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Compare home equity loan rates in Kansas.
Key Points
• Home equity loans provide homeowners with access to funds based on the equity built up in their homes.
• Home equity loan interest rates are influenced by various factors, including credit score, loan-to-value ratio, prevailing market conditions, and individual lender policies.
• Home equity loans offer a fixed interest rate, ensuring predictable monthly payments throughout the loan’s duration.
• Closing costs associated with home equity loans can range from 2% to 5% of the loan amount.
• Home equity loan interest may be tax-deductible if the loan proceeds are used for acquiring or renovating a residential property.
Introduction to Home Equity Loan Rates
Welcome to our comprehensive guide on home equity loan rates in Kansas. If you’ve built up equity in your home and need cash for a renovation or other big project, you’re in the right place to learn all about the current home equity loan interest rate environment, what determines the rate you may be offered, and how you can get the best deal. We’ll also cover the different types of home equity loans, so you can figure out which option is best for you.
Step one? Let’s review what is a home equity loan.
How Do Home Equity Loans Work?
A home equity loan uses your home as collateral. Because this type of loan is secured with your property, it typically offers lower interest rates than a personal loan. The interest rate is usually fixed, which means your payments will be consistent. To qualify for a home equity loan in Kansas, as elsewhere in the U.S., you typically need to have at least 20% equity in your primary residence. You’ll repay the loan over a term negotiated with your lender, which could be anywhere from 5 to 30 years.
A home equity loan is different from a home equity line of credit (HELOC). To learn what is a home equity line of credit, keep reading.
Where Do Home Equity Loan Interest Rates Come From?
Kansas home equity loan interest rates are a product of economic factors, with lenders’ prime rates playing a significant role. The prime rate is what banks charge their most creditworthy clients. Federal Reserve policy on interest rates helps lenders determine their prime rate. Keeping an eye on these factors might help you decide when is the best time to apply for a home equity loan.
How Interest Rates Impact Home Equity Loan Affordability
The interest rate you’re given will play a big part in how affordable your loan is over the long run. The chart below shows how different rates and terms affect the monthly payment amount. Even small increases in the monthly payment can mean significantly higher costs over the life of the loan.
| 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 Loan Rate Trends
If you’re paying attention to the prime rate lenders are offering, you might wonder what kind of changes you can expect. It helps to have a sense of the history of rates over time. The chart below shows how the prime rate has changed in recent years, hitting a low of 3.25% in 2020 and a high of 8.50% in 2023. Below that, you can see the trajectory of the prime rate over more than 50 years.
Historical Prime Interest Rates
| Date | Prime Rate |
|---|---|
| 9/17/2026 | 7.00% |
| 12/11/2025 | 6.75% |
| 9/17/2025 | 7.25% |
| 12/20/2024 | 7.50% |
| 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: St. Louis Fed
Source: TradingView.com
Factors Influencing Home Equity Loan Rates
In the state of Kansas, as elsewhere in the U.S., several factors beyond the prime rate come into play when determining home equity loan rates. Your credit score, loan-to-value ratio, home value, property location, and lender policies all contribute to the rate you’re offered. Understanding these elements will equip you to secure the most favorable rate for your loan.
Credit Score
You probably recall that when you got your home loan, your credit score was an important part of the lender’s criteria. The same is true with a home equity loan. Lenders usually want to see a credit score of 680 or higher from a home equity loan applicant, although higher scores may get you a better rate.
Home Value
Lenders often use independent appraisals to determine the market value of your property before offering a loan. This appraised value of your home is key to determining exactly how much they are willing to lend you.
Loan-to-Value (LTV) Ratio
Once you know your home’s appraised value, you and the lender can compute your LTV ratio. Your combined LTV ratio is calculated by dividing the loan amount you’re seeking plus any remaining balance on your first mortgage by the appraised value of the home. The maximum combined LTV lenders typically allow for home equity loans is around 85%.
Home Value Stability
If your home’s value is on the rise, lenders are more likely to greenlight a larger home mortgage loan, as an increasing property value helps lower their risk. But if home values in your area are dropping, lenders may tighten their belt and offer smaller home mortgage loans.
Property Location
Where your property is located can also impact your interest rate. If your home is in an area that is at a higher risk for natural disasters, you may have a higher interest rate, reflecting the fact that the lender is taking on more risk by lending in these areas. High-risk areas are those that are more likely to experience hurricanes, floods, tornados, or wildfires, for example.
Lender Policies
Each lender has its own policies that might impact the interest rate you’re offered. This is why it’s a good idea to shop around and compare interest rates, fees, and closing costs from multiple lenders. By doing your research and comparing your options, you might be able to find more favorable terms and save money over time.
How to Qualify for the Lowest Rates
There are a few things you can do to improve your chances of qualifying for the best Kansas home equity loan rates.
Build a Strong Credit Score
In the world of personal finance, your credit score is your golden ticket to better terms and rates. It’s a good idea to periodically check your credit report (and correct any inaccuracies). Don’t max out every credit card you have. And of course, pay your bills in a timely manner.
