SARASOTA HELOC RATES TODAY
Current HELOC rates in
Sarasota, FL.
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 Sarasota.
Key Points
• Home equity line of credit interest rates in Sarasota are influenced by the prime rate and the lender’s margin, among other factors.
• HELOCs work like a credit card, with interest accruing only on the amount you draw from the line of credit.
• Homeowners can borrow up to 90% of their home equity with a HELOC.
• HELOCs are a great option for big expenses like home improvements, education, or consolidating debt.
• The closing costs for a HELOC are usually less than those for a home purchase or refinance.
Introduction to HELOC Rates
This article is your go-to guide to home equity line of credit (HELOC) rates in Sarasota, FL. You’ll get the lowdown on current HELOC rates, the factors that sway them, and the tools you can use to estimate your costs. Whether you’re dreaming of a home makeover or need cash for other big-ticket items, this guide will ensure you make an informed decision on a HELOC. First step? Let’s make sure you understand exactly what it means to sign onto a HELOC.
What Is a HELOC?
A HELOC is a revolving credit line that uses your home’s equity (the difference between your home’s value and your home loan balance) as collateral. Most lenders require you to have at least 15% equity in your home to qualify for this type of borrowing, and you can typically borrow up to 90% of your equity. Because the HELOC is guaranteed by your home, missing payments on this credit line can put you at risk of foreclosure. HELOCs have two main periods: the draw period and the repayment period:
The Draw Period
During the draw period (often 10 years), 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. It might be 10 or 20 years. 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 Origins of HELOC Interest Rates
HELOC interest rates are tied to the prime rate, which is influenced by the Federal Reserve. Lenders add their own margin to the prime rate, which is why HELOC rates in Sarasota can vary by lender (and why it pays to shop around and get rate quotes from various lenders). To get the best HELOC rates, you need a strong credit score, a debt-to-income (DTI) ratio below 36%, and a good amount of equity in your home.
How Interest Rates Impact HELOC Affordability
The interest rate on your HELOC can make a world of difference in what you pay to borrow money. Even a one-percentage-point change in your rate can have a noticeable impact. For example, on a $50,000 HELOC with a 20-year term, a rate increase from 7.00% to 8.00% during the repayment phase can raise your monthly payment by $30 and the total interest paid by almost $7,000.
Of course, the HELOC rate is variable, so your exact numbers will be slightly different. But it’s safe to say that the more you borrow with a HELOC, the greater the effect of a change in interest rate.
HELOC Interest Rate Trends
Once you start thinking about borrowing money, it’s natural to keep a closer eye on the prime rate. After all, HELOC rates tend to follow the prime rate’s lead. Having a sense of the history of the rate will help you understand whether the rates you’re seeing in the current market are high or low when compared to past rates. In 2020, the prime rate hit an unusually low 3.25%, while in 2023 it was as high as 8.50%. If you can’t wait for a drop in interest rates, focus on presenting the strongest credit score and DTI ratio possible. We’ll give tips 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 we’ve noted, HELOCs usually come with variable (also called adjustable) interest rates, which means your costs can change based on the market. Your monthly payments might go up or down, but your HELOC agreement will spell out how often the rate can change, how much it can change, and what the overall rate cap is for your line of credit. You’ll have to think about whether you can handle these variations before obtaining a HELOC.
Recommended: HELOC vs. Home Equity Loan
Helpful Tools & Calculators
Before you dive into a HELOC, you can use online tools to estimate your monthly costs. Running different interest rates through a HELOC calculator can help you understand how rate changes might affect your monthly payment amount during the draw (interest-only) and repayment periods.
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
To get a competitive HELOC rate, you’ll want to check off a few boxes. First, make sure you have at least 15% equity in your home. 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, work on 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. Making payments on time and chipping away at credit card balances will help your score rise. 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: the sum of your monthly debt payments divided by your gross monthly income. Most HELOC lenders want to see a DTI under 36% when offering the most attractive rates. But you can qualify for 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 Sarasota
Some lenders offer the convenience of prequalifying for a HELOC online, which can be a time-saver. By providing some basic financial information, you can get a sense of the HELOC rates in Sarasota and the amount you might qualify for. From there you can decide if you wish to proceed to the full application process, as outlined below.
