OHIO HELOC RATES TODAY
Current HELOC rates in
Ohio.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Current HELOC rates in
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Compare HELOC rates in Ohio.
Key Points
• Comparing various lenders’ offerings is essential to secure the best home equity line of credit rates in Ohio.
• Using HELOC interest-only calculators and HELOC monthly payment calculators can help borrowers make informed decisions about Ohio HELOC rates.
• Maintaining a strong credit score and sufficient home equity can lead to more favorable HELOC rates in Ohio.
• Understanding the prime rate and economic factors can help borrowers comprehend fluctuations in Ohio HELOC rates.
• A thorough application process, including document preparation and home appraisal, is crucial for obtaining the best HELOC rates in Ohio.
Introduction to HELOC Rates
If you’re looking for the best HELOC rates in Ohio, comparing offers from different lenders can help you save money. But so can understanding how factors like your home equity and credit score influence the rates you’ll receive. This article will give you a solid grounding in HELOCs, also known as home equity lines of credit.
You’ll gain valuable insights into all the factors that influence HELOC rates, plus the strategies to secure the best available deals and information about other types of home equity loans.
Let’s start at the beginning: What is a home equity line of credit, anyway?
What Is a HELOC?
A HELOC is like a credit card with a spending limit based on your home’s value minus whatever you still owe on your home loan. You can borrow up to 90% of your home’s value. Because a HELOC is secured by your home, its interest rate will be lower than the rate you would get with a personal loan or credit card. But take note: HELOCs have variable rates, so the rate can adjust up (or down) over time.
A HELOC has two phases, draw and repayment. Let’s take a closer look at how they differ.
The Draw Period
During the draw period of a HELOC, which typically spans a decade, you can withdraw funds up to the limit of your credit line. You’ll probably have to make interest payments, but you likely won’t have to pay down the principal (although if you do, then you can borrow again up to the credit line). This flexibility is helpful if, say, you need to borrow money for a renovation but you don’t need it all at once. It’s also useful if you’re funding a big renovation, but don’t know exactly how much you need.
The Repayment Period
The HELOC repayment period, usually 10 to 20 years, involves paying back the principal plus interest. A HELOC repayment calculator can help you estimate your payments as the variable interest rate changes.
Where Do HELOC Interest Rates Come From?
HELOC interest rates are tied to the prime rate that banks and other lenders set, which in turn is tied to the Federal Reserve’s rate decisions. Lenders offer their prime rate to their most creditworthy customers. But the prime rate isn’t for everyone, and lenders adjust the rate they give each individual customer based on the applicant’s personal financial metrics (more on that later).
How Interest Rates Impact HELOC Affordability
Interest rates exert a significant influence on the affordability of HELOCs. Over a 20-year term, a seemingly small 1% difference in interest rate can result in a substantial amount of additional interest paid, as you’ll see in the chart below. (The chart also shows how the payment term can affect your monthly payments and total interest paid.)
| Loan Amount | Loan Term | Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|---|---|
| $100,000 | 20 years | 8.00% | $836 | $100,746 |
| 7.00% | $775 | $86,072 | ||
| 10 years | 8.00% | $1,213 | $45,593 | |
| 7.00% | $1,161 | $39,330 | ||
| $50,000 | 20 years | 8.00% | $418 | $50,373 |
| 7.00% | $388 | $43,036 | ||
| 10 years | 8.00% | $607 | $22,797 | |
| 7.00% | $581 | $19,665 | ||
| $25,000 | 20 years | 8.00% | $209 | $25,186 |
| 7.00% | $194 | $21,518 | ||
| 10 years | 8.00% | $303 | $11,398 | |
| 7.00% | $290 | $9,833 |
HELOC Interest Rate Trends
HELOC rates closely follow the average prime rate, so it helps to be familiar with how rates have risen and fallen in recent years before you start searching for your best possible rate. The average prime rate hit a low point of 3.25% in 2020 and a high of 8.50% in 2023. To understand how unusual that 3.25% was, take a look at the graphic below, which shows 50+ years of the average prime rate.
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
Historical U.S. Prime Rates
Factors Influencing HELOC Rates
The prime rate isn’t the only important data point that will be involved if you decide to apply for a HELOC. There are plenty of other factors that influence what rate you, specifically, will be offered. Make sure your stats are working in your favor in each of these categories:
Home Equity
Generally, a minimum of 15% to 20% equity is required to qualify for a HELOC. But having more significant home equity places you in a lower-risk category for lenders, potentially leading to reduced interest rates.
