Current Home Equity Loan Rates in New York City, NY Today
ALBANY HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in Albany, NY.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Compare home equity loan rates in Albany.
Key Points
• Home equity loan rates in New York City are determined by your credit score, your debt-to-income ratio, and other factors.
• To secure the best rates, aim for a credit score of 700 and a debt-to-income (DTI) ratio under 36%.
• The rates you may be offered by lenders are impacted by the prime rate, Federal Reserve policy, and your personal financial profile.
• Even a small difference in home equity loan rates can add up to substantial savings over the life of your loan.
• The interest you’ll pay on a home equity loan could be tax-deductible if you use the money for home improvements.
• Other options, like HELOCs and cash-out refinances, come with their own set of perks and pitfalls.
Introduction to Home Equity Loan Rates
What is a home equity loan? What’s most important to know is that it’s a great way for you, as a homeowner, to access the value you’ve built in your home. It’s an option many people who’ve built equity in their properties use to relieve pressure when they need cash.
In this article, we’ll cover everything you need to know about home equity loans. We’ll discuss factors affecting loan rates and give you tips that will help you get the best rate possible. We’ll also explain the different types of home equity loans, including home equity lines of credit (HELOCs) and cash-out refinances, along with the pros and cons of each.
Whether you’re planning a home renovation, working to consolidate high-interest debt, or making a major purchase, getting an understanding of home equity loan rates in New York City can help you make smart financial decisions and set you up for a bright economic future.
How Do Home Equity Loans Work?
A home equity loan is a second mortgage. You receive a lump sum of cash, which you then repay, usually in fixed monthly installments, over five to 30 years. The loan is secured by your home, and that can give you access to lower interest rates than you would get with an unsecured personal loan.
One important thing you’ll want to keep in mind: In order to draw on the equity in your home, you have to actually have built equity in your home. You can still be working to pay off your mortgage, but the amount you owe shouldn’t be greater than the house’s worth. Typically, lenders will want you to have 20% equity at the minimum in your home to qualify.
HELOCs vs. Home Equity Loans
Looking at a HELOC vs a home equity loan is where many homeowners begin their comparisons to find the right financing tool for their situation. Here’s how the two loan types compare if you use them to pull equity out of your home.
| 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 |
If you have been diligently paying off your mortgage and are wondering how to get equity out of your home, a home equity loan may be the right option for you.
Where Do Home Equity Loan Interest Rates Originate?
The rates you might be offered when shopping for a home equity loan are the product of many influences, from the broad economic landscape to your own financial standing.
Federal Reserve policy — including changes to the federal funds rate — can send ripples through the lending market, causing changes that impact the prime rate. When the prime rate moves up or down, so do home equity loan rates.
Keep an eye on these factors. You’ll be better prepared to anticipate rate shifts and make confident decisions about when you should pursue a home equity loan.
On a personal level, your credit score and DTI ratio are also key drivers in the rates you’ll be quoted as a potential borrower. You have more control over these things, so try to prepare for applying for a home equity loan by working to improve them.
How Interest Rates Impact Affordability
The interest rate on your home equity loan can make a world of difference in how affordable it is over time, as you pay it down. You should know that even a seemingly small difference in the rate can lead to significant savings or extra costs.
To demonstrate just how much your interest rate can impact your loan costs, the chart below shows monthly payment amounts and the total interest you’d pay for a $75,000 home equity loan with a 20-year repayment term. We’ve calculated both the monthly payment and the total interest you’ll pay at several rates.
If you have an 8.00% interest rate, your monthly payment is approximately $627 and the total interest over the loan’s term adds up to $75,559. If the interest rate is one percentage point lower, at 7.00%, your monthly payment would be about $581 and your total interest $64,554. That means the lower rate could save you $11,005 in interest.
| Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|
| 8.00% | $627 | $75,559 |
| 7.50% | $604 | $70,007 |
| 7.00% | $581 | $64,554 |
Fixed vs Adjustable Interest Rates
Home equity loans tend to come with fixed interest rates. But some New York City lenders may offer adjustable rates, and different home equity loans like home equity lines of credit (HELOCs) and cash-out refinances also offer adjustable rates. That’s why it’s a good idea to consider which you might prefer.
A fixed rate never changes through the loan’s life. That gives you the assurance of consistent monthly payments over the duration of the loan. Such predictability is a great tool for your budgeting and financial planning.
Adjustable rates tend to start off slightly lower than fixed rates, but after an initial period, they change in accordance with market rates. That can lead to higher payments and create some uncertainty about what to expect over the term of the loan.
When you’re thinking about home equity loan rates, it’s smart to consider the merits of fixed versus adjustable rates, taking into account your financial standing and comfort with risk.
Home Equity Loan Rate Trends
Predicting interest rate movements is something like a day at the races – it’s all but impossible to know what will happen with certainty. But by looking at the trends in recent history, you can get a better sense of what sort of movement might be coming.
Let’s take a look at the prime rate, a pivotal driver in the home equity loan rate game. Its recent timeline shows just how volatile it is. As you can see in the chart below, it dropped to 3.25% in 2020, then steadily rose to 8.50% in 2023.
