ST. LOUIS HELOC RATES TODAY
Current HELOC rates in
St. Louis, MO.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Current HELOC rates in
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Key Points
• Home equity line of credit rates are influenced by the prime rate, your credit score, and your home equity level.
• Keeping an eye on prime rate trends can help you anticipate rate changes.
• Use online calculators to get an idea of what monthly payments and total interest costs might look like.
• HELOCs let you borrow as you need funds instead of accepting a large lump sum all at once.
• Defaulting on payments could lead to foreclosure.
Introduction to HELOC Rates
Welcome to your comprehensive guide to home equity line of credit (HELOC) rates in St. Louis. We’re here to help you understand how these rates are determined and what factors can influence them. You’ll learn about the benefits and risks of HELOCs, how to compare lenders’ offers, and the tools available to estimate monthly payments. Whether you’re considering a HELOC for home renovations, debt consolidation, or other financial needs, this guide will equip you with the knowledge to make a well-informed decision. Let’s start with the basics: understanding what a home equity line of credit is in the first place.
What Is a HELOC?
A HELOC is a revolving credit line that allows you to tap into the equity you’ve built in your home by making payments toward your home loan. You can typically borrow up to 90% of your equity (your home’s value, minus your remaining mortgage balance). If you have at least 15% equity in your home, you may qualify. Of course, borrowing by using your home as collateral means that if you fail to repay what you owe, your lender could foreclose. HELOCs have two main phases, and it’s good to understand how payments differ in each:
The Draw Period
In the HELOC’s initial draw phase, typically 10 years, you can borrow money as you need it, up to whatever credit line your lender has established. Most lenders only require you to pay interest on what you have borrowed during this time. HELOCs have variable interest rates, and a HELOC interest-only calculator is a useful tool at this time.
The Repayment Period
Once you hit the repayment period, you’ll stop borrowing and start making monthly payments of both principal and interest. Again, the interest rate is variable, so payments aren’t always predictable. A HELOC monthly payment calculator can help you estimate what you might owe depending on the amount you’ve borrowed and your current rate.
Recommended: HELOC vs. Home Equity Loan
Understanding the Origin of HELOC Interest Rates
HELOC interest rates tend to follow the prime rate, which in turn is steered by Federal Reserve policies. Lenders then append a margin to the prime rate to establish the HELOC rates they extend to customers. This margin isn’t set in stone and can fluctuate based on your credit score, debt-to-income (DTI) ratio, and the equity in your home. This is why it’s so important to seek out rates from multiple lenders as you explore a HELOC. Offers may be different from each.
How Interest Rates Impact HELOC Affordability
Even the smallest interest rate variation can make a big difference in your monthly budget when you’re making payments on a HELOC. HELOCs’ variable rates makes it hard to pinpoint the exact amount the HELOC will cost, but if you borrowed $50,000 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: $388, $418, and $450, respectively, and total interest paid of $43,036, $50,373, and $57,967, respectively.
HELOC Interest Rate Trends
Keeping an eye on the prime interest rate can be a smart move, offering a glimpse into the future of HELOC rates in St. Louis. It’s also helpful to have a sense of the prime rate’s history. It can help you understand how much your variable interest rate might fluctuate in a decade, and knowing the history can give you a sense of whether rates you’re seeing in the current market are relatively high or low — or somewhere in between.
| 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 called adjustable, interest rates, which are influenced by market conditions. These rates often begin lower than fixed rates, which is a plus for your initial payments. But, as the name suggests, they can change. If the prime rate goes up, so will your HELOC rates, and that could affect your budget. Rest assured, though, the rate can’t swing wildly. The HELOC agreement will spell out how often your rate can change, how much it can change, and what the overall rate cap is. If you can get comfortable with potential payments across this range, then you can probably handle a HELOC.
Helpful Tools & Calculators
One way to figure out if you can handle HELOC payments at various interest rates is to play around with a HELOC calculator. The calculators below can help you compute interest-only and repayment amounts for the amount you’re thinking you might borrow. Spend some time running the numbers to see if the monthly payments seem doable.
Run the numbers on your HELOC.
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Home Equity Loan
CalculatorEnter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
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HELOC Payment
CalculatorPunch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
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HELOC Interest Only
CalculatorUse 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 secure a stellar HELOC rate, your credit score, DTI ratio, and home equity level are key. You can compute your percentage of equity quickly: Subtract your current mortgage balance from your home’s estimated value; divide the answer by your home value to arrive at your percentage of equity. If it’s over 15% you’re in the right zone, but for the best rates you’ll want to aim higher. Here’s how you can spruce up your other numbers:
Improve Your Credit Score
You can get a HELOC with a credit score of 640 or better. But to secure the best possible HELOC rate, you’ll want to maintain a credit score of 700 or more. Making timely payments and reducing your credit card balances are two powerful ways to boost your credit score. It’s also a good idea to check your credit report for errors and dispute any inaccuracies you find. And don’t be too quick to close old credit accounts — using them responsibly can help you maintain a strong credit history, which can also improve your chances of qualifying for a competitive HELOC rate.
Calculate Your Debt-to-Income Ratio (DTI)
Your DTI ratio is a straightforward calculation: Tally up your monthly debt payments (think mortgage, car loans, credit cards) and divide that by your gross monthly income. HELOC lenders generally favor a DTI that’s under 50%, but the lower, the better. For the best interest rates, you’ll want to aim for a DTI ratio below 36%.
Application Process for a HELOC in St. Louis
Many lenders offer the convenience of prequalifying for a HELOC online, making it easy to get a glimpse of the rates and credit limits you could be eligible for. If you decide to pursue the HELOC, follow these five steps.
