Current HELOC Rates in Virginia Today
VIRGINIA HELOC RATES TODAY
Current HELOC rates in
Virginia.
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 HELOC rates in Virginia.
Key Points
• Factors such as credit score, home equity, and debt-to-income ratio significantly influence home equity line of credit rates in Virginia.
• Comparing rates from various lenders is crucial for securing the most favorable Virginia HELOC rates.
• HELOCs offer flexible access to funds for home renovations, debt consolidation, or significant expenses.
• Understanding the draw and repayment periods, and factors affecting rates is essential if considering a HELOC.
• There are alternatives to HELOCS including home equity loans, personal loans, and a cash-out refinance.
Introduction to HELOC Rates
A HELOC, or home equity line of credit, provides flexible access to funds for home renovations, debt consolidation, or significant expenses. The key to its affordability is the interest rate a borrower manages to secure. This article provides an overview of HELOCs in Virginia, explaining what is a home equity line of credit, how HELOC rates in Virginia are set, and what factors will influence the rate you’ll receive. As you’re thinking about how to get equity out of your home it helps to have strategies for how to present your HELOC application, and we’ve got that, too. But let’s start with the basics.
What Is a HELOC?
A home equity line of credit (HELOC) is a revolving line of credit. Using one is similar to using a credit card, but one that is secured by your home. A lender may allow you to borrow up to 90% of the home’s value, minus your mortgage balance. One advantage of a HELOC is that you only withdraw from it what you need at a given time — and you only pay interest on what you withdraw. HELOC interest rates are usually variable, meaning they can rise (or fall) with market conditions. HELOCs have two phases: the draw period and the repayment period.
The Draw Period
During the HELOC’s draw period (usually 10 years), you can access funds up to your credit limit, make payments to pay down your balance, and even borrow the money again. Interest payments are typically required during this period, while principal payments are often optional. A HELOC interest only calculator can help you see what monthly payments might look like during the draw period.
The Repayment Period
During the repayment period (typically 10 to 20 years), borrowing ends and the principal is paid back with interest. HELOCs offer lower interest rates than many other forms of borrowing because your home serves as collateral. But especially because your home is on the line, it’s important to think about how a variable interest rate might change your payment amounts over the course of a HELOC. Using a HELOC repayment calculator can provide valuable insights into what payments might be depending on different borrowing levels and interest rates.
Where Do HELOC Interest Rates Come From?
HELOC interest rates are tied to the prime rate, which is the benchmark interest rate that lenders set for very creditworthy customers. Prime rates are in turn influenced by Federal Reserve policy decisions. Understanding these factors can help borrowers keep tabs on Fed movements and rate fluctuations and make an informed decision about when to apply for a HELOC.
How Interest Rates Impact HELOC Affordability
Interest rates have a significant influence on the affordability of HELOCs, both the monthly payment and the lifetime interest paid. As you can see from the chart below — which shows different interest amounts based on rate, term, and amount borrowed — it pays to research the best HELOC rates in Virginia to ensure you are getting the most competitive offers available.
| Loan Amount | Loan Term | Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|---|---|
| $100,000 | 20 years | 8.00% | $836 | $100,746 |
| 7.00% | $775 | $86,072 | ||
| 10 years | 8.00% | $1,213 | $45,593 | |
| 7.00% | $1,161 | $39,330 | ||
| $50,000 | 20 years | 8.00% | $418 | $50,373 |
| 7.00% | $388 | $43,036 | ||
| 10 years | 8.00% | $607 | $22,797 | |
| 7.00% | $581 | $19,665 | ||
| $25,000 | 20 years | 8.00% | $209 | $25,186 |
| 7.00% | $194 | $21,518 | ||
| 10 years | 8.00% | $303 | $11,398 | |
| 7.00% | $290 | $9,833 |
HELOC Interest Rate Trends
One way to gain perspective on whether you’re being offered a good rate is to understand the history of the average prime rate. Since 2018, the prime rate has fluctuated, reaching a low of 3.25% in 2020 and a high of 8.50% in 2023, as you can see in the chart below. The graphic shows the average prime rate over more than a half-century. As you think about the variable rate of a HELOC, it’s helpful to see what kind of swing in the prime rate has happened historically and how broad (or not) those changes have been over a decade or two.
Historical Prime Interest Rate
| Date | U.S. 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 | 5.5% |
| 9/27/2018 | 5.25% |
Source: U.S. Federal Reserve
Historical U.S. Prime Rates
Factors Influencing HELOC Rates
Of course, if everyone was offered the prime rate, you could stop reading right now. But lenders adjust their rate offers based on a series of metrics that is distinctive to you. Get to know them so you can see if any might get your application red-flagged.
Home Equity
As you’ve been making monthly payments on your home loan, you’ve built up equity in your property. You’ll need at least 15% to 20% equity to qualify for a HELOC, and the more substantial your ownership stake, the better rate you may get.
Credit Score
A credit score of 680 or higher is a good place to be when applying for a HELOC, but higher is better. Some lenders prefer a score of 700 or more.