Credit Score
A credit score of 680 or higher is a good entry point for a HELOC, but again, higher is better and some lenders prefer that the number tops 700.
Stable Income
A steady stream of income serves as a reliable indicator of reduced default risk, which often translates into more favorable HELOC rates. By maintaining consistent employment and a steady income, you can significantly bolster your prospects of securing good terms for your HELOC.
Loan-to-Value Ratio
Most lenders require your combined loan-to-value ratio to be 90% or less. (Your CLTV is your current mortgage principal owed plus the amount you wish to borrow divided by your home’s appraised value.)
Variable vs Fixed Interest Rates
HELOCs are characterized by variable interest rates that are subject to change over the course of the HELOC term. Initially, variable rates are lower compared to standard fixed rates, but they can be adjusted upward or downward in line with market conditions. Understanding this distinction can empower you to make an informed decision regarding your choice of a HELOC or a home equity loan.
Tools & Calculators
These tools will serve as invaluable aids in estimating your payments and shedding light on the financial implications of a HELOC.
Run the numbers on your HELOC.
-
Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
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
Now that you understand what factors help determine the HELOC rate you’ll be offered, there are a few things you’ll likely want to do before you begin the application process.
Care for Your Credit Score
Maintaining timely payments and reducing credit card balances can help you cultivate the kind of credit score lenders like to see. Also take time to review your credit report and promptly address any errors.
Assess Your Home Equity
Regular mortgage payments have helped you build home equity over time. To make sure you have the minimum 15% equity you’ll need for a HELOC, do some math. Locate your home’s estimated price on a real estate web site. Subtract what you still owe on your mortgage from your home price. Then divide the result by your home’s estimated price. This will give you a percentage of equity.
Calculate Your Debt-to-Income Ratio (DTI)
Your debt-to-income (DTI) ratio is a crucial metric in determining your financial health. It is calculated by dividing your total monthly debt payments by your gross monthly income. Home equity lenders generally like to see a DTI below 36%, but the lower your DTI, the better your chances of securing favorable HELOC rates in Ohio.
Application Process for a HELOC in Ohio
The application process for a HELOC will include a thorough assessment of your financial well-being, so you’ll need to provide quite a bit of information. You’ll want to compare interest rates offered by various lenders, as well. Here are the steps:
Step 1. Run the Numbers
Assessing your financial situation before you apply is essential. Check your credit score (is it at least 680?). Calculate your DTI ratio to be sure it’s under 36% — ideally well under. And estimate your home equity. Some lenders allow you to prequalify on their website.
Step 2. Compare Lenders
See what offers and interest rates you might qualify for. Compare lenders’ requirements, loan minimums and maximums, fees, and other details. Make sure you know the duration of the lenders’ draw and repayment periods.
Step 3: Gather Your Documents
Begin putting together all the necessary documents before you plan to apply. Required items are typically proof of income such as recent pay stubs and your latest tax return, employment history, and a basic estimate of your home’s value. Having these documents ready will speed up the application process.
Step 4: Submit Your Application
Once you have all your documents ready, you can file your HELOC application. This can often be done on the internet, by phone, or in person at the lender’s office. To avoid potential processing delays, make sure all information you provide is accurate.
Step 5: Get an Appraisal
After you submit your application, a lender may request a home appraisal. This is necessary to determine your home’s current market value. If an appraisal shows the value of your home exceeding your mortgage’s outstanding balance, the lender may approve you for a HELOC.
Step 6: Prepare for Closing
Before you’re granted access to HELOC funds, the lender will require you to sign a HELOC agreement and pay fees. Certain lenders may make funds available within three days after closing. Make sure you understand all terms and conditions.
Tax Benefits and Considerations
Homeowners can deduct HELOC interest if the borrowed funds are used for buying, building, or significantly improving their primary residence. Deductions are limited to the interest on the first $375,000 of the mortgage principal for individual taxpayers ($750,000 for married couples filing jointly). A tax advisor can help you confirm eligibility for deductions related to HELOCs.
Closing Costs and Fees
HELOC closing costs are lower than home-buying or cash-out refinance costs. An appraisal fee, $150 to $500, is often the highest expense. Other costs include application, origination, and administrative fees. Some lenders charge annual maintenance and transaction fees. Lenders may reduce or waive closing costs but may increase the interest rate.