Historical Prime Interest Rates
Since 2018, the prime rate has seen its share of ups and downs, ranging from a low of 3.25% in 2020 to a high of 8.50% in 2023. Take a look at the history of the prime rate to get a sense of how high or low it may go this year.
Source: TradingView.com
Historical Prime Interest Rates
Since 2018, the prime rate has seen its share of ups and downs, ranging from a low of 3.25% in 2020 to a high of 8.50% in 2023. Take a look at the history of the prime rate to get a sense of how high or low it may go this year.
| 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
As we have mentioned, these kinds of fluctuations impact the rates you might encounter in New York City. But despite some unpredictability, staying in the know about financial trends and working on your financial standing can help you time your application to sync with favorable economic conditions. With some luck, this can help you score competitive rates.
How to Qualify for the Lowest Rates
To secure the most competitive home equity loan rates in New York City, you’ll want to keep in mind a few factors when shopping for a HELOC vs. a home equity loan. Take the following steps before beginning the application process, and you’ll be positioned to land an interest rate and term that are not just favorable, but smart and manageable.
Accrue Home Equity
To qualify for a home equity loan, you need at least 20% equity in your home. To figure out your equity, subtract the outstanding balance on your mortgage from the estimated value of your home. Divide the answer you get by your home’s estimated value to arrive at a percentage of equity. The higher that percentage is, the better off you are.
Build a Strong Credit Score
To land the best available home equity loan rate, you also need a robust credit score. Lenders often look for a score of 680 or higher, and many require a score above 700. A higher credit score is viewed by lenders as a sign of financial savvy. It can open the door to favorable loan terms. If you focus on making timely payments, reducing credit card balances, and steering clear of new debt, you may succeed in boosting your credit score and your chances of qualifying for a home equity loan with a lower interest rate.
Manage Debt-to-Income Ratio
Your DTI ratio is an important factor when it comes to qualifying for a home equity loan and getting a good rate. Lenders typically want to see a DTI ratio of 50% or less. If yours is 36% or lower, you may qualify for the lowest interest rates. How can you manage your DTI effectively in New York City? Try to pay down your existing debt, increase your income, or achieve some combination of the two.
Obtain Adequate Property Insurance
Property insurance is a must-have if you want to qualify for a home equity loan. Insurance is a safety net for both you and the lender should damage occur, so make sure your coverage is comprehensive.
Tools & Calculators
Online tools and calculators can ease your quest for the best home equity loan rates by making calculations and budgeting simple. You can choose among multiple tools.
Here’s one to explore: A home equity loan calculator shows you how big a loan you might qualify for. It’s a nifty tool that can give you a clear picture of what to expect and make sure you won’t overextend yourself financially.
Run the numbers on your home equity loan.
-
Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
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 the cost of closing on a home equity loan, expect to pay 2% to 5% of the loan amount. Keep in mind that everything seems to cost more in New York City. The table below shows some typical prices on the menu of costs.
| Service | Typical Fees |
|---|---|
| Appraisal | $300-$500 |
| Credit report | $30-$50 or more |
| Document prep | $100-$500 |
| Loan origination | 0.5%-1.0% of the loan amount |
| Notary | $20-$100 |
| Title insurance | 0.5%-1.0% of the loan amount |
| Title search | $75-$250 or more |
Tax Deductibility of Home Equity Loan Interest
The interest you pay on your home equity loan may be tax-deductible if you use the funds to improve your home. For single filers, interest on the first $375,000 of loan debt is deductible. Married couples who file jointly can deduct interest on up to $750,000 of debt. Just remember, you’ll need to itemize if you want to take advantage of this option. A tax advisor can help you figure out what will make the most sense for your situation.
Alternatives to Home Equity Loans
A home equity loan isn’t the only way to leverage your property’s value. You might also want to consider a cash-out refinance or a home equity line of credit (HELOC). A cash-out refinance involves taking out a new mortgage for a larger sum than your existing home loan. You receive the difference as a lump sum. With a HELOC, on the other hand, you apply for a credit limit, secured by your home, that you can borrow against as needed. You’ll pay interest only on the cash you draw out.
Learn more about cash-out refinance vs. home equity line of credit similarities and differences, and you can understand the options and make the best choice.
Home Equity Line of Credit (HELOC)
What is a home equity line of credit? A HELOC is a lot like a credit card, offering homeowners the freedom to borrow up to a set limit and pay interest solely on what they use. Usually, you can pull out funds during an initial “draw” period, followed by a repayment period in which you must repay the principal and remaining interest. Rates on HELOCs are generally adjustable. Unlike a home equity loan, a HELOC is about flexibility. Then again, adjustable interest rates mean your rate and your payments can fluctuate, potentially impacting your costs down the line.
Qualifying for a HELOC often requires a credit score of 680 or higher (700 is better) and a DTI ratio that’s ideally below 36% (but at the most 50%). HELOCs may allow you to borrow up to 90% of the equity you have in your home. To see how the loan would look as you pay it down, load some hypothetical numbers into a HELOC repayment calculator.
Just want to know how much the monthly payments would be on your hypothetical HELOC? Run some figures on a HELOC monthly payment calculator. You can play around with different interest rates and terms to find out how they might affect your payments, and how much of a loan you can afford. And if you’d like to calculate how much interest you’d have to pay during the “draw” period of a HELOC, try out a HELOC interest-only calculator.
