SOUTH CAROLINA HELOC RATES TODAY
Current HELOC rates in
South Carolina.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Current HELOC rates in
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Compare HELOC rates in South Carolina.
Key Points
• To secure the best HELOC rates in South Carolina, borrowers should have a good credit score, at least 15% home equity, and a low debt-to-income ratio.
• HELOC rates in South Carolina are influenced by the prime rate, the Fed’s policy decisions, and the local housing market.
• HELOCs can be used for home improvements, debt consolidation, and other large expenses.
• The HELOC application process involves reviewing the borrower’s credit history and getting a professional appraisal.
• Borrowers who are able to anticipate fluctuations in interest rates can make more informed decisions about the best time to apply for a HELOC.
Introduction to HELOC Rates
This guide provides an overview of HELOC interest rates in South Carolina. Our goal is to help homeowners understand all the factors influencing these rates and how to secure the best deal on a home equity line of credit. Readers will learn about the different types of home equity loans, the application process, and how to use online tools to predict your monthly payments and total interest paid. Plus, we’ll explore HELOC alternatives, such as home equity loans, cash-out refinances, and personal loans, so that you have all the information you need to make a smart decision.
What Is a HELOC?
A home equity line of credit, or HELOC, is like a credit card secured by your home equity. It allows you to borrow up to 90% of your home’s value, minus your mortgage. One advantage of a HELOC is that you only withdraw from it what you need at a given time — and you only pay interest on what you withdraw. HELOC interest rates are usually variable, meaning they can rise (or fall) with market conditions.
A HELOC has two phases: draw and repayment.
The Draw Period
During the HELOC’s draw period (usually 10 years), you can access funds up to your credit limit, make payments to pay down your balance, and borrow the money again. The borrower is usually required to make interest-only payments during the draw period, but payments toward the principal may be optional.
The Repayment Period
During the repayment period (10 to 20 years), you pay back the principal with interest in regular monthly payments. Variable interest rates can make repayment somewhat unpredictable — and more expensive if rates rise. Fortunately, a HELOC interest-only calculator can help you predict your payments during this period based on different draw amounts and interest rates, so there are no surprises.
The major risk with a HELOC is that the lender can foreclose on your home if you default. That is true with other ways to get equity out of your home, too. We’ll discuss them later.
Where Do HELOC Interest Rates Come From?
It’s not enough to know What is a home equity line of credit; borrowers need to know a little something about how interest rates work. HELOC interest rates are tied to “the prime rate,” the benchmark rate that lenders set for the most creditworthy customers. HELOC rates are also influenced by Federal Reserve decisions and economic factors. For borrowers in South Carolina, the local housing market weighs on interest rates there.
Understanding all this can help borrowers anticipate rate fluctuations and make informed decisions about the best time for a HELOC.
How Interest Rates Impact HELOC Affordability
Your interest rate can make a big difference in affordability over the course of a HELOC. For example, let’s say you have a $75,000 HELOC with a 20-year repayment term. A 1% difference in interest rate can result in $11,000 in additional interest.
As you can see from the chart below — which shows different total interest amounts based on rate, term, and amount borrowed — it pays to research the best HELOC rates in South Carolina. This table was created with a HELOC repayment calculator; plug in your numbers to see your payment and total interest.
| Loan Amount | Loan Term | Interest Rate | Monthly Payment |
|---|---|---|---|
| $100,000 | 20 years | 8.00% | $836 |
| 7.00% | $775 | ||
| 10 years | 8.00% | $1,213 | |
| 7.00% | $1,161 | ||
| $50,000 | 20 years | 8.00% | $418 |
| 7.00% | $388 | ||
| 10 years | 8.00% | $607 | |
| 7.00% | $581 | ||
| $25,000 | 20 years | 8.00% | $209 |
| 7.00% | $194 | ||
| 10 years | 8.00% | $303 | |
| 7.00% | $290 |
HELOC Interest Rate Trends
The movement of the prime interest rate serves as an indicator of future HELOC rate trends. Since 2018, the prime rate has undergone substantial fluctuations, ranging from a low of 3.25% in 2020 to a high of 8.50% in 2023. The graphic below shows a longer history of the average prime rate over the last 50 years.
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
Not everyone gets the prime rate. Other metrics factor into the interest rate that you’re offered, such as your home equity position, credit score, income, and combined loan-to-value (CLTV) ratio.
