Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Key Points
• The rates for home equity loans in Spokane are influenced by a variety of economic factors and each borrower’s financial profile.
• Your credit score, debt-to-income ratio, and home equity are key to securing the most favorable rates.
• Home equity loans tend to have fixed interest rates, which offer the comfort of predictable monthly payments.
• Keep your credit score at 700 or higher and your debt-to-income ratio under 36% for the best rates.
• The interest on home equity loans can be tax-deductible if used for home improvements.
For homeowners, home equity loans are a powerful financial resource, enabling you to tap into the equity you’ve built in your property. This guide is designed to give you a thorough understanding of home equity loan rates in Spokane, Washington. We’ll explore the various factors that influence these rates, the benefits and potential drawbacks of home equity loans, how to secure the most favorable rates, and the alternative borrowing options you might consider. Whether you’re dreaming of a home makeover, aiming to consolidate debt, or have your sights set on a significant purchase, this guide is your key to how to get equity out of your home.
A home equity loan is a second mortgage that uses your home as collateral, allowing you to borrow a large sum at a lower interest rate than you would typically see with an unsecured loan. You’ll receive the funds in a lump sum and immediately begin to repay the loan in fixed monthly installments over a predetermined term, typically ranging from five to 30 years. Because your home guarantees the loan, if you don’t repay what you owe, the lender could foreclose on your property.
To qualify for a home equity loan, you’ll generally need to have at least 20% equity in your home. Equity is the difference between the current market value of your home and your mortgage balance. Most lenders will let you borrow up to 85% of your home equity. A home equity loan calculator can help you determine how much you might be able to borrow.
Recommended: Different Types of Home Equity Loans
Home equity loan rates, like the rates on your original home loan, are determined by a variety of factors, including the state of the economy and the borrower’s financial situation. The Federal Reserve’s policies have a significant impact on the lending market, with the prime rate being the benchmark that lenders use. Any changes to the federal funds rate or the prime rate will have an effect on home equity loan rates. Additionally, a borrower’s credit score and debt-to-income (DTI) ratio will also influence the rates they are offered.
Interest rates aren’t just numbers on a page; they have a real impact on your budget. Even a seemingly small change in your interest percentage can add up to a significant amount of money over the life of your loan. Consider this: A $100,000 home equity loan with a 15-year repayment term at 8.50% interest would mean a monthly payment of $984 and a total interest of $77,253. Bump that rate up to 9.50%, and the payment jumps to $1,044, with a total interest of $87,961. The upshot? The borrower with the higher rate ends up shelling out $10,700 more in interest over the life of the loan. It’s clear that shopping around and exploring multiple lender offers to find the best home equity loan rate is a smart move.
Predicting the ebb and flow of interest rates is like trying to forecast the weather — there are many variables at play. But having a sense of the recent history of interest rates can give you perspective on the numbers you’re seeing in the current marketplace. As you can see, the prime rate dipped as low as 3.25% in 2020 and then rose to 8.50% by 2023. These fluctuations have a direct impact on home equity loan rates in Spokane and across the nation. Staying abreast of economic shifts and timing your loan application to sync with favorable conditions can be a strategic move if it’s feasible for you. But you can also focus on tidying up your credit score and other qualifying factors to present the best case possible to a potential lender.
| 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% |
You can’t control the prime rate, but you can beef up your personal financial stats to increase the likelihood that you’ll snag the most attractive home equity loan rates. Tick off these steps before filing your applications.
You need to have at least 20% equity in your home to be eligible for a home equity loan. Calculating your equity is simple math — just subtract your mortgage balance from your home’s current value. Let’s say your mortgage balance is $400,000 and your home is now valued at $550,000. That means you’ve got $150,000 in equity. To determine your percentage of equity, divide your equity number by the home value.
Lenders will use this figure to determine the maximum loan amount you can borrow, usually up to 85% of your equity. Having enough home equity is key to getting the best loan rates.
A robust credit score is your best ally when you’re looking for a loan. Lenders typically favor scores of 680 or higher, with the most competitive rates often reserved for those at 700 or beyond. A stellar credit score showcases your financial prudence and can translate to more favorable terms. To bolster your score, focus on punctual payments, keep credit card balances in check, and sidestep new debt. Regular credit report check-ups allow you to catch and contest any inaccuracies.
Your debt-to-income (DTI) ratio is an important piece of the puzzle when it comes to securing a home equity loan and favorable rates. Lenders generally look for a DTI ratio under 50%, with 36% or lower being the sweet spot. To get your DTI in the right range, consider paying down existing debts, increasing your income, or both. (To calculate your DTI, divide your total monthly debt payments by your gross monthly income.)