Step 1. Run the Numbers
Check that your equity level, credit score, and DTI ratio meet the minimums a lender will look for. That’s 15% equity, a credit score of at least 640, and a DTI of 50% or less.
Step 2. Compare Lenders
Examine offers from different lenders to find the best HELOC rate you can get in Sarasota. Don’t just look at interest rates. You can narrow the field based on rates, but you’ll want to zero in on qualification requirements, minimums and maximums, fees, and the length of the draw and repayment periods. Each lender has unique terms and conditions, so it’s important to read the fine print and understand the full scope of what you’d be signing up for.
Step 3: Submit Your Application
You’ll need to gather some paperwork, like your ID, proof of income (pay stubs, W-2, tax documents), and insurance policy information for the property you’re using as collateral. If you’re self-employed, a lender might ask for a profit-and-loss statement and a couple years’ worth of tax returns. Once you’ve got everything together, you can apply online, over the phone, or in person. Doublecheck the accuracy of the info you provide to keep the process moving along smoothly.
Step 4: Get an Appraisal
An appraisal is an unbiased, professional evaluation of your home’s worth in the current market. Typically, you can expect to pay between $300 and $600 for this service. The lender you’re applying to will guide you as to what’s needed in the appraisal stage.
Step 5: Prepare for Closing
Before you can access your HELOC funds, you’ll need to sign documents and pay any fees. Some lenders make funds available within three days after the HELOC closes. Be sure to review all the terms and conditions, including the interest rate, draw period, repayment schedule, and fees.
Closing Costs and Fees
HELOC closing costs are generally lower than those for buying or refinancing a home. Appraisal fees are typically the largest expense. A title search, if required, can cost $100-$450. Other potential costs include application, origination, and administrative fees. Some lenders charge annual maintenance fees (up to $250) and transaction/inactivity fees. Lenders that waive closing costs may compensate with higher interest rates.
Tax Benefits and Considerations
You may be surprised to learn that you can deduct HELOC interest on your federal taxes if you’re using the funds to significantly improve your primary residence. These tax rules are in place through 2025. A tax professional can help you itemize your return, which is necessary in order to claim this deduction. A tax pro is also likely to keep tabs on how to handle HELOC interest in 2026 and beyond.
Recommended: Different Types of Home Equity Lending
Alternatives to HELOCs
As you think about how to get equity out of your home, there are other options to consider besides a HELOC. Study this list to see if any might be a better fit for you:
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 equity. (A home equity loan calculator will show your borrowing capacity.) Lenders look for a credit score of 680 or more. This option is great if you need a defined 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 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. While they’re relatively speedy to secure, personal loans’ interest rates can be higher than those of HELOCs.
The Takeaway
When you’re mulling over a HELOC, it’s crucial to consider the benefits and risks. While HELOCs offer flexibility and potentially lower interest rates than unsecured loans, they come with the risk of losing your home if payments are not made. Having a strong credit score and low DTI ratio can help you compete for the best interest rate, lowering your costs. Seeking out rates from multiple lenders can also help ensure you find the lowest available rate for your needs.
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 you use a HELOC for?
A HELOC can be used for home improvements, debt consolidation, or any number of expenses. 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 for a while before repaying the principal plus interest. It’s useful for managing ongoing expenses or large projects with unpredictable costs.
What’s the monthly payment on a $50,000 HELOC?
The monthly payment on a $50,000 HELOC will vary according to the variable interest rate and the term. During the draw period, you might only need to pay interest. At a 7.00% interest rate, your monthly interest-only payment would be about $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 unless the variable interest rate trends downward.
Do you need an appraisal for a HELOC?
You will likely need a home appraisal to obtain a HELOC. The appraisal establishes your home’s current market value, which is essential for calculating the amount of equity you can access. The appraisal fee is usually $300 to $600, and it’s a crucial step in the application process.
What might disqualify you from getting a home equity loan?
There are a few factors that could potentially disqualify you from obtaining a home equity loan. These include a low credit score, a high debt-to-income (DTI) ratio, and not enough equity in your home. 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.
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.
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.
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.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SOHL-Q225-430
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