Step 1: Run the Numbers
Before you file a HELOC application, make sure you have at least 15% equity. Also make sure your credit score and DTI ratio at least meet the minimums spelled out above (640 for the former, 50% for the latter).
Step 2: Compare Lenders
Scrutinize the estimates you obtained during prequalification, or seek out offers now. Don’t just compare interest rates. Also look at qualification requirements, minimum and maximum credit lines, fees, and the length of the draw and repayment periods. Each lender will have different terms, so it’s important to examine all of these factors to make sure you choose the best fit for your financial situation and needs.
Step 3: Submit Your Application
Gather your papers, including your ID, proof of income, and details about the property you’re using as collateral. For income, you’ll usually need to show your most recent pay stubs, W-2s, and tax returns. If you’re self-employed, you might need to provide a profit-and-loss statement and your tax returns from the last two years. For your property, you’ll need a homeowners insurance declaration page. Once you’ve got everything together, you can start your application online, over the phone, or in person.
Step 4: Get an Appraisal
It’s likely that the lender you apply to will require this step, in which a pro visits your home, gives it a good look, and then crunches the numbers to see what it’s worth in today’s market. The cost? Usually between $300 and $600. If your home’s value comes in higher than what you owe, to the point that you meet the minimum equity needed for a HELOC, your lender could give you the green light. This step is key in nailing down how much equity you can tap into and the terms you’ll score.
Step 5: Prepare for Closing
Before you can use your HELOC, you’ll need to sign the HELOC documents and pay some fees. The good news is that many lenders can get you access to your funds in as little as three days after closing. But before you sign on the dotted line, make sure you understand all the terms and conditions in the agreement.
Recommended: Different Types of Home Equity Lending
Closing Costs and Fees
HELOC closing costs are typically more affordable than those for home purchases or cash-out refinances. The priciest item is often the appraisal fee. Title searches, if necessary, can add another $100 to $450. You might also encounter application, origination, and administrative fees, as well as annual maintenance fees of up to $250.
Tax Benefits and Considerations
If you move forward with a HELOC, you’ll incur some costs. But you can also deduct the interest on your HELOC, provided the funds are used to improve your primary residence. The current tax guidelines for this deduction are set to last through 2025. Talking with a tax advisor can help you garner the deduction (you’ll need to itemize), and a tax expert will also keep tabs on how this deduction shapes up for 2026 and beyond.
Alternatives to HELOCs
There are other ways to get equity out of your home, such as home equity loans and refinancing, and it’s worth considering all of your options before making a firm commitment to a HELOC, especially if you are uncertain about your ability to manage changing payments resulting from a variable rate. Here are some options:
Home Equity Loan
Unlike HELOCs, home equity loans provide a lump-sum amount and are paid back at a fixed interest rate. You can usually access up to 85% of the equity you’ve accumulated in your home. Lenders like to see a credit score of 680 or higher, and many prefer 700+ for the best rates. The monthly payments on these loans are predictable. A home equity loan calculator can help you see how much you might be able to borrow with this loan type.
Cash-Out Refinance
A cash-out mortgage refinance is another method you can use to borrow based on your equity. In this case, you would refinance your mortgage for more than you currently owe and pocket the difference. Typically, you’ll need a credit score of 620 or higher and a DTI ratio below 43%. If you are thinking about a cash-out refinance vs. a home equity line of credit, one difference is that with a refi, you can choose a fixed or variable interest rate.
Personal Loan
A personal loan is typically unsecured and repaid in regular, fixed installments over a relatively period of two to seven years. The key benefit here is that your home is not at risk of foreclosure should you encounter financial challenges. Most lenders look for a credit score of 610 or higher when considering a personal loan application. While the process is relatively swift, personal loan interest rates are often higher than those of HELOCs or home equity loans.
The Takeaway
When mulling over a HELOC, consider both the pros and cons. HELOCs may offer lower initial interest rates and the freedom to borrow as needed, which can be useful when your expenses are unpredictable. Yet it’s important to remember that defaulting could put your home at risk. In St. Louis, HELOC rates can vary by lender, so it’s wise to do your homework and compare rate offers to ensure the HELOC you choose is a fit for your long-term financial plans.
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 a HELOC be used for?
The beauty of a HELOC is that it can be used for any expense you need to cover. Many people use a HELOC to cover home renovations or education expenses. It can also be used for debt consolidation. It works like a credit card, allowing you to draw funds as needed and initially pay interest only on the amount borrowed. This flexibility makes it ideal for ongoing projects, though some people just like to have a HELOC available in the event that they have unforeseen costs.
Is a HELOC a wise move at this time?
A HELOC is a smart choice if you need to borrow because you’ll only pay interest on the portion of the credit line that you actually use. HELOCs also tend to have lower interest rates than personal loans. And if you use your HELOC to significantly improve your home, the interest charges could be deductible on federal taxes. As long as you are able to manage the HELOC’s payments, which will change periodically due to its variable interest rate, this can be a relatively cost-efficient way to borrow.
What’s the monthly payment on a $100,000 HELOC?
Your monthly HELOC payments will vary based on the interest rate and the repayment period. During the draw period, which typically lasts 10 years, you’ll usually make interest-only payments. Once the repayment period starts, you’ll pay both the principal and interest. If you borrowed the full $100,000 during the draw period and had an 8.00% rate, you might pay around $667 per month. Once the repayment phase kicks in, you would start paying down the principal, which would adjust your monthly payment upward to $1,213. Remember, HELOCs have variable interest rates so your exact numbers may differ.
Do you need an appraisal for a HELOC?
An appraisal is generally required for a HELOC to establish the current market value of your home. This figure is crucial for lenders to calculate the equity you have and to determine the maximum credit limit they can extend. The process can differ from one lender to another, so it’s wise to inquire about their specific requirements during your application process.
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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.
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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