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Compare home equity loan rates in Ohio.
Key Points
• Home equity loans allow homeowners to borrow against the equity in their homes for various expenses.
• Home equity loan rates are influenced by the prime rate and current economic conditions.
• Ohio home equity loan rates have fluctuated over the years, primarily driven by changes in the prime rate.
• Factors influencing Ohio home equity loan rates include a borrower’s credit score, loan-to-value ratio, home value stability, lender policies, and property location.
• Home equity loans offer fixed interest rates, providing stability and predictability in monthly payments.
Introduction to Home Equity Loan Rates
A home equity loan allows you to get equity out of your home, and because it uses your home as collateral, it will likely offer a lower interest rate than an unsecured personal loan. In this guide, we’ll cover all you need to know about home equity loan rates in Ohio. We’ll examine how rates are set and provide the lowdown on how you can qualify for the best available rate on a home equity loan.
But first, let’s make sure we cover what is a home equity loan so you can understand how it’s different from other types of loans.
How Do Home Equity Loans Work?
A home equity loan is a loan that uses your home as collateral, which typically results in a lower interest rate than most personal loans. The interest rate is usually fixed, which means your payments will be consistent from month to month.
To qualify for a home equity loan, most lenders will require you to have at least 20% equity in your primary residence. Home equity loans can be used for a variety of expenses including home renovations, education, medical bills, and debt consolidation.
Where Do Home Equity Loan Interest Rates Originate?
Home equity loan interest rates, like home loan rates, are a product of various economic factors, including the prime rate. This rate is what banks charge their most creditworthy clients. Federal Reserve policy decisions on interest rates also play a part in influencing home equity loan rates. Understanding rate fluctuations can help you make informed decisions about home equity loans.
How Interest Rates Impact Home Equity Loan Affordability
Your interest rate is a key player in the affordability of your loan. Over a 20-year term, even a one-percentage-point difference in interest rates can mean a significant difference in interest paid. For example, on a $60,000 home equity loan with a 10-year term, a one-percentage-point difference in the interest rate (from 7.00% to 8.00%) equals an extra $31 per month and an additional $3,758 in interest paid over the life of the loan.
Home Equity Loan Rate Trends
Watching for changes in the prime rate can give you a sense of when the time might be right to apply for a home equity loan. The chart below shows the average prime rate in the U.S. in recent years, from a modest 3.25% in 2020 to a high of 8.50% in 2023. You can also see how the rate has shifted across more than 50 years in the graph below.
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 Ohio, a variety of factors come into play when determining your home equity loan interest rate. Your credit score, loan-to-value ratio, the stability and location of your home, and the policies of your lender are all in the mix. Let’s look at each of these in more detail:
Credit Score
If you have a strong credit score of 680 or higher, you’re in a position to get a good home equity loan rate. Still, lenders may look for a score of 700 or higher to give you the best rate. They may also offer better terms, like a lower origination fee or more flexibility with loan terms, to borrowers with the sparkling score.
Home Value
Lenders rely on independent appraisals to assess home values and set borrowing limits. This valuation process determines the maximum loan amount that a lender is willing to approve for your property. While you’re waiting for an appraisal, you can use online tools to estimate your home’s market value.
Loan-to-Value (LTV) Ratio
The LTV ratio is a key factor in determining your loan terms and interest rate. Most lenders cap the LTV at 85%. Your combined LTV ratio is calculated by adding the loan amount you’re seeking to any remaining balance on your first mortgage, then dividing by the appraised value of the home. For example, let’s say you currently owe $400,000 on your mortgage and you want to borrow $75,000 for a renovation project. Your home is appraised at $800,000:Home Value Stability
The stability of home values in your corner of Ohio is a big deal. Rising property values can make a lender comfortable giving you a larger loan. On the flip side, if area home values are dropping, lenders might be risk-averse, which could make it harder to qualify for a home equity loan or HELOC.
Property Location
If your property is in a high-risk area of Ohio — like a flood zone, or an area prone to tornadoes — your interest rate might be higher. That’s because lenders see these areas as riskier, and they might need to adjust their lending practices to account for potential losses.
Lender Policies
Lenders’ policies have a big impact on the interest rate you’ll pay for a home equity loan in Ohio. Get estimates from several lenders, so you can compare interest rates, fees, and closing costs.
How to Qualify for the Lowest Rates
To qualify for the best Ohio home equity loan rates, you should focus on a few key areas. Following the guidelines below can help you get the best terms for your needs.
Build a Strong Credit Score
You probably know that a higher credit score can land you better interest rates when you’re in the market for a home equity loan. This link between your credit score and the rates you’re offered highlights the importance of maintaining a solid credit history. In addition to paying your bills on time (of course), you’ll want to periodically check your credit report and correct any inaccuracies. And avoid using the maximum credit line on your existing credit accounts in the time leading up to your loan process.
Manage Debt-to-Income Ratio
Your debt-to-income (DTI) ratio is a critical number that lenders look at when you apply for a home equity loan. This figure, which compares your monthly income to your monthly debt obligations, is an indicator of your financial health. Most lenders in Ohio require a DTI ratio below 36%, though some may allow up to 50%. Keep in mind that your total debt, including credit card balances, student loans, and other monthly payments, will be factored in. Add up your monthly debts and divide by your gross monthly income to reveal your DTI ratio.
Obtain Adequate Property Insurance
Adequate property insurance is a prerequisite for Ohio home equity loans, particularly in areas with a history of flooding or other natural disasters. The goal is to protect both you and the lender from the financial fallout of property damage or loss.