Manage Debt-to-Income Ratio
When you’re considering a home equity loan, your debt-to-income (DTI) ratio is a key player. You can compute it by adding up all your monthly debt obligations (such as a car loan or student loan) and dividing the total by your gross monthly income. Lenders are typically looking for a DTI ratio below 36%, though some lenders are willing to go as high as 50%.
Obtain Adequate Property Insurance
Sufficient property insurance is a must, for you and your lender. It protects both of you in the event of a disaster. Make sure your home is thoroughly insured before you begin the application process.
Maintain Sufficient Home Equity
As noted above, you’ll need to have at least 20% equity in your home to qualify for a home equity loan.
Fixed vs. Variable Interest Rates
Home equity loans typically come with a fixed interest rate, which means your monthly payment will stay the same over the life of the loan. While a fixed interest rate can provide peace of mind, it may also mean that you’ll start with a slightly higher rate than you would with a variable-rate loan.
Tools & Calculators
By using online tools and calculators, you can get a full understanding of your home equity loan options and what the costs will be. Use the three calculators below when thinking about the best home equity loan rates in Kansas.
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
Home equity loans typically come with closing costs that fall between 2% and 5% of your loan amount. These costs can include fees for services such as appraisals, credit reports, document preparation, title searches, and title insurance. Be sure to factor in these costs when you compare offers from different lenders.
Tax Deductibility of Home Equity Loan Interest
Here’s a tip: The interest on your home equity loan could be tax deductible if you’re using the money you borrow to significantly improve your home. Couples filing jointly can deduct the interest on up to $750,000 in home equity loans, while for single filers the ceiling is $375,000. Just remember to itemize your deductions when you file your tax return — and save your renovation receipts.
Alternatives to Home Equity Loans
Along with home equity loans, there are a few other ways to get equity out of your home: home equity lines of credit (HELOCs), reverse mortgages, and cash-out refinancing. Each option has its own set of features.
Home Equity Line of Credit (HELOC)
A HELOC is somewhat like a credit card, but one that is secured by your home. You have a set credit limit that you can borrow against, and you only pay interest on the amount you’ve borrowed. When considering a HELOC vs. a home equity loan, note that the interest rate on HELOCs is variable, which means it can go up if interest rates rise, while the interest rate on a home equity loan is usually stable.
Home Equity Conversion Mortgage (HECM)
An HECM is a government-backed reverse mortgage that allows homeowners 62 and older to receive payments based on the value of their home. The funds can be received as a lump sum, regular installments, or a line of credit. No payments are required until the homeowner leaves the home. HECMs typically have higher closing costs and longer processing times than other loan options. (While SoFi does not offer HECMs at this time, we do offer home equity loans and HELOCs.)
Cash-Out Refinance
A cash-out refinacnce is a special type of mortgage refinance.You get a new mortgage that pays off your old one and lets you pocket some cash to use for any purpose you like. Most lenders will let you borrow up to 80% of your home’s equity. If you’re considering a cash-out refinance vs. a home equity line of credit one important consideration is the interest rate for the refinance. If your original mortgage has a very low interest rate, a refi may not make sense if current rates are significantly higher.
The Takeaway
Understanding home equity loan rates and the factors that influence them can help you get your financial house in order before you apply for a loan, and then make the best decision for your personal situation once you have lenders’ offers in hand. By shopping around, using online tools and calculators, and considering all options, including a HELOC, you can achieve your financial goals with confidence.
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FAQ
What would the monthly payment be on a $50,000 loan?
To figure out what the monthly payment would be on a $50,000 home equity loan, you need to consider the current home equity rates in Kansas and the loan term. At 7.00% interest and a 20-year term, the monthly payment would be $388. Use a loan calculator for the most accurate estimate of your personal situation.
What is the monthly payment on a $100,000 HELOC?
The monthly payment on a $100,000 home equity line of credit (HELOC) can vary greatly depending on the interest rate, how much you draw on the account, and the repayment terms. If you used the full $100,000 of your credit line, your monthly payment would be $1,213 if you had a 10-year term and an interest rate of 8.00%.
What is the payment on a $25,000 home equity loan?
The monthly payment on a $25,000 home equity loan could range from around $150 to $500 depending on your interest rate (6.00% vs. 8.00%, in this example) and loan term (5 years vs. 30 years).
Curious about the payment on a $30,000 home equity loan?
When you’re considering a $30,000 home equity loan, the interest rate and the loan term will impact your monthly payments. A home equity loan calculator can help you estimate the payment you would need to make at different interest rates and loan terms.
What might disqualify you from getting a home equity loan?
There are a number of factors that can disqualify you from getting a home equity loan. They include having a credit score that’s too low, lacking adequate equity in your home, having a high debt-to-income ratio, and carrying insufficient insurance coverage on the property you want to finance. Any of these can be a red flag for a potential lender.
What are the benefits of a HELOC?
HELOCs have a lot going for them. They offer flexibility in borrowing, lower interest rates than most credit cards, and you only pay interest on the amount of the credit line that you actually use. This makes a HELOC an especially good option if you need money for a project, such as a renovation, but aren’t sure exactly what it will cost.
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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.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.
This content is provided for informational and educational purposes only and should not be construed as financial advice.
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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