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Compare home equity loan rates in Nebraska.
Key Points
• Home equity loans allow homeowners to borrow against their home’s equity for large expenses like renovations, education, or debt consolidation.
• Home equity loan rates depend on factors like the borrower’s credit score, and the loan-to-value ratio.
• Banks’ prime rates and housing market trends also influence what rate a borrower is offered.
• Home equity loan calculators and other tools can be useful for those considering a loan.
• Alternatives to home equity loans include a home equity line of credit (HELOC), a home equity conversion mortgage (HECM), and a cash-out refinance.
Introduction to Home Equity Loan Rates
If you own a home in Nebraska and have been steadily making your mortgage payments, you may be interested in learning about home equity loan rates in the Cornhusker State. A home equity loan can help you tap into the equity you’ve built up in your property to achieve your goals, such as remodeling a kitchen or covering education expenses. In this guide, we’ll cover key factors that influence your rate, what to look for in a lender, and other ways to borrow.
How Do Home Equity Loans Work?
A home equity loan is a second mortgage that, like your original home loan, leverages your home as collateral. The loan amount is issued in a lump sum, and you repay it in equal monthly installments over a period of anywhere from five to 30 years. These loans often come with lower interest rates than unsecured personal loans, and the rate is typically fixed. To qualify, homeowners should have at least 20% equity in their primary residence. When considering home equity options, it’s crucial to weigh the benefits and risks of using your home as collateral.
Where Do Home Equity Loan Interest Rates Originate?
Now that you understand what a home equity loan is, it’s time to grasp where those all-important interest rates come from. Across the U.S., including in Nebraska, home equity loan interest rates are a product of economic factors, including the prime rate — the rate at which banks lend to their most creditworthy customers. Federal Reserve policy decisions also play a role as prime rates are set in response to rates set by the Fed. By understanding these factors, you can better anticipate rate fluctuations and make an informed decision when seeking a home equity loan.
How Interest Rates Impact Home Equity Loan Affordability
The interest rate you get on your home equity loan can have a big impact on how much you can borrow and the monthly payment. Over a 20-year term, a one-percentage-point difference in interest rate could mean a substantial difference in the amount of interest you’ll pay on the loan. This is why it’s important to shop around and compare home equity rates in Nebraska.
Let’s take a look at how that plays out if you borrow $50,000 with a 10-year term:
• At 8.00% interest the monthly payment would be $607 and the total interest paid would be $22,797.
• At 7.00% interest the monthly payment would be $581 and the total interest paid would be $19,665.
• At 6.00% interest the monthly payment would be $555 and the total interest paid would be $16,612.
Home Equity Loan Rate Trends
The prime interest rate’s ups and downs are one thing to watch if you’re trying to predict where home equity loan rates are headed. If you’re thinking about getting a home equity loan in Nebraska, it helps to have a sense of the history of the rate. Since 2018, the prime rate has seen its fair share of ups and downs, with a low of 3.25% in 2020 and a high of 8.50% in 2023.
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
A wide variety of factors can influence the rate you receive on a home equity loan — and whether you’re able to get equity out of your home at all. By understanding these factors, you will be well-equipped to find the best rate for the loan you are looking for.
Credit Score
If you’ve been diligent in managing your credit and have a history of on-time payments, you’re more likely to get a lower interest rate. Most lenders in Nebraska prefer a credit score of 680 or higher when considering a home equity loan application, and many would rather see a score of 700 or above.
Home Value
Lenders are very careful when it comes to loaning money on a home. They will only loan up to a certain percentage of the home’s value. So you can expect a lender to require an appraisal of your property during the loan application process.
Loan-to-Value (LTV) Ratio
Once you have your home value pinned down, the lender will be able to determine your LTV ratio, which is a big deal when it comes to home equity loans. Most lenders will let you borrow up to 85% of your home’s value, but the exact number can vary. The higher your LTV, the higher your interest rate is likely to be.