Maintain Sufficient Home Equity
In Ohio, as elsewhere, homeowners looking to secure a home equity loan must maintain at least 20% equity in their home’s value. This equity is an important qualifier in determining your eligibility for the loan.
Fixed vs. Variable Interest Rates
Fixed interest rates are just that — fixed. They don’t change over the life of the loan, which means you’ll have predictable, consistent monthly payments. While that’s a benefit, it can mean slightly higher initial rates than variable interest loans, which start with lower rates that could increase over time. A home equity line of credit (HELOC) tends to have a variable interest rate. More on that below.
Tools & Calculators
Using online tools and calculators to run the numbers on different home equity loan scenarios can help you determine your potential eligibility for a home equity loan, understand the maximum loan amount you may be able to borrow, and get a sense of what monthly payments could be. Here are three of our favorites:
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
When it comes to closing costs, you’re typically looking at 2% to 5% of the loan amount. These costs can include an appraisal fee, credit report fee, document preparation, origination fee, notary fee, title search, and title insurance. It’s important to shop around and compare both fees and interest rates from multiple lenders when considering an Ohio home equity loan.
Tax Deductibility of Home Equity Loan Interest
Here’s the scoop on the tax benefits: If you’re using your home equity loan for significant home improvements, the interest is tax-deductible. Joint filers can deduct interest on the first $750,000 of a loan; for single filers the number is $375,000. To claim this benefit, you’ll need to itemize your deductions. It’s always a smart move to chat with a tax advisor to ensure you’re maximizing your benefits.
Alternatives to Home Equity Loans
In addition to a traditional home equity loan, you have different types of home equity loans or financing methods to consider. Each of these options has its own features and eligibility requirements.
Home Equity Line of Credit (HELOC)
We’ve mentioned HELOCs a few times so if you’re wondering what is a home equity line of credit, here are the basics: A HELOC is like a credit card in that it allows you to borrow up to a certain limit and only pay interest on the amount you actually use. However, it’s like a home equity loan because the collateral for the line of credit is your home.
Another factor in the HELOC vs home equity loan comparison: HELOCs have variable interest rates, which can mean increased costs if rates rise. When you’re looking for the best home equity loan or HELOC in Ohio, it’s important to consider the terms and conditions to make sure they fit your financial needs.
Home Equity Conversion Mortgage (HECM)
A HECM is a government-insured reverse mortgage, exclusively for those 62 and older, that allows you to receive payments from the lender based on your home’s value. You can opt for a lump sum, regular payments, or a line of credit.
The beauty of an HECM is that you don’t have to make payments until you leave your home, unlike traditional home mortgage loans and HELOCs. Just a heads up, though — HECMs usually come with higher closing costs and longer processing times. (While SoFi does not offer HECMs at this time, we do offer home equity loans and HELOCs.)
Cash-Out Refinance
With this special type of mortgage refinance, you’ll take out a new mortgage that’s more than your old one, paying off your first loan and pocketing the difference to use as you wish. As you think about a cash-out refinance vs a home equity line of credit or home equity loan, the big thing to consider is that the refinance gets you a new interest rate and term. So you’ll want to run the numbers to make sure your new interest rate isn’t wildly more costly over the long haul.
The Takeaway
Understanding the factors that influence home equity loan rates can help you make the most of your borrowing options as an Ohio homeowner. Comparing rates from different lenders and maintaining a strong financial profile can help you secure the best rates you can qualify for.
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.
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FAQ
What’s the monthly payment on a $50,000 home equity loan?
Borrowing $50,000 at a 7.50% interest rate with a 10-year term would equal a monthly payment of $594. But the exact monthly payment on a $50,000 home equity loan can vary depending on the interest rate and your repayment schedule. To get a better estimate of what your monthly payment could be, consider using a home equity loan calculator.
What is the monthly payment on a $100,000 HELOC?
The monthly payment on a home equity line of credit (HELOC) of $100,000, will depend on how much of the credit line you have used. But if you draw the full $100,000 and repay the amount with interest over 20 years, the monthly payment at 7.00% would be $775.
What is the payment on a $25,000 home equity loan?
When considering a $25,000 home equity loan, the interest rate and loan term are the two most significant factors that will affect your payment amount. To get a better idea of what your payment will be, it’s a good idea to use a loan calculator that takes into account these factors and gives you a more accurate payment amount.
What would the payment be on a $30,000 home equity loan?
The monthly payment on a $30,000 home equity loan will differ according to the interest rate and loan term. Here are examples based on a 20-year term: At 8.00% interest the monthly payment would be $251 and the total interest paid would be $30,224. At 7.00% interest the monthly payment would be $233 and the total interest paid would be $25,822. At 6.00% interest the monthly payment would be $215 and the total interest paid would be $21,583.
What might disqualify you from getting a home equity loan?
There are a number of things that can stop you from getting a home equity loan. If you have a bad credit history, lack adequate equity in your home, have a high debt-to-income ratio, or don’t have enough insurance on your property, you might not be able to get a home equity loan.
What are the benefits of a HELOC?
A home equity line of credit (HELOC) offers a number of distinct advantages, including flexible borrowing options, lower interest rates when compared to traditional credit cards, and the convenience of only paying interest on the amount of credit drawn. HELOCs provide homeowners with a versatile financial tool that can be tailored to their specific needs and circumstances.
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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*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