Alternatives to HELOCs
In addition to HELOCs, there are other ways to get equity out of your home, as well as financing options that don’t involve tapping into your home equity.
Home Equity Loan
Unlike HELOCs, home equity loans provide borrowers with a fixed lump sum that is paid back at a set interest rate. Homeowners can generally access up to 85% of their equity through a home equity loan, making it a popular option for those seeking to borrow against the value of their property.
Here’s a quick look at HELOCs vs. home equity loans:
| HELOC | Home Equity Loan | |
|---|---|---|
| Type | Revolving line of credit | Installment loan |
| Interest Rate | Usually variable-rate | Usually fixed-rate |
| Repayment | Repay only what you borrow; you may have the option to make interest-only payments during the draw period. | Starts immediately at a set monthly payment |
| Disbursement | Charge only the amount you need. | Lump sum |
Cash-Out Refinance
This special type of mortgage refinance allows homeowners to tap into their home equity by refinancing their existing mortgage for more than they owe and taking the difference in cash. This option can be beneficial for those needing a substantial lump sum.
If you’re considering a cash-out refinance vs. a home equity line of credit, one important thing to think about is the interest rate for the refinance, and how it compares to the rate you currently have.
Personal Loan
A personal loan, a flexible and typically unsecured loan, is repaid in regula payments over a term of 2 – 7 years. This option does not necessitate using your home as collateral, unlike a HELOC. The downside is that the interest rate will likely be higher than it would be on a HELOC or home equity loan.
Credit Cards
Credit cards also typically come with a higher interest rate than HELOCs, so this can be an expensive choice if you carry a large balance from month to month. While credit cards offer flexibility for smaller purchases, a HELOC is often a more suitable solution for larger expenses such as home improvements or debt consolidation.
The Takeaway
When searching for the best HELOC rates in Ohio, it’s vital to compare offers from multiple lenders. Factors like your credit score, how much equity you have, and your DTI ratio significantly influence the rates you’ll receive. Improving your financial standing before you apply and shopping around can help secure the most competitive rates.
SoFi now offers flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively low rates. And the application process is quick and convenient.
FAQ
What is the monthly payment on a $50,000 HELOC?
With an 8.00% interest rate and a 10-year term, your monthly payment will be $607. But exactly how much you’ll pay will depend on your interest rate and loan term. Borrowing $50,000 with an 8.00% interest rate over a 20-year term would cost you $418 per month, although you would pay more total interest with the 20-year term.
Is a HELOC a smart move for you?
HELOCs can be beneficial. They offer flexibility and can be utilized for any purpose — and best of all, you only pay interest on the amount of the credit line that you are using. However, it’s imperative to carefully consider the variable interest rates, which have the potential to increase (or decrease) over time with market conditions.
What is the monthly payment on a $100,000 HELOC?
The monthly payment on a $100,000 home equity line of credit could be $700 to $850 depending on the interest rate available in the current market (and assuming you have a 20-year repayment term).
What are the benefits of a HELOC?
The best thing about a HELOC for most people is its flexibility. You borrow what you need when you need it versus taking a lump sum. And you only pay interest on the amount of the credit line that you have used. With many HELOCs, you can pay only interest during the draw period.
Do you need an appraisal for a HELOC?
You will need an appraisal as part of your application for a HELOC, but you shouldn’t request one until you have instructions from the lender about what is required.
What disqualifies you from getting a home equity loan?
There are several factors that can disqualify you from getting a home equity loan, including bad credit, not enough equity in your home, and a high level of debt relative to your income.
How difficult is it to get a HELOC?
The difficulty of getting a home equity line of credit will depend on your financial situation. Lenders consider your credit score, home equity, debt-to-income ratio, and income stability. Improving these before you apply can make the process smoother.
Does HELOC affect credit score?
A HELOC may affect your credit score in a few ways. Applying for a HELOC may result in a hard inquiry, which can temporarily lower your score. Also, high utilization of your credit line can negatively impact your score. But making timely payments on your HELOC can improve your score over time.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*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.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee. Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice. Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article. 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.
SOHL-Q424-045
More HELOC resources.
-
What is a Home Equity Line of Credit
-
Different Types of Home Equity Loans
-
HELOC vs Home Equity Loan: How They Compare