IDAHO HOME EQUITY LOAN RATES TODAY
Current home equity loan rates in
Idaho.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Current home equity loan rates in
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Compare home equity loan rates in Idaho.
Key Points
• Home equity loan rates in Idaho vary based on credit score, loan-to-value ratio, and lender policies.
• Home equity loans offer a lump-sum payment repaid with regular installments, typically with fixed interest rates and repayment terms ranging from five to 30 years.
• Home equity loan interest rates are influenced by the prime rate and various economic factors.
• Home value stability, lender policies, and property location also influence Idaho home equity loan rates.
• To qualify for the lowest rates, borrowers should establish a robust credit score, manage their debt-to-income ratio, obtain adequate property insurance, and maintain sufficient home equity.
Introduction to Home Equity Loan Rates
This guide will help you become knowledgeable about Idaho home equity loan rates, which can vary depending on your financial situation, the lender you’re working with, and the country’s larger financial environment. We’ll walk you through the factors that affect rates, help you understand the different types of home equity loans, and provide advice for getting the best deal on your loan. We’ll also cover what is a home equity line of credit (HELOC) and how it’s different from a home equity loan.
How Do Home Equity Loans Work?
Let’s start with the basics: What is a home equity loan, exactly? With a home equity loan, you leverage your home’s value to secure a loan with a lower interest rate than a personal loan. So if you are still paying off your mortgage, a home equity loan is a second mortgage. With a fixed interest rate and a repayment term that can be anywhere from 5 to 30 years, it’s a flexible and affordable option.
To qualify, homeowners typically need to have at least 20% equity in their property. Not sure what that means? Your equity is the difference between what you owe on your mortgage and what your home is currently worth.
Where Do Home Equity Loan Interest Rates Come From?
Home equity loan interest rates are a product of larger economic factors, including the prime rate. This is the rate at which banks lend to their most creditworthy clients. Federal Reserve interest rate policies play a role in influencing banks’ prime rates. So keeping up with the news on shifts in Fed rates may give you a sense of how home equity loan rates might fluctuate.
How Interest Rates Impact Home Equity Loan Affordability
The interest rate you secure can have a big impact on your monthly payments and the amount you pay over the life of the loan. For example, a 20-year home equity loan of $50,000 with an interest rate of 5.00% would have a monthly payment of approximately $330. But with a 1% higher rate, the monthly payment would be about $358. That’s an extra $28 per month for the same loan. Over the life of the loan, that 1% higher rate would cost you an additional $6,777.
Home Equity Loan Rate Trends
The prime interest rate is a key number to watch, as it can be a harbinger of where Idaho home equity loan rates are headed. Since 2018, the average prime rate has seen some ups and downs, hitting a low of 3.25% in 2020, as the chart below shows. The graphic shows the fluctuations of the prime rate over a much longer period of more than 50 years.
Historical Prime Interest Rates
| 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% |
Source: St. Louis Fed
Source: TradingView.com
Factors Influencing Home Equity Loan Rates
In the state of Idaho, several factors come into play when determining the rates for home equity loans. Many of these were likely also important when you took out your first home loan. Lenders take a close look at these factors to understand the risk associated with your application and to set an interest rate that is fair and responsible for both you and the lender.
Credit Score
Your history of managing debt and making timely payments is a significant factor in the interest rate you’ll be offered. Generally, a credit score of 680 or higher is preferred by lenders for home equity loans, with many looking for scores of 700 or more.
Home Value
Lenders will typically use an independent appraisal to determine the market value of your home, which will then be used to determine the maximum amount you can borrow. This process will also help to establish how much equity you have in the home. The appraisal report is an important part of the lending process and is used to make sure that the loan amount is appropriate and that the lender is making a responsible loan.
Loan-to-Value (LTV) Ratio
Once you know the home’s value, you and your lender can compute the LTV ratio. It’s calculated by dividing the loan amount by the property’s appraised value. If you are still paying off a first mortgage, you’ll add what you owe on that loan to the amount you’d like to borrow and then divide by the home value for a combined LTV. Most lenders cap their LTV at 85%.
Home Value Stability
The ebb and flow of home values have a direct impact on the equity you can tap into. When the market is on the upswing, lenders are more open to green-lighting heftier loans, as the increased value of your property acts as a safety net. But when the market takes a dip, lenders might tighten their belts, which could mean more stringent requirements and smaller loan amounts.
Property Location
Living in areas that are more susceptible to damage from wildfires, flooding, or other climate extremes can sometimes mean higher interest rates. Lenders might see these areas as riskier bets. If you live in an area like this, you might have to meet additional requirements to get a home equity loan in Idaho, and you could have a higher interest rate.
Lender Policies
Each lender has its own policies, and these can have an impact on the interest rate you’re offered or the fees you’ll pay. To make sure you’re getting the best deal, it’s a good idea to shop around and compare interest rates, fees, and closing costs from a few different lenders.
How to Qualify for the Lowest Rates
There are a few steps you can take to ensure you get the best interest rates on an Idaho home equity loan. Here’s your to-do list:
Build a Strong Credit Score
It’s a well-known fact that a higher credit score often translates to better home equity loan rates. Tending to your credit score means paying your bills on time, checking your credit reports now and then to ensure there are no errors (and fixing any that you do find), and trying not to get to the max on every credit line you have. These habits will help you build credit over time in Idaho.