Property insurance is a common requirement for home equity loans. Lenders need to know that the property securing the loan is protected from potential harm. By ensuring you have the right insurance, you can get better rates and steer clear of extra costs or penalties. If you aren’t sure whether your coverage is adequate, ask a prospective lender what is required.
By plugging a few numbers into an online calculator, you can get a clear picture of what a home equity loan might look like for your finances. The same is true for the home equity loan’s cousin, the home equity line of credit. Check out these calculators if you’re thinking about borrowing.
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
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.
The closing costs for a home equity loan typically fall between 2% and 5% of the loan amount. These expenses cover items such as appraisals, credit reports, and loan origination fees. Some lenders offer a no-fee closing, but if you look closely, you may find the costs are rolled into your loan in another way. So it’s important to compare both interest rates and fees when you’re looking at offers.
The interest on a home equity loan could be tax-deductible if the funds are used to improve your home. As of 2025, those filing jointly can deduct interest on up to $750,000 of qualified home equity loans, and single filers can claim interest on up to $375,000 worth of loans. To take this deduction, you need to itemize when filing your taxes. Chat with a tax advisor about future tax years and to see how this could play out in your specific situation.
While home equity loans are a popular choice, there are other paths to consider. A home equity line of credit (HELOC) and a cash-out refinance are two options that also let you take advantage of your home equity. Compare them and their terms to see what aligns best with your financial goals.
A HELOC is like a credit card: You’re approved to borrow up to a certain amount, and you borrow as needed up to that amount. During the initial “draw” period on the HELOC, which can be up to 10 years, you only have to pay interest on the money you borrow. You can use a HELOC interest-only calculator to get a sense of what those payments might look like.
Once the draw period ends, you repay all that you have borrowed, plus interest, over a period of 5 to 20 years. At this point, you might be using a HELOC repayment calculator to help keep tabs on estimated payments.
HELOCs have variable interest rates, which means your payment can go up or down as the market changes. Lenders typically require a 680+ credit score (700 is ideal) and a DTI ratio of 50% or less (below 36% is ideal). A HELOC is a good option if you’re not sure how much you need to borrow or if you don’t need to borrow everything at once.
Here’s a quick look at a HELOC vs. a home equity loan:
| 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 plus interest; 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 |
A cash-out refinance is a mortgage refinance that lets you replace your current mortgage with a new, larger one. You then take the difference between the two as a lump-sum loan to use as you wish. Lenders typically allow you to borrow up to 80% of your equity. To qualify, you’ll generally need a minimum credit score of 620 and a DTI ratio of 43% or less. You can choose between fixed or variable rates for your new loan. When comparing a cash-out refinance vs. a home equity line of credit or HELOC, note that a refi you’ll only have one monthly payment to manage. A cash-out refinance may also be a bit easier to qualify for than a home equity loan.
When you’re ready to apply for a home equity loan or other lending option in Spokane, there are a few things you should know. For starters, the rate you’ll get on your loan can depend on a variety of factors, including your credit score, your DTI ratio, and your equity level. You can use online tools to help you estimate your monthly payments and compare offers from different lenders. Remember to get offers from multiple lenders and consider not only the interest rate but also the closing costs when you make your decision.
SoFi now offers home equity loans. Access up to 85%, or $350,000, 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.
You can use a home equity loan for just about anything. Large expenses, home renovations, and debt consolidation are just a few common uses. Home equity loans give you a lump sum of money with a fixed interest rate, so they’re a great option when you need funds for a big expense. Just be sure to use the money wisely and have a plan to make your monthly payments.
Crunching the numbers for a $50,000 home equity loan is a breeze with an online calculator. The monthly payment will depend on the loan term and interest rate. For instance, a 15-year fixed-rate loan at 7.50% would mean a monthly payment of approximately $464. Opting for a 30-year term at the same rate would lower the monthly payment to around $350. It’s important to note that the total interest paid over the life of the loan is usually higher with a longer term.
The nice thing about a home equity line of credit (HELOC) is its flexibility. During the draw period, which can last 5, 10, or even 20 years, you may only need to pay interest on the amount you’ve borrowed, so costs could be quite low. If you did use the entire credit line of $100,000, your interest rate for repayment would likely be a variable one. But at an average of 8.00% and a repayment term of 20 years, you would pay $836 per month.
There are a few things that might prevent you from getting a home equity loan. Lenders usually require a minimum credit score of 680 and a debt-to-income ratio of 50% or less. If you don’t have 20% equity in your home, that could be a barrier, too. Understanding these requirements can help you prepare and improve your chances of getting a good rate.
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Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
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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.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.
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