Cash-Out Refinance
A cash-out refinance is a strategic mortgage refinance. You swap your original mortgage for one that’s larger than what you currently owe — then receive the difference in a lump sum. Rates on cash-out refis may be fixed or adjustable. It’s usually easier to qualify for a cash-out refi than it is for a home equity loan or a HELOC. Lenders have different standards, but often, cash-out refis require a 620 minimum credit score and a DTI ratio of 43% or less.
Recommended: HELOC Repayment Calculator
The Takeaway
If you’re thinking about applying for a home equity loan in New York City, it’s smart to build an understanding of key factors that tend to drive interest rates. Your credit score, DTI ratio, and equity level all play a role in the kind of rate you’ll qualify for. Simply shopping around can also go a long way toward getting yourself the best available rate. And if a home equity loan isn’t a fit, remember that HELOCs and cash-out refinances have their own benefits.
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 are the common uses of a home equity loan?
Funding home improvements and consolidating high-interest debt are two popular reasons why people tend to apply for home equity loans. If you decide to pursue a home equity loan, remember to use funds wisely and make sure the loan fits into your long-term financial plan.
What would monthly payments look like on a $50,000 loan?
Your monthly payment after you take out a $50,000 home equity loan can vary depending on the interest rate and the loan term. For example, if you pull out equity at a 7.00% interest rate over a 15-year term, the monthly payment would be about $449. At a 9.00% interest rate over 15 years, the payment would be around $507. A loan calculator can help you figure out what your monthly payments would be with an array of variables.
What might prevent you from qualifying for a home equity loan?
A number of factors might get in the way of your securing a home equity loan. First, lenders typically require a minimum credit score, generally around 680 or more, and having a lower one could disqualify you. A high debt-to-income (DTI) ratio — usually above 50% — might also impede your loan eligibility. And having less than 20% equity in your home could be a red flag for lenders, too. Potential lenders will also look at how stable your home’s value is and how comprehensive a property insurance policy you carry. Qualifications vary lender-by-lender, but these are common disqualifiers.
What are a home equity loan’s biggest benefits?
Home equity loans often carry fixed interest rates. They therefore have predictable monthly payments, and that can make budgeting easier and rule out surprises. They usually have lower rates than unsecured personal loans, and that makes them a cost-effective option for significant one-time expenses, such as home improvements or debt consolidation. Be sure to balance benefits with potential risks, including the threat of foreclosure on your home if you fall behind on payments.
SoFi Mortgages
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SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*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.
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 .
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.
SOHL-Q225-294
More home equity resources.
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What is a Home Equity Line of Credit
-
Different Types of Home Equity Loans
-
HELOC vs Home Equity Loan: How They Compare
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Current Home Equity Loan Rates in Houston, TX Today
HOUSTON HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in Houston, TX.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Compare home equity loan rates in Houston.
Key Points
• Home equity loan rates are influenced by Federal Reserve policy, borrower creditworthiness, and market competition.
• It’s a good idea to keep at least 20% equity in your home whenever possible.
• A credit score of 700+ and a debt-to-income ratio below 36% are your ticket to the best rates out there.
• Property insurance is a must, particularly if your home is in a flood zone.
• Online tools and calculators can help you estimate monthly payments and your borrowing capacity.
• The interest on a home equity loan may be tax-deductible.
Introduction to Home Equity Loan Rates
What is a home equity loan? First and most important, it’s a great way for homeowners to access the value they have built in their homes. It’s also an option many use to relieve the pressure when they need cash.
In this article we’ll cover everything you need to know about home equity loans. We will discuss the factors that affect loan rates and provide tips for getting the very best rate possible. We’ll even explain the different types of home equity loans, including home equity lines of credit (HELOCs) and cash-out refinances, so you’ll be aware of the alternatives available, along with their pros and cons.
Whether you’re planning a home renovation, working to consolidate high-interest debt, or making a major purchase, understanding Houston home equity loan rates can help you make smart financial decisions and get you set up for a successful economic future.
How Do Home Equity Loans Function?
A home equity loan is a type of second mortgage. It allows you to tap into your home’s equity to receive a lump sum of cash, which you then repay, usually in fixed monthly installments over a period of five to 30 years. The loan is secured by your home, and that can mean you’ll have access to lower interest rates than you’d get with unsecured personal loans.
One important thing to keep in mind: In order to draw on the equity in your home, you have to actually have equity in your home. You can still be paying off your mortgage, but the money you currently owe should not be more than the house is worth. Typically, lenders will want you to have a minimum of 20% equity in your home to qualify.
HELOCs vs. Home Equity Loans
Here’s how the two types of financing compare if you use them to take equity from your home.
| 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 |
If you’ve been paying your mortgage diligently and now you are wondering just how to get equity out of your home, a home equity loan may be a particularly good option for you.
The Origin of Home Equity Loan Interest Rates
Multiple factors determine what the home equity loan rates in and near Houston look like, including both big-picture economic conditions and your individual financial profile.
Federal Reserve policies affect lenders’ base rates and thus the rates they charge borrowers. Increases in the federal funds rate and the prime rate, for instance, lead to rises in home equity loan rates. Understanding these influences can enable borrowers to anticipate rate fluctuations and make informed decisions about all kinds of home loans, including home equity loans.