Home Equity
Possessing substantial equity in your principal residence makes you appear less risky to lenders, potentially leading to more favorable interest rates. Typically, homeowners must have a minimum of 15% equity in their property to qualify for a HELOC. You can estimate your equity by checking your home value with an online real estate tool, then subtracting your current mortgage balance.
Credit Score
Maintaining a credit score of 680 or higher is crucial to qualifying for a HELOC. And you’ll secure better rates with a score of 700+. A higher credit score indicates lower risk for lenders.
Stable Income
Lenders evaluate your income to determine your ability to fulfill the HELOC repayment obligations. A consistent income signifies a diminished probability of default, potentially securing more favorable HELOC rates.
Combined Loan-to-Value Ratio
Most lenders require your combined loan-to-value ratio (mortgage balance + desired HELOC amount / appraised home value) to be 90% or less, although some will allow you to borrow 100% of your home’s value. The ratio will determine your credit limit.
If your home value is $500,000, your mortgage balance is $300,000, and your HELOC balance is $120,000, then your CLTV ratio is 84%. That’s within the acceptable range.
Variable vs Fixed Interest Rates
HELOCs feature variable interest rates, which are subject to change throughout the duration of the loan. Initially, variable interest rates are lower than typical fixed rates, but they fluctuate in accordance with market conditions. It is beneficial to comprehend the distinction between HELOC and home equity loan interest rates in order to make an informed decision.
Tools & Calculators
SoFi provides numerous online tools to assist you in estimating your payments and gaining insight into the financial implications of a HELOC. Below you’ll find a home equity loan calculator as well as two HELOC calculators mentioned above.
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 the most competitive HELOC rates in South Carolina, you may need to do some advance work before applying. Focus on your credit score, home equity stake, and debt-to-income ratio. Here’s your To Do list:
Build Your Credit Score
By consistently paying your bills on time and paying down your credit card balances, you can substantially improve your credit score. A higher credit score can make you eligible for the most competitive HELOC rates available in the South Carolina market.
Assess Your Home Equity
Regular home loan payments help in building equity over time. Home equity can also be enhanced through renovations that boost the property’s value. Increased home equity can lead to better terms and higher amounts when applying for a HELOC.
Calculate Your Debt-to-Income Ratio (DTI)
Your debt-to-income ratio (DTI) is calculated by dividing your total monthly debt payments (student loans, auto loan) by your gross monthly income. Typically, home equity lenders prefer a DTI below 36%, but a lower DTI is always more favorable. A rock-bottom DTI can significantly enhance your chances of securing the most competitive HELOC rates available in South Carolina.
Application Process for a HELOC in South Carolina
If you’re concerned about whether you qualify for a HELOC, you’ll need to take extra care in preparing your application. Each of these steps plays an important role in the process.
Step 1. Crunch the Numbers
Check your credit score, calculate your DTI, and get a good estimate of your home equity before you apply for a HELOC. Some lenders offer online prequalification for a streamlined application process.
Step 2. Compare Lenders
Interest rates vary between lenders, so shop around to see what offers you qualify for with multiple lenders. You’ll want to compare not just interest rates, but also qualification requirements, minimums and maximums, fees, and the length of the draw and repayment periods.
Step 3: Gather Your Documents
When you have selected a lender, remember to gather the required documents for your HELOC application. These usually include proof of income (W-2s, tax returns), employment history (a resume), credit history, and proof of homeowners insurance. Having all this ready can expedite the application process and increase your chances of approval.
Step 4: Submit Your Application
Submitting your HELOC application can take place online, by phone, or in person. The lender will review your application and reach out if any additional information is required. Submitting a complete and accurate application will facilitate a swift approval process.
Step 5: Get an Appraisal
After submitting your application, the lender will arrange for a home appraisal to determine your home’s current value. If your home appraises for more than your mortgage balance, you may be approved for a HELOC. The appraisal is a crucial step in the process, as it directly affects the amount of equity you can access.
Step 6: Prepare for Closing
Before accessing your HELOC funds, you must sign the documents and pay necessary fees. Some lenders obligingly make funds available within three days following the closing of the HELOC loans.
Tax Benefits and Considerations
Homeowners can deduct HELOC interest if the borrowed funds are used for buying, building, or significantly improving their primary residence. Interest deductions are limited to the first $375,000 of the mortgage principal for individual taxpayers ($750,000 for married couples filing jointly). Consult a tax advisor to navigate the specific tax implications and confirm eligibility for deductions.