In the case of a home equity loan, the combined amount of your remaining first mortgage and your new home equity loan will need to be under 85%. You can calculate your combined loan-to-value ratio (CLTV) easily:
(Current mortgage balance + proposed home equity loan amount) ÷ Home appraised value = CLTV
Here’s an example of how that looks for a home that appraised for $300,000. Let’s say the owner owes $100,000 on the existing mortgage and wants to borrow $50,000 with a home equity loan:
$100,000 + 50,000 = $150,000
$150,000 ÷ $300,000 = .50
With a CTLV of 50%, this owner is in a good position to obtain the desired $50,000 loan.
Home Value Stability
The stability of home values is also important. If your home’s value is on the rise, lenders are more likely to approve larger loan amounts, since the property’s increased value provides a stronger financial cushion. On the flip side, if home values in your area are declining, lenders may be more conservative in approving loans.
Property Location
Where your property is located can also affect your interest rate. If you live in an area that’s considered at risk from extreme weather and natural disasters, such as wildfires, you may find that the interest rate you’re offered is higher.
Lender Policies
Lender policies have a big impact on the interest rates offered for home equity loans in Nebraska. And because different lenders have different policies, it’s important to shop around and examine the fine print at various lenders.
How to Qualify for the Lowest Rates
If it’s starting to feel like what interest rate you’ll be offered is largely out of your hands, take heart: There is actually a lot you can do to help ensure you’re offered the best home equity loan rates. Let’s have a look at these smart money moves:
Build a Strong Credit Score
A robust credit score is your ticket to favorable rates on home equity loans, a testament to your financial trustworthiness. Keep the score high by being prompt with payments and not maxing out your credit. These habits don’t just open doors to home equity loans; they also contribute to your overall financial health.
Manage Debt-to-Income Ratio
Lenders look at your debt-to-income (DTI) ratio to see how much of your monthly income goes toward paying debts. The lower your DTI, the better your chances of getting approved for a loan. To qualify for the best home equity loans in Nebraska, you’ll typically need a DTI on the lower end of the spectrum: 36% or less. But some lenders may accept a DTI as high as 50%.
Obtain Adequate Property Insurance
It’s not unusual for home loans of any kind to require adequate property insurance, especially in flood-prone areas. By making sure your property is properly insured, you can potentially get better loan terms, which can improve your overall financial situation and give you peace of mind.
Maintain Sufficient Home Equity
If you’re in Nebraska, it’s a good idea to have at least 20% equity in your home before applying for a home equity loan. Keeping an eye on your home’s current value and assessing your equity position can help you get the best interest rates for your loan.
Fixed vs. Variable Interest Rates
In Nebraska, as elsewhere in the U.S., home equity loans typically come with fixed interest rates. This means you can plan on making the same monthly payment for the entire life of the loan. While fixed rates provide peace of mind, they can sometimes start out higher than variable rates, which may begin lower but increase over time.
Tools & Calculators
To figure out if a Nebraska home equity loan is within reach and to pinpoint your potential borrowing power, you’ll want to use a calculator. There are calculators for HELOCs, too.
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 home equity loans typically fall between 2-5% of the loan amount. These costs often include fees for an appraisal, credit report, document preparation, and title insurance. Appraisals can run $300-$500, and credit report fees $50-$100. Document preparation and attorney fees can vary widely, from $500-$2,000. Remember, no-closing-cost loans may seem appealing, but they often come with higher interest rates. It’s always wise to compare multiple lenders before making a decision.
Tax Deductibility of Home Equity Loan Interest
The interest on your home equity loan could be tax-deductible if you’re using it to significantly improve your home. There are limits, though. You can deduct the interest you paid on the first $750,000 of your mortgage ($375,000 for couples filing separately). Just remember, you’ll need to itemize your deductions to snag this benefit. And it’s always a good idea to chat with a tax advisor about this or any deduction.
