksonville
Many lenders offer an online prequalification process for a HELOC, which can streamline the application process. Prequalification typically requires you to provide some basic financial information. In return, it can give you a preliminary idea of your borrowing capacity and potential interest rates, which can help you decide if you want to proceed through these steps:
Step 1: Run the Numbers
Check your credit score and calculate your DTI ratio as detailed above to see where you stand. Make sure you meet the minimum equity threshold of 15%.
Step 2: Compare Lenders
Take a look at the rates in Jacksonville. Compare qualification requirements, credit minimums and maximums, fees, and the length of the draw and repayment periods. Watch for lenders that offer competitive rates and flexible terms. Reading customer reviews can also inform your decision.
Step 3: Submit Your Application
Gather proof of identification, 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. Once you have everything at hand, 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 that’s required. 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 closing. Before you sign on the dotted line, be sure you understand all the terms and conditions.
Closing Costs and Fees
HELOC closing costs are generally lighter than those associated with a home purchase or refinance. The appraisal fee, which can range from $300 to $600, is often the most significant expense. A title search may cost between $100 and $450. You might also encounter application, origination, and administrative fees, as well as annual maintenance fees that could go up to $250.
Homeowners can deduct HELOC interest from their 2025 taxes if the borrowed funds are used to improve their primary residence. Consult a tax advisor to see if you qualify for a tax deduction based on the specific use of the HELOC. Understanding the potential tax benefits — including what deduction may be available in 2026 and beyond — can help you make a more informed financial decision.
Alternatives to HELOCs
If variable interest rates aren’t your style or if you’ve been considering a refinance, you might look into other borrowing methods. These are the most common alternatives to a HELOC:
Home Equity Loan
With a home equity loan, you get a lump-sum loan at a fixed interest rate. You can usually borrow up to 85% of your home equity. Lenders often look for a credit score of 680 or higher, with many leaning toward 700. A difference between a HELOC and a home equity loan is that with the latter, you get the money all at once and begin repaying it immediately. A home equity loan calculator can show you what you might be able to borrow.
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 just 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 a period of two to seven years. Many lenders look for a credit score of 610 or higher for these loans, which is more forgiving than the standard for a HELOC or home equity loan. While they’re relatively speedy to secure, personal loans’ interest rates may be higher than those of HELOCs.
The Takeaway
When you’re considering a HELOC, first weigh the benefits and potential risks. HELOCs offer financial flexibility and lower interest rates than personal loans, but the stakes are high — you could lose your home if you default. Understanding how HELOC rates work and comparing them with other borrowing options can help you make an informed decision.
SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.
Unlock your home’s value with a home equity line of credit from SoFi, brokered through Spring EQ.
A HELOC can be used for a number of different purposes, including home renovations, medical expenses, and debt consolidation. The benefits of a HELOC include flexibility in borrowing — you can borrow funds as you need them and initially only pay interest on the amount that you’ve borrowed.
What would the monthly payments be on a $50,000 HELOC?
Your monthly payment on a $50,000 HELOC will vary according to its interest rate and terms. During the draw period, you might only need to pay interest, which can be quite manageable. For instance, at a 7.00% interest rate, your monthly interest-only payment would be approximately $292. But keep in mind, once the repayment period kicks in, you’ll be paying both principal and interest, so your monthly expense will increase. A HELOC’s variable interest rate can make it difficult to predict a precise payment amount.
Is there an appraisal for a HELOC?
Yes, you typically need a home appraisal to get a HELOC. The appraisal helps a lender determine the current market value of your home, which is used to calculate the ceiling on your credit line
What might disqualify you from getting a home equity loan?
A few factors could potentially 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 20% 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.
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