Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Key Points
• Fort Lauderdale’s home equity loan rates, like these rates nationally, tend to be lower than the rates on unsecured personal loans.
• The rates you’re offered will depend on a few factors, including not only the larger economy, but also your credit score and debt-to-income (DTI) ratio.
• Fixed rates offer the benefit of predictability, while adjustable rates can be a smart way to save money in the short term.
• Specialized online tools and calculators can help you estimate payments and interest costs for different loans.
• If a home equity loan doesn’t seem right for you, but you’d still like to tap your equity, consider alternatives like a home equity line of credit (HELOCs) and cash-out refinance.
Welcome to our guide on Fort Lauderdale home equity loan rates.
Here, we’ll take a deep dive into the current landscape of home equity loans, explaining how their rates are determined and what factors can influence them. You’ll learn about the benefits and risks of different types of home equity loans, how to compare loans, and strategies to secure the lowest rates. Whether you’re planning a home renovation, consolidating debt, or funding a significant purchase, this information will help you make the most of your home equity while minimizing financial risk.
If you’ve been wondering how to get equity out of your home, a home equity loan might be an option to consider. What is a home equity loan? It’s a loan that uses your house as collateral to secure it.
A home equity loan is typically given to you in a lump sum that you repay in monthly installments over a period of five to 30 years. Because these loans are secured by your property, they often come with lower interest rates than unsecured personal loans. The interest rate is generally fixed, which can make budgeting easier. To qualify, you’ll typically need at least 20% equity in your home. Equity is calculated by subtracting your mortgage balance from your home’s market value.
Fort Lauderdale’s home equity loan interest rates are the result of a combination of economic trends and the personal financial situation of the borrower. Federal Reserve policy has a major impact on the lending market. Home equity loan lenders typically set their rates based on the prime rate. When the prime rate rises, home equity rates follow.
Your credit score and debt-to-income (DTI) ratio also play a significant role in the interest rate lenders offer you. And generally, the higher the loan amount and the longer the term, the higher the interest rate is likely to be, as these factors present an increased risk to the lender.
Home equity loan interest rates aren’t just numbers on a page. They can make a world of difference in how much you’ll pay over the life of your loan. Even a seemingly inconsequential rate difference can have a big impact. Let’s say you’re considering a $100,000 home equity loan with a 15-year repayment term. At an 8.50% interest rate, your monthly payment would be approximately $986, with total interest over the loan’s life adding up to $77,253. But if that rate were 9.50%, your monthly payment would be around $1,044 and the total interest you’d pay would rise to approximately $87,960. That’s more than $10,700 extra you’d pay over the 15 years with the higher rate.
The chart below shows more about how changes in your loan amount, interest rate, and term can result in different monthly payments.
| 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 |
Home equity loans often come with fixed interest rates, which means your monthly payments will remain the same over the loan’s duration. Some home equity loans may be available with adjustable rates, as are home equity lines of credit (HELOCs) and cash-out refinances, so it’s a good idea to consider which would work better for you.
A fixed rate doesn’t change, even when the market does. And knowing exactly what your monthly payment will be every month can make budgeting easier to manage. Adjustable rates generally kick off lower than fixed rates, but payments over the life of the loan are unpredictable, since the rates are subject to market changes. If market rates stay low, your rate follows suit, but if rates shoot up, your payments will rise, too.
As you’re considering the choice, think about your financial situation and how comfortable you are with risk. Fixed rates can be a good option for homeowners who value predictability, while adjustable rates might work for those who are more flexible and can handle potential payment increases.
As we’ve mentioned, many things affect home equity loan rates, but the prime rate is particularly significant, so let’s look at its trends over time.
The prime rate can fluctuate significantly. Just take a look at its recent past: Dipping to a mere 3.25% in 2020, it then steadily rose to 8.50% in 2023.
| Date | Prime 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 | 5.50% |
| 9/27/2018 | 5.25% |
Naturally, these changes have a direct impact on home equity loan rates and their changes. What’s a savvy homeowner to do? Keep your ear to the ground on economic shifts so you can time your search to take advantage of lower rates, and work to get your own financial situation in order so you’ll be ready when the time comes.
To snag rock-bottom Fort Lauderdale home equity loan rates, you need to present a solid financial profile. Lenders will scrutinize your credit score and debt-to-income (DTI) ratio, among other factors, to determine the rate you’re offered. Knowing in advance what exactly they’re likely to be looking for can help you prepare a good case.
Even if you haven’t decided yet on a HELOC vs. a home equity loan or cash-out refinance, the tactics are the same to secure the most favorable interest rates.
To be eligible for a home equity loan, you’ll need to have at least 20% equity in your home. It’s easy to calculate how much equity you have: Subtract your mortgage balance from your current home value. If your mortgage balance is $400,000 and your home is valued at $550,000, for example, your home equity is $150,000.
Most lenders will let you borrow up to 85% of your equity, which means you could potentially take out a loan for up to $127,500 in the example above.
You can boost your equity by making extra mortgage payments, investing in home improvements, or holding off on applying for a loan until you’ve built up more equity through home appreciation.
To snag the most favorable home equity loan rates, you’ll need to show lenders a robust credit score. Lenders typically want to see a score of 680 or higher, with many favoring the 700+ range. A higher credit score indicates a history of financial responsibility, signaling to lenders that you’re probably a safe bet, and that impression can translate to more attractive loan terms.
If you make timely payments and keep your credit card balances in check, you’re on the right track to a good credit score. It’s also smart to check your credit report for any inaccuracies and correct them before you apply.
