TUCSON HELOC RATES TODAY
Current HELOC rates in
Tucson, AZ.
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 Tucson.
Key Points
• The home equity line of credit (HELOC) interest rates offered by lenders in Tucson are influenced by the prime rate and overall economic conditions, with the borrower’s financial profile also playing a role.
• HELOCs offer a flexible way to pull equity from your home; you only pay interest on the funds you use via the credit line.
• Generally, a HELOC has a variable interest rate. This can lead to unpredictability, since your rate, and future monthly payments, can go up or down.
• You’ll generally need to have at least 15% equity in your home and a credit score of 640 or better to qualify for a HELOC, and you’ll have to meet other qualifying factors as well.
• If you default on your HELOC, a foreclosure on your home is a possible consequence.
Introduction to HELOC Rates
This guide to HELOC interest rates brings together all the information you need if you are a homeowner wanting to know how to get equity out of your home in Tucson, Arizona.
If you have been working to pay down your home loan month-to-month and accumulating significant equity in your residence, you may be wondering if a home equity line of credit is the key to paying for an update to your living space, investing in your child’s (or your) educational goals, or consolidating higher-interest debt. Our guide will help you find resources and equip you to make well-informed choices, filling you in on the factors that sway home equity loan rates, these financial tools’ advantages and potential pitfalls, and the secrets to finding favorable lenders and terms for your HELOC.
Just what is a home equity line of credit, anyway? Read on to find out exactly what a HELOC is, what it can do for you, and how to determine if it is the right choice for you.
What Is a HELOC?
A HELOC is a revolving credit line that will allow you to tap into equity you’ve built in your home. Because it is a line of credit, you can use a HELOC to borrow the money you need in increments — up to a maximum amount your lender sets, but only as you need the cash.
You will typically need to have accumulated 15% or more equity to qualify, and you should be able to borrow up to 90% of the equity you’ve got. As a homeowner, you will want to have a repayment plan. Missing HELOC payments will put your home at risk for foreclosure.
A HELOC has two phases:
The Draw Period
In the initial draw period, often lasting 10 years, you’ll be able to access HELOC funds in increments, as you have a need for them. During this phase, you will have to pay interest on the money you borrow to your lender, but most likely you’ll be able to wait till later to start paying down the principal. You will need to do that if you max out the credit line and want to draw on it again. A HELOC interest-only calculator is a useful tool to help you compute just what you’ll have to pay during this phase.
The Repayment Period
When you reach the end of the draw period, a repayment period of 10 to 20 years will begin. More than likely, your monthly payments will increase now. This is because you’ll start paying off not only the interest accruing on the credit you’ve used, but the principal, too. HELOC interest rates tend to be variable, or adjustable, and that means that your rate may change, and your monthly payment amount could rise or fall along with it. During this phase, a HELOC monthly payment calculator can help you predict how interest rate fluctuations might influence the payments you’ll have to make each month.
How Do Lenders Determine HELOC Interest Rates?
Lenders tend to set HELOC interest rates, along with those for different types of home equity loans, by looking at the prime rate. This key interest rate is at least somewhat influenced by the Federal Reserve and its policies. Lenders may add their own margins to the prime rate when determining the interest rates they’ll offer, and they always consider a borrower’s credit score, debt-to-income (DTI) ratio, income, and accrued home equity. That is why lenders offer unique, varying rates. It’s also why it’s a smart idea to look for quotes from multiple lenders before you take out a HELOC.
How Interest Rates Impact HELOC Affordability
What can appear to be a small difference between two lenders’ HELOC rates can make a big difference in the cost of your home equity line of credit in the long run. Your rate on a $50,000 HELOC with a term of 20 years, for example, may differ from another borrower’s by one insignificant-seeming percentage point, from 7.00% to 8.00%. If you got the higher rate, your monthly payment would be about $30 more than if you had the lower one — and the total interest you’d pay over the HELOC’s life would be nearly $7,000 more.
Keep in mind, the more you borrow with a HELOC, the greater effect you will see from even a slight interest rate increase or decrease. Even a fraction of a percentage point can affect the big picture, so you need to keep an eye on what comes after the decimal point.
Check out this chart comparing HELOCs at different credit limits, terms and interest rates.
| Repayment Amount | 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
If you can keep an eye on the prime interest rate, it will benefit you, since this fluctuating number may successfully clue you in on the direction HELOC rates will be heading. The prime rate has seen significant ups and downs since 2018 — it hit a 3.25% low in 2020 and a high of 8.50% in 2023.
