MILWAUKEE HELOC RATES TODAY
Current HELOC rates in
MIlwaukee, WA.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Current HELOC rates in
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Key Points
• HELOC interest rates in Milwaukee are influenced by the prime rate and individual financial factors.
• HELOCs offer a flexible way to tap into your home’s equity, often providing credit lines of up to 90% of your home’s value.
• Keep in mind, interest rates on HELOCs can change, which will impact your monthly payments.
• To make sure you get the best deal, compare offers from a few different lenders.
• Be mindful of the risk of foreclosure if payments are not met.
• Use online tools to estimate your monthly payments and interest costs.
Introduction to HELOC Rates
Welcome to our guide to home equity line of credit (HELOC) rates in Milwaukee, Wisconsin. We’re here to help you understand the current market and how to access your home equity in the most effective way. We’ll cover the factors that influence HELOC rates, the benefits and risks of HELOCs, and what to look for when comparing different lenders. Your first step? Understand what a home equity line of credit is.
What Is a HELOC?
A HELOC, or home equity line of credit, is a revolving credit line that is secured by the equity in your home (the value of your home, less whatever you currently owe on your home loan). You typically need 15% equity in your home to qualify for a HELOC. You may be able to borrow up to 90% of your home equity. HELOCs have two phases: the draw period (typically 5 to 10 years), followed by the repayment period (typically 10 to 20 years):
The Draw Period
During the draw period, you can withdraw funds as needed. At this time, you’ll have to pay interest on what you borrow, but most lenders won’t require you to make payments on the principal — although you can do so if you want to utilize the full credit line again. A HELOC interest-only calculator can help you find out how much you owe in interest.
The Repayment Period
After the draw period concludes, the repayment period begins. Monthly payments will increase as you begin to pay down the principal as well as the interest. HELOC interest rates are usually variable, which means the amount you pay each month may go up or down as rates change. A HELOC monthly payment calculator is useful at this stage.
The Origin of HELOC Interest Rates
HELOC interest rates are tied to the prime rate, which is influenced by the Federal Reserve’s policies. Each lender adds a margin to the prime rate, which is why HELOC rates vary — and why it pays to shop around among lenders to get their rate quotes and terms. Lenders also consider individual borrower factors such as credit score, debt-to-income (DTI) ratio, and the amount of equity in the home.
How Interest Rates Impact HELOC Affordability
Even a portion of a percentage point can make a big difference in what you’ll pay for a HELOC. Let’s say you borrow $50,000 with a HELOC and have a 10-year repayment term. If your interest rate was 8.00%, your monthly payment would be $607 and total interest paid would be $22,797. But if you instead had a 7.50% rate, your monthly payment would be $581 and total interest $19,665. The more you borrow and the longer the repayment term, the higher the interest costs. (Remember, due to a HELOC’s variable rates, your actual numbers will differ.)
HELOC Interest Rate Trends
As you begin to think about how to get equity out of your home, you’ll probably start paying close attention to the prime rate. Watching it can give you a sense of where HELOC rates are headed. Since 2018, the prime rate has seen its share of movement, from a low of 3.25% in 2020 to a high of 8.50% in 2023. Understanding this history can shed light on whether current rates are relatively high or low and also prepare you for potential market-driven changes in your HELOC rate once you have one.
| 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 known as adjustable) interest rates, which can go up or down depending on the market. If the prime rate goes up, your HELOC rate will probably go up, too. This can make it harder to plan your budget. It’s not entirely unpredictable, though. Your HELOC agreement will spell out how often rates can change and by how much. There will also likely be a rate cap. If you can get comfortable with a little ambiguity, within these guardrails, you can probably handle a HELOC.
Recommended: Different Types of Home Equity Lending
Helpful Tools and Calculators
Before you apply for a HELOC, online tools can help you estimate your monthly payment and interest costs. Here are three handy calculators for maximizing your home equity borrowing.
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 obtain a competitive HELOC rate, you’ll want to first make sure you have at least 15% equity in your home — and ideally more. Subtract your mortgage balance from your home’s estimated value, then divide the result by the home value and you’ll have your percentage of equity. Next, tackle your credit score and DTI ratio:
Improve Your Credit Score
Keeping your credit score at 700 or above is key to unlocking the best HELOC rates. By making payments on time and chipping away at your credit card balances, you can watch your score rise. Be proactive and check your credit report for any errors so you can dispute any inaccuracies you find. Finally, avoid opening new credit accounts or closing old ones in the months leading to your HELOC application.