Closing Costs and Fees
HELOC closing costs are typically lower than home-buying and mortgage refinance costs. The appraisal fee ($150-$500) is usually the highest expense. Other costs may include application, origination, and administrative fees. Some lenders charge annual maintenance, transaction, inactivity, or early termination fees. Other lenders may waive closing costs but charge a higher interest rate.
Alternatives to HELOCs
Even if you’re leaning toward a HELOC, it’s smart to check out the alternatives. Each financing option below has its own pros and cons, which suit particular borrowers. Make sure your choice is the best one for your financial needs and goals.
Home Equity Loan
What is a home equity loan? Unlike HELOCs, home equity loans provide a lump sum amount and are paid back immediately at a fixed interest rate. Borrowers can usually access up to 85% of the equity built in their home through a home equity loan (as opposed to 90% with a HELOC). This option is suitable for those who need a specific amount of money for a one-time expense.
Review our HELOC vs home equity loan
| 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
A cash-out refi pays off your original mortgage for more than you owe and gives you the difference as cash. If you’re considering a cash-refinance vs. a home equity line of credit, you should know that the refinance means you’ll have only one monthly payment, as opposed to two if you take on a HELOC while paying off a mortgage. A cash-out refi also means a new interest rate and loan terms. If rates have dropped since you initially financed your home, this could be good news.
Personal Loan
A personal loan is an installment loan that you pay back over a term of 2 to 7 years. Interest rates for personal loans are often higher than those for HELOCs or home equity loans because personal loans are unsecured. Some borrowers like the fact that their home isn’t used as collateral. And because you sidestep a home appraisal, the loan approval process may be faster, too.
Credit Cards
Credit cards typically come with much higher interest rates than HELOCs, which makes them more expensive if you carry a large balance from month to month. While credit cards offer flexibility for smaller purchases, HELOCs are better suited for larger expenses such as home improvements or debt consolidation.
The Takeaway
HELOCs in South Carolina are known for their competitive rates, flexible repayment, and potential tax benefits. To secure the most favorable South Carolina HELOC rates, borrowers should possess a strong credit score, maintain at least 15% equity in their residential property, and keep their debt-to-income ratio below 36%. It’s also important to shop around with multiple lenders, since each sets their own HELOC interest rates. Just make sure to also compare fees and penalties, qualifications, and the lengths of the draw and repayment periods. If you do your homework, you’ll be well-positioned to secure the best available rates in South Carolina.
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?
The monthly payment for a $50,000 home equity line of credit depends on several factors, including prevailing interest rates and the repayment term. Assuming you draw the full amount and make interest-only payments during the draw period, your monthly payment over 20 years could range from $388 (at 7.00% interest) to $483 (at 10.00%). A repayment term of 10 years will mean higher monthly payments but less interest paid over the life of the loan.
Is a HELOC a good idea right now?
A home equity line of credit (HELOC) can be a good financial tool for homeowners with a steady income, strong credit, and ample home equity. HELOCs provide flexibility and convenience for addressing substantial expenses. However, because a HELOC is secured by your home, if you default you could face foreclosure.
What is the monthly payment on a $100,000 HELOC?
The monthly payment on a $100,000 HELOC is based on how much of the credit line you have used, and on your repayment term and interest rate. If you use the entire $100,000 and pay it back at 7.50% interest over 20 years, your monthly payment would be $806. If you had a 7.00% interest rate, you would pay less: $775.
What are the benefits of a HELOC?
A home equity line of credit is a type of revolving credit, similar to a credit card. It offers numerous advantages, including flexible access to funds as required, competitive interest rates, and potential tax deductions. These financial tools can be used for a variety of purposes, including home renovations and debt consolidation.
Do you need an appraisal for a HELOC?
It’s standard practice for HELOC lenders to require an appraisal. This step determines the current market value of the borrower’s property, which is used to calculate your available equity.
What might prevent you from getting a home equity loan?
Several factors may make you ineligible for a home equity loan: a poor credit history, insufficient home equity, a high debt-to-income ratio, and unstable income.
How hard is it to get a HELOC?
The difficulty of securing a HELOC hinges on your financial situation. But if you have a strong credit score (700+), sufficient home equity (15% or more), and steady income, your odds are good. Just be prepared for a rigorous application process, and have your financial documentation ready.
Does HELOC affect credit score?
HELOCs probably will impact your credit score. When you apply for a HELOC, there is a possibility that a hard inquiry will be conducted, which may temporarily lower your score. Additionally, the HELOC can potentially affect your credit utilization ratio, which in turn can have an influence on your score.
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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