If you can understand this key rate’s historical patterns, you’ll gain a helpful perspective in considering lenders’ rates. Many borrowers try to time their HELOC applications to coincide with a rate dip, but it’s difficult to do, and other, possibly more effective strategies are out there to help you increase the chances you’ll get the best rate available. Let’s discuss those 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
Adjustable vs. Fixed Interest Rates
If you decide to move forward with a HELOC, you’ll want to look at lender offers for starting rates, but also for specifics like how often a rate may change, and if it will likely be capped at some point. A HELOC might be just the right choice for you, if you can handle a bit of financial uncertainty from time to time.
Helpful Tools and Calculators
Before obtaining a HELOC, you will want to check out online tools and try using them to estimate your costs. Here are some useful ones to try out if you think you want to borrow against your home equity.
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 Can a Homeowner Qualify for a Competitive HELOC Rate?
Trying to grab the best HELOC rate out there? Your credit score, debt-to-income (DTI) ratio, and level of home equity will be important factors in the equation. Lenders will typically look for you to have built up at least 15% equity in your home — although more will be even better. Follow these tips and you can ensure your finances are up to par before starting your application.
Improve Your Credit Score
Keep your credit score at 700 or better. This is key to unlocking the top HELOC rates. You can slowly but surely nudge your number up by paying your bills on time and paying down, or off, your credit card balances. Be sure to review your credit report, too — you may discover inaccuracies. If you dispute and resolve errors, you can ensure that your score truly reflects your level of financial responsibility.
Calculate Your Debt-to-Income Ratio (DTI)
Completing a simple equation will give you your DTI ratio: Divide your total monthly debt payments by your gross monthly income. Most HELOC lenders want to see a DTI under 50%. But if you want to qualify for Tucson’s best interest rates on HELOCs, you’ll want to try to get yours down below 36%. Try to pay down debt you’re carrying, or increase your earnings — either way, you’ll enhance your financial profile.
Applying for a HELOC in Tucson
By making the effort to get prequalified online, you’ll get a preview of the HELOC rates available to you in Tucson, plus an estimated credit line amount you may qualify for. You can scope out the various lenders and rates before moving on to complete the full application, which requires a lot more financial details and specific property information.
Step 1: Run the Numbers
Before you apply for a HELOC, take a detailed look at your finances. Go over your credit scores from all three major credit bureaus. Crunch the numbers to find your debt-to-income (DTI) ratio. Next, calculate your home equity level — and keep in mind that it will grow as you make your monthly mortgage payments, improve your property, or enjoy home values going up in the area where you live. To find out about how much equity you have, take your outstanding mortgage balance and subtract it from your home’s estimated value, then divide the answer by that estimated home value figure. The percentage you’ll arrive at is that magic number. As we’ve noted, you’ll need 15% equity or more if you want to move forward on a HELOC.
Step 2: Compare Lenders
To find Tucson’s best HELOC lenders, and the right match for you, compare them closely. You want to determine which offer the best interest rates and terms, not only by looking at advertised rates, but by reading the qualification requirements, the minimum and maximum amounts you may borrow, the draw and repayment periods, and various fees, all of which will probably vary among lenders. Spending some time shopping around can reveal a lot. And reading the fine print regarding terms and other details is an important step before committing.
Step 3: Submit Your Application
You’ll need to gather your paperwork, including a government-issued ID, stubs from recent paychecks, W-2 forms, and copies of your last tax return. Lenders may ask to see a profit-and-loss statement, in addition to two years’ of tax returns, if you are self-employed. In addition, you’ll need to provide property documentation, including a homeowners insurance declaration page. You can often submit a HELOC application online, by phone, or in person.
Step 4: Get an Appraisal
What is an appraisal? It’s the analysis of an objective professional that documents your home’s value. A home appraisal typically costs between $300 and $600. You’ll need the appraisal result to exceed your current mortgage balance in order to be approved by a HELOC lender — an important step that helps determine how much equity you can potentially access. Lenders also use appraisal results when they determine your HELOC agreement’s specific terms.
Step 5: Prepare to Close
Once you’ve attained approval, but before you’ll be able to access HELOC funds, you will need to sign your HELOC agreement. You’ll also have to settle your line of credit’s closing costs. Ask about all fees; you should know every cost involved before closing on your HELOC. Some lenders make funds available right after closing, but with others there may be a wait.