Your credit score and debt-to-income ratio also influence what rate you are offered by lenders. Additionally, the amount of your loan and the length of your repayment term will have an impact on your rate. Generally, larger loans and longer terms will have higher rates — this is due to the increased risk for lenders.
How Do Interest Rates Impact Home Equity Loan Affordability?
As you see, it pays to look for the best available interest rates, whether you’re shopping for a home equity loan or a HELOC. Your interest rate is a major factor when it comes to how affordable your home equity loan will be. As of late June 2025, the average home equity loan interest rate was 8.26%.
The chart below shows a $75,000 home equity loan with a 20-year repayment term, with payments and interest paid calculated at several different interest rates. If you have an 8.00% interest rate, your monthly payment would be $627, and the total interest you’d pay over the loan’s full term would add up to $75,559. But with a rate just one percentage point lower, at 7.00%, your monthly payment would be $581, and the total interest would drop to $64,554. The lower rate could ultimately save you $11,005 in total extra interest.
| Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|
| 8.00% | $627 | $75,559 |
| 7.50% | $604 | $70,007 |
| 7.00% | $581 | $64,554 |
Fixed vs Adjustable Interest Rates
Unlike HELOCs, home equity loans often have fixed interest rates. Your monthly payments will not change — they’ll stay the same for the entire length of the loan. A fixed rate may start off higher than an adjustable rate, but its stability can give you peace of mind, because you’ll know that your payments won’t suddenly spike.
Adjustable rates, on the other hand, might seem more attractive, but after a defined period, the rates “adjust” to follow a market index — and may be higher than the initial rate. Since the rates can change quite a bit over the life of an adjustable-rate loan, your payments may feel unpredictable.
When deciding between the two kinds of rates, think carefully about your financial goals, how flexible your budget can be, and how much risk you feel comfortable with.
Home Equity Loan Rate Trends
As you’re thinking about how to get equity out of your home, you can try to time your loan application to achieve the lowest possible rate. But predicting the prime rate is a bit like trying to forecast the weather, and not all borrowers have time to wait for low points. If you need a loan, focus on comparing offers from different lenders, and positioning yourself to get the best possible rate.
The prime rate has seen its fair share of ups and downs, as you can see from the graphic and chart below.
Source: TradingView.com
| 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
How to Qualify for the Lowest Rates
To secure the most competitive home equity loan rates in Houston, there are a few factors to keep in mind, whether you’re shopping for a HELOC vs. a home equity loan. Take the following steps before you begin the application process, and you’ll be positioned to land a home equity loan with an interest rate and term that are not just favorable, but smart and manageable.
Maintain Sufficient Home Equity
You need at least 20% equity in your home to qualify for a home equity loan. To figure out your equity, subtract your outstanding mortgage balance from the estimated value of your home. Then simply divide the answer you get by the estimated home value to arrive at a percentage of equity. The higher that percentage is, the better off you’ll be.
Build a Strong Credit Score
To land the best available home equity loan rate, you’ll want a robust credit score. Lenders often look for a score of 680 or higher, with many requiring a score over 700. A higher credit score is a sign of financial savvy and can often open the door to more favorable loan terms. By focusing on timely payments, reducing credit card balances, and steering clear of new debt, you can boost your chances of qualifying for a home equity loan with a lower interest rate.
Manage Debt-to-Income Ratio
Your DTI ratio is an important factor when it comes to qualifying for a home equity loan and getting a good rate. Lenders typically want to see a DTI ratio of 50% or less, and if yours is 36% or lower, it will help you qualify for the lowest interest rates. Manage your DTI effectively by paying down your existing debt, increasing your income, or achieving some combination of the two.
Obtain Adequate Property Insurance
Property insurance is a must-have if you want to get a home equity loan. This insurance is a safety net for both you and the lender should damage occur, so make sure your coverage is up to snuff.
Tools & Calculators
Online tools and calculators can be a big help in your quest for the best home equity loan rates. You can choose among multiple tools. Here’s just one: A home equity loan calculator lets you enter info about a particular loan and learn what the monthly payments would be, giving you a clear picture of what you can expect. It’s a nifty tool to make sure you won’t overextend yourself. Plus, you can play around with different interest rates and terms to find out how they might affect your payments.
Run the numbers on your home equity loan.
-
Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
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 for home equity loans, you’re looking at 2% to 5% of the loan amount. The table below shows some typical closing costs.
| Service | Typical Fees |
|---|---|
| Appraisal | $300-$500 |
| Credit report | $30-$50 or more |
| Document prep | $100-$500 |
| Loan origination | 0.5%-1.0% of the loan amount |
| Notary | $20-$100 |
| Title insurance | 0.5%-1.0% of the loan amount |
| Title search | $75-$250 or more |
While some lenders offer no-closing-cost loans, they often come with higher rates.
Tax Deductibility of Home Equity Loan Interest
The interest on your home equity loan may be tax-deductible if you’ll be using the funds to improve your home. For single filers, interest is deductible on the first $375,000 of loan debt. Married couples filing jointly can deduct the interest on up to $750,000 of debt. Just remember that you’ll need to itemize if you want to take advantage of this. A tax advisor can help you figure out what will make the most sense for your situation.