Manage Debt-to-Income Ratio
Your debt-to-income (DTI) ratio, which compares your monthly income to your monthly debt obligations, is a key factor in determining your loan eligibility. Lenders usually want to see a DTI ratio below 36% when considering you for a home equity loan, though some will go as high as 50%. To compute your DTI ratio, add up all your monthly debts (student loan, car loan, etc), divide by your gross monthly income, and multiply that result by 100.
Obtain Adequate Property Insurance
In the world of home equity loans in Idaho, having enough property insurance is a must, especially in areas that are prone to flooding. This insurance requirement is in place to protect both you and your lender, so you can both have peace of mind and financial protection in the event of a disaster.
Maintain Sufficient Home Equity
You’ll need to keep at least 20% equity in your home to be eligible for a home equity loan. This is a safety net for both you and the lender, ensuring you’re not overextending yourself and that the lender’s investment is protected.
Fixed vs. Variable Interest Rates
Home equity loans in Idaho usually come with fixed interest rates. This means you’ll have the same interest rate and monthly payment for the life of the loan. While this can provide stability and predictability, it can also mean that you’ll start out with a higher interest rate than you would with a variable-rate loan.
Tools & Calculators
Taking advantage of online tools and calculators can help you estimate your home equity loan payments. These are a few of our favorite resources, which can help with both a home equity loan and a home equity line of credit (HELOC).
Run the numbers on your home equity loan.
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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.
Closing Costs and Fees
Closing costs for a home equity loan typically range from 2% to 5% of the loan amount. The charges may include the cost of the appraisal, credit report, document preparation, and title insurance. Every lender has its own fee structure, so it’s important to shop around and compare multiple lenders, as fees can vary.
Tax Deductibility of Home Equity Loan Interest
The interest you pay on a home equity loan or HELOC can be tax-deductible if you use the funds to significantly improve your home. Those who file jointly can deduct interest on the first $750,000 they borrow, while for single filers the limit is $375,000. Remember, you’ll need to itemize your deductions to claim this benefit so you may need to work with a tax preparer.
Alternatives to Home Equity Loans
When you’re looking at other ways to get equity out of your home in Idaho, it’s crucial to understand the differences between a HELOC, an HECM (home equity conversion mortgage), and a cash-out refinance. Taking the time to explore these options with a prospective lender can help you make an informed decision that will align with your financial goals.
Home Equity Line of Credit (HELOC)
A home equity line of credit (HELOC) is akin to a credit card (but with notably lower interest rates). It grants you, the homeowner, the flexibility to borrow as needed up to a predetermined credit limit, paying interest only on the amount withdrawn. The variable interest rates on HELOCs are subject to market changes, and this could mean increased costs if rates take an upward turn. Here’s a look at HELOCs vs. home equity loans:
| 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 |
Home Equity Conversion Mortgage (HECM)
For those 62 and over, the government-insured HECM program offers a lifeline. It allows you to receive payments based on your home’s value, either as a lump sum, regular disbursements, or a line of credit. You only pay the loan back when you leave your home. Unlike traditional home equity loans or HELOCs, HECMs don’t require monthly payments, but they do come with higher upfront costs and a longer application process. (While SoFi does not offer HECMs at this time, we do offer home equity loans and HELOCs.)
Cash-Out Refinance
A cash-out refinance is a special type og mortgage refinance that’s like hitting two birds with one stone. You get a new mortgage to settle the old one, and you can pocket some cash to use however you wish. As noted above, most lenders will let you borrow up to 85% of your home’s value. As you consider a cash-out refinance vs. a home equity line of credit, one thing to think about is current interest rates. If the rates now are significantly higher than your current mortgage rate, it might not make sense to refinance, and a HELOC or home equity loan could be a better option.
The Takeaway
Knowing the most competitive home equity rates in Idaho and the lenders that offer them can help you make a wise decision. By comparing rates, using financial tools and calculators, and exploring all your borrowing options, you can find the home equity product that best meets your needs and goals.
Unlock your home’s value with a home equity loan from SoFi.
FAQ
What’s the monthly payment on a $50,000 home equity loan?
If you borrow $50,000 with a home equity loan and pay it back over 10 years, the monthly payments could range from $530 to $607, depending on your interest rate (this range is from 5.00% to 8.00%). But remember: The two main factors that will affect your payments are the interest rate and the loan term, so changes in either of these will change your payment.
What is the monthly payment on a $100,000 HELOC?
If you’ve maxed out your HELOC and are paying it back over 20 years at a rate of 7.00%, you can expect to pay $775 per month. Of course this is just an example. You can use a HELOC repayment calculator to compute the number for your exact interest rate.
What is the payment on a $25,000 home equity loan?
Borrow $25,000 with an interest rate of 8.00% and a term of 5 years, and you’re looking at a monthly payment of $507. Change either the interest rate or the term (or both) and your payment amounts will change as well.
How about a $30,000 home equity loan? What would that cost?
The monthly payment on a $30,000 home equity loan will depend on the interest rate and the loan term, but a 10-year term and 8.00% interest rate would mean a monthly payment of $364.
What might disqualify you from getting a home equity loan?
There are a number of factors that can prevent you from getting a home equity loan. These can include having a low credit score, having a high debt-to-income ratio, lacking 20% equity in your home, or not having enough insurance on your property.
What are the benefits of a HELOC?
HELOCs have a variety of benefits, including flexible borrowing, lower interest rates than many credit cards, and the ability to pay interest on only the amount of the credit line that you’ve used. These benefits make HELOCs a great financial tool for homeowners who need a flexible and cost-effective credit solution that fits their unique financial needs and long-term goals.
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*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.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee. 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.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
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More home equity 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