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Compare home equity loan rates in Nevada.
Key Points
• Home equity loans offer a lump-sum payment repaid with regular installments and usually have a fixed interest rate with a repayment term of five to 30 years.
• Home equity loan rates vary based on lender policies and economic factors.
• Factors influencing the rates that individuals will be offered include appraised home value, home value stability, and property location.
• Qualifying for the lowest rates entails building a strong credit score, managing debt-to-income ratio, obtaining adequate property insurance, and preserving sufficient home equity.
• Alternatives to a home equity loan include a home equity line of credit (HELOC), home equity conversion mortgage (HECM), and cash-out refinance, each with its own features, eligibility requirements, and interest rates.
Introduction to Home Equity Loan Rates
If you’ve been diligently paying off a home loan in Nevada and you’ve built up some equity in your home, you can use that to obtain cash for other projects. But first you’ll want to study the landscape of home equity loan rates in Nevada, and learn what factors can impact your rate and how to find the best rate for you. Step one? Get the lowdown on what is a home equity loan.
How Do Home Equity Loans Work?
Home equity loans are essentially second mortgages (assuming you’re still paying off your first mortgage), with your home serving as the collateral. They typically offer lower, fixed interest rates compared to unsecured loans. To qualify, you’ll want to have at least 20% equity in your primary residence. The funds from a home equity loan can be used for a variety of purposes, from home improvements to education, medical expenses, and even debt consolidation.
Note that a home equity loan and a home equity line of credit (HELOC) are not the same thing. We’ll give you the lowdown on what is a home equity line of credit below.
Where Do Home Equity Loan Interst Rates in Nevada Originate?
Home equity loan interest rates are a product of various economic factors, with the prime rate being a significant player. This rate, which is influenced by the government’s Federal Reserve policy, is what banks charge their most creditworthy clients. But your personal economic factors also have a sizable influence on what rate you might be offered by a lender in Nevada.
How Interest Rates Impact Home Equity Loan Affordability
There’s a reason we’re making a big deal about interest rates. The rate you lock in for your home equity loan can make a world of difference in managing your loan payments and in how much you’ll spend on interest over the life of the loan. In the table below, you’ll see how the interest rate you obtain when borrowing $50,000 with a home equity loan affects the monthly payment and total interest paid over a 10-year term:
| Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|
| 8.50% | $620 | $24,391 |
| 8.00% | $607 | $22,797 |
| 7.50% | $594 | $21,221 |
Home Equity Loan Rate Trends
It’s a good idea to be aware of how the prime rate changes over time in Nevada. Keeping an eye on these shifts can help you determine when the time is right to apply for a home equity loan.
Historical Prime Interest Rates
Since 2018, the prime rate has hit a low of 3.25% in 2020 and a peak of 8.50% in 2023. You can see the details of the fluctuations below. Also take a look at how the rate has changed over many decades.
| 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
As noted above, the prime rate is not the only factor that lenders weigh when evaluating an application for a home equity loan. There are personal factors, such as your credit score, that play a part in determining your rate as well. Lenders look at these factors closely when considering the interest rate for a home equity loan or a HELOC.
Credit Score
Your track record of financial management, as reflected in your credit score, is a big deal. If you’ve been diligent with on-time payments, you’re in a good place. Lenders usually look for a credit score of 680 or higher for home equity loans, but many will be more inclined if your score is 700 or above.
Home Value
To determine the value of your home, lenders require an appraisal. You might need to open your home to an appraiser, but in many cases, lenders use an automated valuation model, which uses recent home sales data, tax assessments, and other metrics to determine a home’s value. This property valuation will be important in determining how much you can borrow with your home as collateral.
Loan-to-Value (LTV) Ratio
Once your home’s appraised value is established, it’s used to determine your loan-to-value (LTV) ratio. Most home equity loan lenders require your combined loan-to-value ratio (CLTV) to be 85% — that’s the combination of your first mortgage balance plus the amount you want to borrow, divided by the appraised value of your home. Let’s say you currently owe $600,000 on your mortgage and you want to borrow $60,000 for a renovation project. Your home is appraised at $800,000. Here’s the math:
$600,000 + $60,000 = $660,000
$660,000 / $800,000 = .825
.825 x 100 = 82.5% CLTV
At 82.5% CLTV there is a reasonable chance a lender will approve a home equity loan but it’s not a slam dunk. It will be dependent on the lender’s policies, and your other financial metrics will need to be favorable.
A home equity loan calculator can help you figure out how much you can borrow, based on your home’s value and your existing mortgage balance.
Home Value Stability
The stability of home values can influence a lender’s decision as well. When home values are on the upswing, lenders may be more inclined to approve larger loan amounts. But the converse is also true. So fluctuations in the home market in Nevada — or just in your little corner of the state — can directly affect the terms and availability of loans.
Property Location
Living in areas with a higher risk of natural disasters can lead to higher interest rates because lenders see these areas as riskier to lend to. Floods and fire are two chief concerns in Nevada.
Lender Policies
When it comes to securing a Nevada home equity loan, the influence of individual lenders’ policies on the interest rates offered cannot be overstated. To ensure you get the best deal, it’s essential to shop around.
How to Qualify for the Lowest Rates
To qualify for the best Nevada home equity loan rates there are several steps you can take.
Build a Strong Credit Score
As noted above, you’ll want a credit score of at least 680 when on the hunt for a home equity loan in Nevada. Check your score periodically and correct any errors in your credit report. Try to avoid maxing out all lines of credit. And above all, pay your bills on time.