Alternatives to Home Equity Loans
Home equity loans aren’t the only way to leverage your home’s value. You might also consider a home equity line of credit (HELOC) or a cash-out refinance vs. home equity line of credit.
Home Equity Line of Credit (HELOC)
What is a home equity line of credit? A HELOC is akin to a credit card, offering homeowners the freedom to borrow up to a set limit and pay interest solely on what they use. Usually, there’s an initial “draw” period during which they can withdraw funds, followed by a repayment period in which they repay principal and remaining interest. Rates are generally adjustable.
Unlike a home equity loan, a heloc-repayment-calculator is all about flexibility. Keep in mind that adjustable interest rates mean that payments can fluctuate, potentially impacting your costs down the line.
Qualifying for a HELOC generally requires a credit score of 680 or higher (700 is even better) and a DTI ratio under 50% (ideally below 36%). HELOCs often permit you to borrow up to 90% of your home’s equity. Check out this HELOC monthly repayment calcuclator to help you see how the loan would look as you pay it down.
And if you’d like to calculate how much interest you’d have to pay during the “draw” period of a HELOC, try a HELOC interest-only calcuclator.
Cash-Out Refinance
A cash-out refinance is a strategic mortgage refinance in which you swap your original mortgage for one that’s larger than what you owe — and then take the difference in a lump sum. The rates on cash-out refis can be fixed or adjustable.
If you’re evaluating the benefits of a cash-out refinance vs. a home equity line of credit, it’s worth noting that it’s usually easier to qualify for a cash-out refi than for a home equity loan or a HELOC. While lenders can have different standards, cash-out refinances often require a minimum credit score of 620 and a DTI ratio of 43% or less.
The Takeaway
To get the best home equity loan rates in Houston, you’ll want to work on building your credit, managing your debt-to-income ratio, and securing property insurance. You can use online tools to estimate your payments and the amount you can borrow, but be sure to factor in closing costs as you make your decision. If a home equity loan isn’t the best fit for you, a HELOC or a cash-out refinance could also be an option. Be sure to weigh the benefits and risks of each to find the one that works best for your financial goals and situation.
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 are the common uses of a home equity loan?
Some popular reasons why people apply for home equity loans are to pay for home improvements and to consolidate high-interest debt. If you decide to pursue a home equity loan, remember to use the funds wisely and make sure the loan fits into your bigger financial picture.
What would monthly payments look like on a $50,000 loan?
The amount of your monthly payment for a $50,000 home equity loan can vary depending on the interest rate and the loan term. For example, if you got your loan at 7.00% interest over 15 years, your monthly payment would be about $449. At a 9.00% interest over 15 years, the payment would be around $507. A loan calculator can help you figure out what your monthly payments would be with different variables.
What might prevent you from getting a home equity loan?
A number of factors could get in the way of your securing a home equity loan. First, lenders typically require a minimum credit score, generally around 680 or more, so having a lower one could disqualify you. A high debt-to-income (DTI) ratio – usually above 50% – might also nix your loan. And having less than 20% equity in your home could be a red flag for lenders, too. Potential lenders will also look at how stable your home’s value is and how comprehensive your property insurance is. Qualifications vary by lender, but these are some common disqualifiers.
What are a home equity loan’s biggest benefits?
Home equity loans often come with fixed interest rates. They therefore have predictable monthly payments, which can make budgeting easier. They also usually have lower rates than unsecured personal loans, making them a cost-effective option for significant one-time expenses, such as home improvements or debt consolidation. Just be sure to balance the benefits with the potential risks. These include the threat of foreclosure on your home if you fall behind on payments.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*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.
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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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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More home equity resources.
-
What is a Home Equity Line of Credit
-
Different Types of Home Equity Loans
-
HELOC vs Home Equity Loan: How They Compare
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When Money Is Tight, Should You Still Treat Yourself?
This article appeared in SoFi's On the Money newsletter. Not getting it? Sign up here.
Between inflation, tariffs and a tougher job market, many Americans are in frugal mode. In fact, 52% are eating out less, 48% are spending less on clothing, and 39% are cutting back on travel, according to a Yahoo Finance/Marist Poll taken in May.
But is treating yourself out of the question when you’re trying to keep to a budget? What about if you’re on a “No Buy” kick where you’ve pledged to stop eating out or shopping altogether? Should you ever treat yourself?
Yes, actually. While you don’t want to use needing a treat as an excuse to lose your determination, giving yourself a reward every now and then can actually boost your resolve and improve your chances of reaching your financial goals. It’s all about knowing when and how to do it.
When You Should Treat Yourself
No one wants to be worrying about financial instability or making it to the next paycheck. And for most of us, discipline is key to building financial security. Impulse buying was shown to delay big financial goals for 52% of impulsive spenders, according to a 2023 online survey by The Harris Poll and YNAB.
But there are risks to going overboard. For one, it’s stressful worrying about every single expense. And during economic uncertainty, allowing yourself a small indulgence like a new lipstick or book can be a form of coping, providing a sense of control.