Alternatives to Home Equity Loans
In Nebraska, you have a range of options beyond the traditional home equity loan. A home equity line of credit (HELOC) is just one example of the different types of home equity loans you’ll want to explore. Check out these options to find the best fit for your financial needs:
Home Equity Line of Credit (HELOC)
A HELOC is a nifty financial tool that works much like a credit card, but with the bonus of lower interest rates than you’ll see on a credit card or personal loan. If you’re approved for a HELOC (through a process much like the one used for a home equity loan), you can borrow up to a predetermined limit and only pay interest on the amount of the credit line you use. When thinking about HELOCs vs home equity loans, consider that the interest rate on a HELOC is often variable, while a home equity loan typically has a fixed rate.
Home Equity Conversion Mortgage (HECM)
An HECM, or Home Equity Conversion Mortgage, is a government-supported reverse mortgage that empowers homeowners aged 62 and older to receive payments from the lender based on their home’s value. The funds from an HECM can be received as a lump sum, regular payments, or a line of credit. Unlike home equity loans and HELOCs, HECMs don’t require monthly payments; repayment is only necessary when you leave or sell the home.
While HECMs generally have higher closing costs and a lengthier processing time than home equity loans and HELOCs, they offer unique benefits. (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 form of mortgage refinance. You get a new mortgage for more than you owe on your existing mortgage. You pay off your original mortgage and take extra funds you’re borrowing in cash. One big difference between a home equity loan and a cash-out refi is that the home equity loan leaves you with two mortgage payments to make. The cash-out strategy leaves you with one payment. When weighing a cash-out refinance vs. a home equity line of credit, consider that the HELOC allows you to borrow only what you need when you need it, whereas the cash-out refi, like a home equity loan, provides you with a lump sum.
The Takeaway
Nebraska homeowners who wish to take advantage of their home equity have several options: a home equity loan and a HELOC being two popular choices. To make the best financial decision, keep tabs on local home equity loan rates, take good care of your credit score, and do your research to compare the full cost profile (both interest charges and fees) from multiple lenders. It takes some time to do your homework, but it will ensure that you make the smartest financial move.
SoFi now offers home equity loans. Access up to 85%, or $750,000, 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.
FAQ
What would the monthly payments be on a $50,000 home equity loan?
The monthly payment on a $50,000 home equity loan will depend on your interest rate and term. The longer the term, the lower the monthly payment will typically be — but the more interest you will pay over the life of the loan. A lower interest rate, of course, means lower payments and interest overall. You can play with different rates in a home equity loan calculator to get a feel for how rates and terms impact the numbers.
What is the monthly payment for a $100,000 HELOC?
The monthly payment on a $100,000 home equity line of credit (HELOC) will depend on whether you have used the full $100,000 credit line. If so, then your payment amount will depend on your term and interest rate. For example, a $100,000 HELOC with a 6.00% interest rate and a 10-year term will mean a monthly payment of $1,110.
What’s the monthly 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 shift.
How much would the payment be on a $30,000 home equity loan?
The monthly payment on a $30,000 home equity loan can vary depending on the interest rate and the length of the term you choose. To get an accurate idea of what your monthly payments could be, use a home equity loan calculator that allows you to type in rates and terms.
What could disqualify you from getting a home equity loan?
Factors that can disqualify you from getting a home equity loan include having a credit score below 680 and having a lot of debt payments to make each month relative to your income. Of course, not having much home equity or having inadequate insurance coverage on your home could be a factor as well.
What are the benefits of a HELOC?
A home equity line of credit (HELOC) gives you a line of credit that you can use as needed. Some borrowers prefer this over taking out a lump-sum loan — it’s particularly useful when you aren’t sure exactly how much money you need, such as when you’re doing a remodeling project. With lower interest rates than most credit cards and the ability to only pay interest on the amount of credit you use, a HELOC can be a great way to have financial flexibility.
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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.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