Closing Costs and Fees
HELOCs usually involve lower closing costs than home mortgage loans or cash-out refis. The biggest expense tends to be for the appraisal. You may be required to pay for that appraisal, plus a title search, an origination fee, and other administrative fees. Some lenders charge annual maintenance fees that could be up to $250 per year. Note: A lender might offer to reduce or waive closing costs, but that can be in exchange for a higher interest rate (not necessarily a good deal, even if it makes closing easier).
Recommended: HELOC vs. Home Equity Loan
Tax Benefits and Considerations
Homeowners are allowed by the IRS to deduct HELOC interest, currently in cases where they use the funds borrowed to make significant improvements on their primary residence. This policy could change, though. Talk to a tax advisor to be sure deductions apply to your circumstances, and save every invoice and receipt.
HELOC Alternatives
You have options other than a HELOC for getting equity out of your home. These include a home equity loan or a cash-out refinancing, in addition to a personal loan. All the choices have plusses and minuses, depending on your situation. Before you decide on a HELOC, consider every option.
Home Equity Loan
What is a home equity loan? It offers a borrower a loan at a fixed interest rate, and in the form of a lump sum. You can typically use a home equity loan to borrow up to 85% of the home equity you’ve accrued. Lenders tend to look for a credit score of 680 or higher, and many would like your score to top 700 if you want their best rate.
This is a great option if you have a specific need for a defined amount of money, and if you prefer a fixed monthly payment that stays the same over the life of the loan. You can use a home equity loan calculator to determine the maximum loan amount you should qualify for.
Cash-Out Refinance
Another option is a cash-out mortgage refinance, which will let you borrow more than you currently owe on your mortgage and collect the extra funds in cash. If your credit score is 620 or above and your DTI ratio is less than 43%, this option should be open to you. You choose between a fixed or variable rate.
What’s the actual difference between a cash-out refinance vs. home equity line of credit? The refinance option requires only one monthly payment, while with a HELOC you’ll have two: one for your mortgage, and one for the credit line.
Personal Loan
If you choose this option, you won’t risk foreclosure if you find yourself unable to make a payment. A personal loan is typically unsecured, so your home doesn’t serve as collateral. Borrowers typically repay personal loans in fixed installments over a term of two to seven years. Lenders will probably look for your credit score to be 610 or higher with this pick, which is relatively speedy to secure, but also tends to carry a higher interest rate than a HELOC.
The Takeaway
If you’re considering a HELOC in Tucson, weigh both the potential benefits and the possible risks you’ll be taking on. HELOCs offer financial flexibility and may carry more attractive interest rates than other options, making them an attractive borrowing choice if you’re managing large, ongoing expenses. But they come with risks, too — especially the one of losing your home should you default. Realistically assess your financial situation before you take out a loan. You’ll likely need a credit score of 640 or up to qualify. Look at multiple lenders’ rates if you think a HELOC is right for you.
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
Is a HELOC a wise move at this point?
If you want flexibility to access funds in increments for big expenses, and you feel comfortable with the idea of a variable interest rate, a HELOC could be a good move for you — especially if you are seeing forecasts of a drop for the prime rate. But if the stability of fixed payments feels like a better fit for you, a home equity loan might be your better choice.
What would the monthly payment be on a $100,000 HELOC?
It would depend on the interest rate, repayment terms, and how much of the credit line you use upfront, but if you borrow the full $100,000 and have an 8.00% rate, the payment on a $100,000 HELOC would be around $667 each month, for interest in the draw period. During the repayment phase, the payment would go up, since you’d start paying down the principal. It would rise to more than $1,200. And since HELOCs have variable interest rates, a shifting rate could impact your payment, too.
Do you need an appraisal to get a HELOC?
Yes, you do. You will need a home appraisal to obtain a home equity line of credit, but your best bet is to wait for instructions from your potential lender — you want your home to be appraised in accordance with that institution’s terms. An appraisal helps a lender determine your home’s current market value, and will influence the amount the lender will approve you to borrow.
Will a HELOC impact your credit score?
When you open a HELOC, it will involve a hard inquiry on your credit report. This can cause a slight, temporary credit score dip. But when you manage your HELOC responsibly, it can also positively impact your credit score down the line. (Missing payments, on the other hand, will make you appear less creditworthy in the future.)
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-Q225-400
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