Being too restrictive can also make you feel deprived and then backfire, triggering a spending spree. The American Psychological Association suggests willpower is like a muscle that can become exhausted if used too frequently. The key is to plan for occasional indulgences, so you can satisfy the desire without jeopardizing your overall financial health.
Here are some specific situations when it can make sense to treat yourself — in moderation:
1. To celebrate an achievement. Rewards reinforce good behaviors. So if you’ve landed a new job, a dinner out could be a great way to celebrate. (Pro tip: If you’ve been looking to try that super fancy new restaurant but it’s out of your budget, go for lunch or brunch instead. It’s usually a cheaper way to experience the same ambiance and food.)
2. To invest in your mental health. If you’re stressed out, there’s nothing wrong with getting a massage, a therapy session, or even a higher quality mattress. Self-care is usually a worthy expense, and will put you in a better frame of mind for working toward your financial goals.
3. To give you a release valve: If you’ve ever been on a diet, you probably know that being too restrictive almost never works. The last thing you want is to derail your progress. So if a small splurge is what’s going to prevent a huge splurge, it’s worth it.
4. To make yourself happy: Being thoughtful and intentional with your money is the opposite of impulse buying, which people often regret. If there are occasional treats that will actually make you feel good — and not put you into debt — they’re important.
When You Should Hold Off
Too much treating yourself can throw your finances out of whack, keep you from feeling prepared for emergencies, and even leave you feeling guilty and ashamed. The trick is understanding your underlying motivations.
Here are key considerations to help you determine when to hold off:
1. Overspending and adding to debt can increase your stress level. A treat should make you feel good, not anxious and regretful. Plus, being stressed can actually make you vulnerable to more impulse spending, according to the TIAA Institute.
2. Small expenses add up. Indulgences like coffees out or Uber rides might not feel that expensive, but they add up if you treat yourself a lot.
3. Emotional spending can leave you gutted. Studies have shown that shopping triggers the release of dopamine, the brain’s “feel-good” neurotransmitter. But this mood boost is short-lived, and the subsequent letdown can create almost addictive behaviors. You want to spend again to regain that positive feeling.
4. Fear of missing out (or FOMO) isn’t a good reason to treat yourself. Impulse buys driven by sales or trends can lead to regret and clutter.
How to Treat Yourself and Keep to Your Budget
Incorporating the occasional indulgence into your financial plan can make you happier and healthier — without compromising financial health. Here are some strategies to treating yourself responsibly:
1. Allocate a budget. Plan ahead by designating a specific portion of your income for treats. This will ensure they don’t interfere with essential expenses or savings goals.
2. Be sparing. Treats are only treats because you don’t have them that often. If the novelty wears off, you won’t enjoy them much.
3. Rely on treats that don’t require money. Get out from behind your desk to walk in nature, visit a local museum on its free admission day, or take a bubble bath or nap. Here are some other fulfilling ways to treat yourself with little or no expense.
4. Practice mindful spending. Before buying a treat, stop and take a minute to check in with yourself. This will help you make intentional choices and avoid impulsive buying.
5. Prioritize treating yourself to experiences over things. Doing something — like attending a concert or exploring a new hobby — often provides more lasting satisfaction than a physical item.
6. Plan (way) ahead for larger indulgences. If you want to treat yourself to a vacation or high-end gadget, make a plan to save incrementally. For example, if your treat costs $2,000 and you have $50 a week of wiggle room in your budget, mark your calendar for 10 months out. You’ll have something great to look forward to.
Image credit: Bernie Pesko/SoFi Source iStock
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
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Read moreCurrent Home Equity Loan Rates in Collins, MS Today
COLLINS HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in Collins, MS.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Compare home equity loan rates in Collins.
Key Points
• Home equity loans typically offer much lower rates than unsecured personal loans and credit cards.
• Home equity loans provide a lump sum with fixed interest rates.
• The prime rate and the borrower’s credit score and financial history go into determining your rate.
• To secure the most favorable rates, keep your credit in good standing and your debt-to-income ratio low (ideally, below 36%).
• Before you apply, compare offers from multiple lenders and be sure to review the Loan Estimate form.
• Weigh the risks and benefits, and don’t forget to consider alternatives like a HELOC or cash-out refinance.
Introduction to Home Equity Loan Rates
If you’re exploring home equity loan interest rates in Collins, Mississippi, we can help. This guide will explain a bit about interest rates in general and the home equity loan application process. By the end, you should have a good understanding of how to secure the lowest available rate for your home loan, potentially saving you thousands of dollars.
First, what is a home equity loan, exactly?
How Do Home Equity Loans Work?
A home equity loan is a smart way to get equity out of your home, providing a lump sum of cash that you can use however you want. The amount you can borrow is based on the difference between your home’s appraised value and the remaining balance on your primary mortgage.
Let’s look at an example based on the average home value in Collins, which in July 2025 was just under $150,000. If your home is appraised at $150,000 and you owe $100,000 on mortgage, you have $50,000 in equity. Most lenders will allow you to borrow up to 85% of your equity, which is $42,500 in this case. Home equity loans typically feature fixed interest rates, making them a steady and predictable option. They’re great for large, one-time expenses and typically offer lower rates than unsecured personal loans.
A home equity loan calculator can help you determine your equity level and how large a loan you might qualify for.