Manage Debt-to-Income Ratio
Speaking of credit, when you’re applying for a home equity loan, debt-to-income (DTI) ratio is a key factor. It’s a financial snapshot of your monthly debts divided by your gross monthly income. Most lenders in Nevada, and across the U.S., will look for a DTI ratio between 36% and 50% for home equity loans. To put your best foot forward, ensure your income is comfortably covering your monthly financial commitments before you submit a loan application.
Obtain Adequate Property Insurance
It’s a smart move to ensure you have the right amount of property insurance, especially in Nevada areas prone to flooding or wildfires, and lenders will be looking at this when you apply.
Maintain Sufficient Home Equity
Make sure you have at least 20% equity in your home before starting the home equity loan application process. Remember that if you bought the home a while ago, and it has appreciated rapidly, you should check your equity using the current estimated value of your home, not what you paid for it when you bought it.
Fixed vs. Variable Interest Rates
Home equity loans typically come with a fixed interest rate, which means you’ll have the comfort of knowing your monthly payments won’t change over the life of the loan. However, fixed interest rates can sometimes start out higher than variable interest rates. Variable interest rates can start out lower, but may increase over time.
Tools & Calculators
Taking advantage of online tools and calculators can help you estimate what amount of loan you might qualify for, learn what your home equity loan payments might be, and more. Here are three useful options:
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
The closing costs for home equity loans generally range from 2% to 5% of the loan amount. These may include fees for the appraisal, credit reports, and title search. But each lender has a different fee schedule so it’s important to read the fine print and compare all the numbers involved in a home equity loan, not just the interest payments.
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. Couples filing itemized joint tax returns can deduct interest paid on up to $750,000 of qualified home equity loans obtained after December 15, 2017, while single filers are permitted to deduct interest paid on loans of up to $375,000. Touch base with a tax advisor to ensure you’re making the most of your tax benefits.
Alternatives to Home Equity Loans
As you think about how to get equity out of your home, it’s worth considering that alongside traditional home equity loans, there are several other financing options available, each with its own distinct features.
Home Equity Line of Credit (HELOC)
A quick rundown on HELOCs vs. home equity loans: Both use your home as collateral, and so lenders use your home appraisal, credit score, and other metrics to qualify you for either one. But while a home equity loan delivers you a lump-sum loan and you begin paying that off immediately, a HELOC gives you a line of credit that you can use (or not) when you wish during the “draw” period. So you only borrow — and pay interest on — what you need when you need it. HELOCs more often have variable interest rates, which is an important consideration, because even if the HELOC starts out at a comfortably low rate, it could trend upward from there.
Home Equity Conversion Mortgage (HECM)
A HECM is a different type of home equity loan. This is a government-backed reverse mortgage designed for those 62 and older. It allows you to receive payments from the lender based on your home’s value. You have the flexibility to choose how you receive these payments: as a lump sum, regular payments, or a line of credit. The beauty of an HECM is that you’re not required to make payments until you leave your home, unlike home equity loans in Nevada and HELOCs. (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 type of mortgage refinance. In a cash-out refi, you take out a new mortgage to replace your existing one and add the amount you wish to borrow to the new mortgage. When the refi goes through, you pay off your initial mortgage and then use the extra cash however you wish. As you are weighing a cash-out refinance vs. a home equity line of credit or home equity loan, one important consideration will be the interest rate on your current mortgage. If it’s significantly lower than the prevailing interest rates in Nevada, you might want to think twice about refinancing.
The Takeaway
Knowing the ins and outs of Nevada home equity loan rates and the many factors that can affect them is crucial to making smart financial decisions. By comparing lenders, working to improve your credit score, and considering other financing options, you can find the best home equity loan rates for your situation and set yourself up for financial success.
Unlock your home’s value with a home equity loan from SoFi.
FAQ
What would my monthly payment be on a $50,000 loan?
A $50,000 loan with an 8.00% interest rate and a 10-year term would mean a monthly payment of $607. But keep in mind that your monthly payment will be influenced by the prevailing home equity rates in Nevada and the term of your loan.
What is the monthly payment on a $100,000 HELOC?
The monthly payment on a $100,000 home equity line of credit (HELOC) can fluctuate based on the current interest rate and the amount of your credit line you’ve used. For a more accurate estimate, use a HELOC monthly payment calculator.
What is the payment on a $25,000 home equity loan?
The monthly payment on a $25,000 home equity loan with a 10-year term could range from $265 (at a 5.00% rate) to $303 (at 8.00%). Changing the loan term would alter these numbers.
What would the payment be on a $30,000 home equity loan?
When you’re contemplating a $30,000 home equity loan, the interest rate and loan term are crucial to calculating your monthly payments. A $30,000 home equity loan with a 20-year term at a rate of 7.50% would cost you $242 per month, but changing the interest rate or term will also change the payment number.
What could disqualify you from getting a home equity loan?
Some of the major factors that could stand in your way of being approved for a home equity loan include a less-than-stellar credit history, having little equity in your home, or having a high debt-to-income ratio. It’s wise to address any of these issues before you apply for a loan.
What are the benefits of a HELOC?
A home equity line of credit, or HELOC, offers a number of benefits. It typically offers a lower interest rate than an unsecured personal loan, and you only pay interest on the amount of the credit line you’ve used. These features make HELOCs a popular choice for homeowners looking for a cost-effective and flexible way to borrow.
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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