Your debt-to-income (DTI) ratio is crucial when it comes to qualifying for a home equity loan and scoring the best rates. You can calculate your DTI ratio by dividing your total monthly debt payments by your gross monthly income. A lower DTI ratio tells lenders that you’re in a good position to handle your monthly payments. Lenders typically want to see a DTI ratio under 50%, but 36% or lower is preferred.
To improve your DTI ratio, consider chipping away at existing debts or exploring ways to increase your income, which could include anything from side hustles to career advancements.
Property insurance is a must-have for home equity loans, especially in areas like Fort Lauderdale, where hurricanes are a possibility. Lenders will want to see that your home is well-protected. Make sure your policy covers the full value of your home and includes additional protections, like flood insurance, if necessary. Not only will this help you meet lender requirements, but it will also protect you from damage costs.
When it comes to understanding and comparing home equity loan rates in Fort Lauderdale, online tools and calculators are your friends. There are many different kinds that can give you different information. A home equity loan calculator can show you what loan amount you might qualify for. Other tools can help you get a handle on monthly payments, the total interest you’ll pay over the life of the loan, and the differences between various loan terms. By plugging in your own financial details to these and other calculators, you’ll be able to make informed decisions and find the best home equity loan rates for your budget and financial goals.
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
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.
If you take out a home equity loan, you should be aware that you probably need to pay closing costs. Closing costs for home equity loans typically range between 2% and 5% of the loan amount. The chart below shows some common costs.
| Service | Typical Fees |
|---|---|
| Appraisal | $300-$500 |
| Credit report | $30-$50 or more |
| Document prep | $100-$500 |
| Loan origination | 0.5%-1.0% of the loan amount |
| Notary | $20-$100 |
| Title insurance | 0.5%-1.0% of the loan amount |
| Title search | $75-$250 or more |
There are some lenders who offer no-closing-cost loans, but those loans may come with higher rates.
There’s another potential benefit of home equity loans to take into account. If you’re using the loan to improve your home, the interest on your home equity loan may be tax deductible. For single filers, interest is deductible on the first $375,000 of loan debt. Spouses filing together can deduct the interest on up to $750,000 of debt. But remember that you’ll need to itemize if you want to claim this deduction. Consult your tax advisor to get the most up-to-date information.
While standard home equity loans are a popular choice, you might want to explore different types of home equity loans, such as a home equity line of credit (HELOCs) and a cash-out refinance, a type of mortgage refinance. Each of these has its own unique features and requirements.
What is a home equity line of credit? A HELOC is similar to a credit card, but it’s backed by your home equity. It can provide you with a flexible way to borrow funds up to a set amount, with interest payments required only on the amount you use. In the initial “draw” period, you may only have to pay interest on what you use. Afterward, during the repayment period, you pay back the principal and any additional interest. HELOCs usually come with variable interest rates, which can be challenging if you’re on a strict budget.
Lenders usually look for a credit score of 680 or higher (700 is even better) and a debt-to-income ratio below 50% (though 36% or less is best). They generally allow you to borrow up to 90% of your home equity. If you’re comfortable with the fluctuations of variable rates, a HELOC could be a good choice.
To see what your monthly payments for a HELOC would be, use a HELOC monthly payment calculator. And to learn how much interest you pay during the “draw” period of a HELOC, try a HELOC interest-only calculator.
A cash-out refinance lets you replace your existing mortgage with a larger one, tapping into your home’s equity to get a cash sum in addition to a new home loan. Lenders typically allow you to borrow up to 80% of your home equity.
If you’re looking at the merits of a cash-out refinance vs. home equity line of credit, note that the standards for borrowing differ. Lenders usually want to see that you have a credit score of 620 or above and a debt-to-income ratio of 43% or less. Cash-out refinances can have either fixed or variable rates, with the latter often offering more equity access.
When you’re ready to apply for a home equity loan in Fort Lauderdale, you’ll want to make sure your credit is in good shape, your debt-to-income ratio is under control, and you have property insurance. These factors can affect the rates you’re offered, which impacts the affordability of your loan over the long term. Use online calculators to estimate your monthly payments and the total interest you’ll pay over the life of the loan. Finding the right loan – one you can afford and use to best effect – can help you achieve your goals and stay on track financially.
SoFi now offers home equity loans. Access up to 85%, or $350,000, of your home’s equity. Enjoy lower interest rates than most other types of loans. Cover big purchases, fund home renovations, or consolidate high-interest debt. You can complete an application in minutes.
Unlock your home’s value with a home equity loan from SoFi.
Home equity loans can be used for a wide variety of purposes: a major purchase, a home overhaul, or wrangling high-interest debt, for example. And if you do use a home equity loan for home improvements, the interest may be tax deductible. Just remember, as with any loan, be sure to keep up with payments to steer clear of any foreclosure risk.
Your monthly payment for a $25,000 home equity loan will be influenced by the loan rate and term. For instance, a 15-year fixed-rate loan at 7.00% interest would mean a monthly payment of approximately $225. Additional expenses such as property taxes and insurance would be separate. To find the payment for your loan terms, use a home equity loan payment calculator.
The monthly payment on a $30,000 home equity loan varies depending on the loan term and the interest rate. For example, with a 20-year fixed-rate loan at 7.50% interest, you could expect to pay around $242 per month. For an estimate using different loan rates and terms, consider using a home equity loan payment calculator.
Home equity loans can be a smart choice for many reasons. They usually come with fixed interest rates and predictable monthly payments, which can be a plus when you’re planning your budget. Because they’re secured by your home, you’ll often find that the rates are lower than those of unsecured personal loans. They can be well-suited for big, one-time expenses like home improvements, debt consolidation, or making a significant purchase. And here’s a potential bonus: The interest you pay on home equity loans for home improvements may be tax-deductible.
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.
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-Q225-327