Recommended: HELOC vs. Home Equity Loan
Where Do Home Equity Loan Interest Rates Originate?
The interest rates on home equity loans are the result of economic conditions and your own financial situation. The Federal Reserve’s decisions have a ripple effect on the broader lending market, which in turn influences home equity loan rates. Lenders typically set their base rates by adding a margin to the prime rate, which moves in sync with Fed policy.
Your credit score and debt-to-income ratio are also significant factors, with higher scores and lower ratios typically leading to more favorable rates. The loan amount and term can also play a role, with longer terms and larger loans often carrying higher interest rates due to increased risk.
How Interest Rates Impact Affordability
Your interest rate is a big deal when it comes to the affordability of a home equity loan. Even a fraction of a percent can add up to significant extra interest over the life of the loan. For example, a $30,000 home equity loan with a 15-year term at 8.50% interest has a monthly payment of $295 and total interest of $23,176. At 9.50% interest, the monthly payment jumps to $314 and the total interest comes to $26,388.
While a $20 difference in your monthly payment might not seem like much, it adds up. The higher interest rate will cost you more than $3,200 over the life of the loan. And the longer your repayment term, the higher those interest costs will be.
Home Equity Loan Rate Trends
Predicting interest rate movements is challenging due to the many factors involved. Still, with a little practice, you can get a sense of where interest rates are heading. The recent history of the prime rate, which home equity loan rates are tied to, shows how much variability there can be. In 2020, the prime rate hit a historic low of 3.25%. By 2023, it had shot up to 8.50%.
The goal is to time your application to catch lower rates. During times of extended elevated rates, that’s not always possible. That’s why it’s important to compare offers from multiple lenders to make sure you’re getting the best rate that’s currently available.
Source: TradingView.com
| 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
How to Qualify for the Lowest Rates
To secure an enviably low rate, you’ll need to present your best financial self. A robust credit score of 680 or above and a debt-to-income ratio below 36% are ideal. By working on your credit and shopping around for the best deal, you’ll be well on your way to scoring the most wallet-friendly terms and keeping those borrowing costs down.
Maintain Sufficient Home Equity
To be eligible for a home equity loan, homeowners must maintain at least 20% equity. To calculate your home equity, simply subtract your mortgage balance from your current home value. For example, if your mortgage balance is $140,000 and your home is valued at $200,000, your home equity would be $60,000, or 30% — well within the qualifying zone.
Equity is the key to unlocking a home equity loan, and ensuring you have enough is an important first step before you apply for any type of home equity loan.
Build a Strong Credit Score
Lenders generally look for a credit score of 680 or higher when considering home equity loans, with many favoring 700 or above. A robust credit score is a testament to your financial prudence and can significantly impact the rate you’re offered. Borrowers with a track record of timely payments and low credit utilization are more likely to secure favorable terms, potentially saving you thousands in interest over the loan’s lifetime.
To bolster your credit score, simply stay on top of your bills, keep credit card balances in check, and resist the urge to open multiple new credit lines at once. Regularly reviewing your credit report for inaccuracies and disputing them can also give your score a lift.
Manage Debt-to-Income Ratio
Your debt-to-income (DTI) ratio is another important number that lenders look at when determining your eligibility for a home equity loan. Your DTI, which compares your monthly income to your monthly debt obligations, should be below 50%, and even better, below 36%. A lower DTI ratio shows lenders that you have a good handle on your monthly payments, which can lead to more favorable loan terms.
To improve your DTI, consider paying down your existing debt, increasing your income (easier said than done, right?), or both. Lenders want to be sure that you can handle the additional financial responsibility without the risk of default.
Obtain Adequate Property Insurance
This requirement might come as a surprise: Property insurance is a must-have for home equity loans, particularly in flood-prone areas. But it makes sense, since insurance safeguards both the lender’s investment and your home. Having the right insurance can even influence the interest rate you’re offered, as lenders often see well-insured properties as lower risk.
Pro tip: Chat with your insurance provider to suss out the best coverage and costs, and don’t be shy to shop around for the most competitive rates and terms.
Tools & Calculators
Using these resources wisely can help you make informed decisions about home equity loans. By playing with different rates and terms, you can see how they impact your overall costs. And when you’re ready to move forward, comparing loan estimates from multiple lenders will help you find the best deal. Be sure to review all the details, including fees, to find the most suitable loan for your needs.
Run the numbers on your home equity loan.
-
Home Equity Loan
CalculatorEnter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment
CalculatorPunch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
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
Typically, closing costs for home equity loans fall between 2% and 5% of the loan amount. Standard fees include the appraisal, credit report, document prep, title search, and title insurance. Appraisals can be anywhere from $300 to $500, and credit reports for lenders average $50 to $100. Document prep has a wide range, from $500 to $2,000. Title searches usually cost between $100 and $250, and title insurance might be 0.5% to 1% of the loan amount.
Tax Deductibility of Home Equity Loan Interest
The interest you pay on a home equity loan might just be tax-deductible, especially if you’re using it to buy, build, or spruce up your home. The current rules are in play through 2025. If you’re married and filing jointly, you can potentially deduct the interest on loans up to $750,000; for single filers, that’s $375,000. Just remember, you’ll need to itemize to claim this deduction. It’s a great perk that might make a home equity loan even more attractive.