Calculate Your Debt-to-Income Ratio (DTI)
Your DTI ratio is a simple concept: it’s the sum of your monthly debt payments divided by your gross monthly income. Most HELOC lenders prefer to see a DTI under 36% when offering the most attractive rates. But you can get a HELOC with a DTI ratio of 50% or less. To improve your ratio, reduce your debt, increase your income, or do both.
Application Process for a HELOC in MIlwaukee
The process of applying for a HELOC in Milwaukee is made easy when you prequalify online. Doing so will give you a clear picture of the rates and terms different lenders can offer you and help you decide if you want to move on to the full five-step application process.
Step 1: Run the Numbers
Before you dive into the HELOC application process, you’ll want to take a look at your home equity to make sure you have at least 15%. Look up your estimated home value on a real estate site. Subtract whatever you owe on your mortgage from the home value, then divide the result by your home value to arrive at a percentage of equity. If you haven’t hit 15% yet, hold off and try to build up a little more equity before you apply for a HELOC.
Step 2: Compare Lenders
Determine what offers you might qualify for when it comes to interest rates, but also compare lenders’ qualification requirements, minimums and maximums, fees, and the length of the draw and repayment periods they’re offering. Different lenders serving Milwaukee have different HELOC rates and terms, so it’s important to compare them.
Step 3: Submit Your Application
Gather recent pay stubs, W-2 forms, and tax returns before you start the application process. If you’re self-employed, a lender might ask for a profit-and-loss statement and a couple years’ worth of tax returns. Also have your homeowners insurance documents handy for your property. Doublecheck every blank you’ve filled in and then submit your application. You can apply online, over the phone, or in person, depending on the lender.
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. If your home is appraised for more than what you owe — to the point that you hit that 15% equity target — 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
When it comes to closing costs, a HELOC is often more affordable than a traditional home loan or refinance. The most significant expense is usually the appraisal fee, though title search fees ($100 to $450) are also a factor. There may also be application, origination, and administrative fees. Some lenders charge annual maintenance fees of up to $250.
Tax Benefits and Considerations
For homeowners, deducting HELOC interest is possible if the borrowed funds are used to significantly improve a primary residence. This tax benefit is valid through 2025, but should continue in future years (keep in touch with a tax advisor, who can help you make sure your deductions qualify).
Recommended: HELOC vs. Home Equity Loan
Alternatives to HELOCs
If you’re not sold on a HELOC, there are other options to consider, including one option, a personal loan, that doesn’t require you to put your home on the line.
Home Equity Loan
Home equity loans offer borrowers a lump-sum loan at a fixed interest rate. You can typically borrow up to 85% of your equity. (A home equity loan calculator can estimate your borrowing capacity.) Lenders look for a credit score of 680 or more. This option is great if you need a specific amount of money and like the predictability of fixed monthly payments.
Cash-Out Refinance
A cash-out mortgage refinance lets you borrow more than you currently owe on your mortgage and collect the extra funds in cash. If you have a credit score of 620 or more, and your DTI ratio is under 43%, this option is open to you, with a fixed or variable rate. 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 typically unsecured, so you don’t risk foreclosure if you find yourself unable to make payments. It’s 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. While they’re relatively fast to secure, personal loans’ interest rates may be higher than those of HELOCs.
The Takeaway
HELOCs’ flexibility and competitive rates make this a smart way to ensure you have funds on hand to cover substantial, recurring expenses like home-improvement or education costs. But (and it’s a big but) the risk of losing your home is real if you fall behind on payments. Always compare interest rates and terms from various lenders so you can make the best choice for your financial life.
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 could you expect to pay monthly 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 wise move at this time?
Whether a HELOC is a good idea right now depends on your financial situation and the current HELOC rates in Milwaukee. 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. You’ll also need to meet a lender’s credit-score requirements and have a healthy debt-to-income ratio.
How does a HELOC affect my credit score?
When you open a HELOC, you may see a modest dip in your credit score due to the lender’s hard inquiry. However, by using your HELOC responsibly and making timely payments, you can actually improve your score by showing that you are a reliable borrower. (On the other hand, maxing out your line of credit or missing payments can have a negative impact on your score.)
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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-Q225-415
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