Alternatives to Home Equity Loans
You might also consider a HELOC or a cash-out refinance. All three options allow you to tap into the equity you’ve built in your home, but each has its own features and requirements. A cash-out refi is a type of mortgage refinance, where you end up with one payment instead of two. A HELOC is more like a credit card, allowing you to take out money as you need it.
Home Equity Line of Credit (HELOC)
A HELOC is a credit line that allows you to borrow up to a certain limit determined by your home equity. But you only pay interest on the amount you use. Just keep in mind that the interest rate can fluctuate with the market, which could mean increased costs if rates go up.
Lenders typically look for a credit score of 680 or higher (700 is preferred) and a debt-to-income ratio of less than 50% (ideally less than 36%). A HELOC is a great option if you’re not sure of the total amount you need to borrow or if you expect to have costs spread out over time.
During the initial “draw period,” which is usually 5-10 years, you usually make interest-only payments. (A HELOC interest-only calculator can show you how much payments might be based on the interest rate and amount borrowed.) Then during the repayment period, of 10-20 years, you stop borrowing and repay the full amount. (A HELOC monthly payment calculator can calculate what your payments will be including principal and interest.)
Recommended: What Is a Home Equity Line of Credit?
Cash-Out Refinance
A cash-out refinance is like hitting the reset button on your mortgage, but with a little extra cash in your pocket. You can typically borrow up to 80% of your home’s value, and you’ll need a credit score of 620 or higher and a DTI of 43% or less to qualify. The beauty of a cash-out refinance is that you can simplify your finances with just one monthly payment. Plus, it’s generally easier to qualify for than a home equity loan or HELOC.
For you visual learners, here’s an at-a-glance look at a cash-out refinance vs. a home equity line of credit vs. home equity loan.
| Home Equity Loan | HELOC | Cash-Out Refinance | |
|---|---|---|---|
| Borrowing Limit | Up to 85% of borrower’s equity | Up to 90% of borrower’s equity | 80% of borrower’s equity for most loans |
| Interest Rate | Fixed | Generally variable | May be fixed or variable |
| Type of Credit | Installment loan: Borrowers get a specific amount of money all at once that they then immediately begin repaying, with interest, in regular installments. | Revolving credit: Borrowers receive a line of credit. They have a draw period (5-10 years) during which they borrow and can only pay interest, followed by a repayment period (10-20 years) to repay the principal plus interest. | Installment loan: Borrowers receive a lump sum payment from the excess funds of their new mortgage, which has a new rate and repayment terms. |
| Repayment Term | Generally 5-30 years | A draw period of 5-10 years, followed by a repayment period of 10-20 years | Generally 15-30 years |
| Fees | Closing costs (typically 2-5% of the loan amount) | Closing costs (typically 2%-5% of the loan amount), plus other possible costs, depending on the lender (annual fees, transaction fees, inactivity fees, early termination fees) | Closing costs (typically 2-5% of the loan amount) |
The Takeaway
Home equity loans can be a powerful financial tool for homeowners seeking to tap into their home’s equity for major expenses. However, it’s important to evaluate your financial situation and shop around with multiple lenders to secure the best home equity loan rates in Collins. Your credit score, debt-to-income ratio, and the amount of equity in your home all play a role in determining the interest rate you qualify for. Before you apply, make sure you understand the risks and benefits, and consider alternatives like a HELOC and cash-out refinance. By making informed decisions, you can use your home equity to reach your financial goals.
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 are the common uses of a home equity loan?
You can use a home equity loan for just about anything you want. Common uses include large purchases, home improvements, and paying off high-interest credit card debt. The flexibility of these loans is what makes them so attractive.
What’s the monthly payment on a $50,000 home equity loan?
The monthly payment for a $50,000 home equity loan depends on the interest rate and loan term. For instance, at an 8.50% interest rate over a 15-year term, you’re looking at $492 per month. If you extend the repayment term to 20 years, the monthly payment drops to $434 – however the overall cost of the loan will actually increase, because you’re paying interest for longer.
What’s the monthly payment on a $100,000 HELOC?
A $100,000 HELOC usually comes with a variable interest rate, which means your monthly payment could fluctuate. During the draw period, you might only pay interest. At a 9.00% interest rate over a 10-year draw, your payment might be $750, not including rate changes. Once the draw period ends, you’ll start paying back both the principal and interest. With a 20-year repayment period, your payment could increase to about $900.
What’s the monthly payment for a $25,000 home equity loan?
The payment on a $25,000 home equity loan varies with the interest rate and loan term. For instance, at a 9.50% interest rate over a 10-year term, the monthly payment would be about $324. If you choose a repayment period of 15 years, the monthly payment drops to $261 — but you’ll end up paying more in interest over the longer term.
What might hinder your chances of securing a home equity loan?
There are several factors that can disqualify you from getting a home equity loan. The most common is not having enough equity in your home. Most lenders require 20% equity or more. Lenders also look at your debt-to-income (DTI) ratio, which should be 43% or lower (ideally, below 36%). Additionally, a poor credit history can prevent you from getting a home equity loan. If your credit score is below 620, you may have a hard time getting approved.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*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.
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 .
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.
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More home equity resources.
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