Stable Income
Lenders assess your income to determine your ability to repay the HELOC. A stable income signals to them a lower risk of default, potentially leading to better HELOC rates. An erratic income isn’t a deal-breaker, but you might find that you have to take extra steps during the application process to show your earnings, such as providing more than one year of tax return information.
Loan-to-Value Ratio
Lenders usually require a combined loan-to-value ratio of 90% or less. For example, if your home is worth $500,000 and you have a $300,000 mortgage and want a $100,000 HELOC, your LTV ratio would be 80%, safely within the margin.
Variable vs Fixed Interest Rates
As we’ve seen, HELOCs feature variable interest rates, which will fluctuate during the loan term. Variable interest rates usually start out lower than fixed rates but adjust up and down with market conditions. A HELOC calculator can help you see what might happen if your entry HELOC rate adjusted up by, say, a half a percentage point or more.
Tools & Calculators
Calculators can not only assist you in estimating monthly payments, but can show you the total interest you might pay over the life of a HELOC or home equity loan. Here are a few we recommend:
Run the numbers on your HELOC.
-
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.
How to Qualify for a Competitive HELOC Rate
To qualify for a competitive home equity line of credit rate, it is prudent to concentrate on enhancing your credit score, maintaining a consistent income stream, and ensuring that your loan-to-value ratio remains low. These factors are evaluated by lenders when determining the interest rate offered.
Care for Your Credit Score
Pay on time and avoid maxing out all your credit cards — it’s good credit hygiene for life. Another thing you’ll want to do is check your credit report for errors. They do happen and fixing them can help your score recover.
Assess Your Home Equity
You know you need at least 15% equity in your home for a HELOC. Maybe you have enhanced your home value through renovations. Or perhaps you live in a hot real estate market. Take a few minutes to look up your home’s estimated value on a real estate web site. Subtract from that amount whatever you owe on your mortgage. Then divide the result by the estimated value. That’s your home equity percentage.
Calculate Your Debt-to-Income Ratio (DTI)
Your DTI ratio is how much you owe in monthly debt payments divided by your gross monthly income. Home equity lenders generally look for a DTI that’s below 50%, although some like 36% or less. Generally, the lower the better.
Application Process for a HELOC in Virginia
The steps involved in the application process for a HELOC in Virginia include reviewing your financial health, comparing rates, preparing documentation, submitting an application, undergoing a home appraisal, and waiting for approval and closing. Each step is crucial for securing a HELOC.
Step 1. Run the Numbers
Some lenders enable prospective borrowers to prequalify for a home equity line of credit online, thereby streamlining the application process. These lenders will calculate your DTI ratio and equity. If you don’t prequalify online, you’ll need to do the math by hand. First make sure you have at least 15% equity. Then ensure a DTI ratio of at least 50%. If you tick both boxes, it’s time for Step 2.
Step 2. Compare Lenders
When seeking the best HELOC rates in Virginia, it’s essential to compare various lenders. Don’t just look at posted interest rates. Consider factors such as qualification requirements, loan minimums and maximums, the length of draw and repayment periods, and fees.
Step 3: Gather Your Documents
To ensure a smooth and efficient HELOC application process, it’s important that you gather all the necessary documentation, including proof of income, a detailed employment history, and details about your property’s insurance coverage. Having these documents readily available will expedite the completion of your HELOC application.
Step 4: Submit Your Application
Submitting your HELOC application online or in person (or sometimes even by phone) is the next step. A complete and accurate application will better your chances of approval and helps you secure competitive HELOC rates in Virginia.
Step 5: Get an Appraisal
After you submit your application, you will probably need a home appraisal. This might be an in-person appraisal, or a lender may use an automated valuation model (AVM) appraisal, where an algorithm uses data to decide a home’s estimated value. The appraisal helps determine the amount of equity you have in your home, which affects your HELOC rate.
Step 6: Prepare for Closing
Once you find a HELOC offer at an acceptable interest rate and with terms you consider favorable, you’re ready to sign the loan agreement. Before accessing your HELOC funds, you’ll also pay necessary fees. Lenders can make funds available as quickly as three days after the closing. Ensuring all paperwork is in order and fees are paid will help you access your funds promptly.
Tax Benefits and Considerations
Homeowners can deduct HELOC interest if the funds are used for buying, building, or significantly improving their primary residence. Deductions are limited to interest paid on the first $375,000 of the mortgage principal for individual taxpayers ($750,000 for married couples filing jointly). Consult a tax advisor to navigate specific tax implications and confirm eligibility. And save your receipts for home improvements.
Closing Costs and Fees
HELOC closing costs are lower than home buying or cash-out refinance. The appraisal fee is usually the highest expense, ranging from $300 to $600. Other costs include application, loan origination, and administrative fees. Some lenders offer to reduce or waive closing costs but they may charge a higher interest rate.
Alternatives to HELOCs
In addition to HELOCs, there are different types of home equity loans and other financing options available. Consider this list before you sign on to any type of borrowing.
Home Equity Loan
Home equity loans and HELOCs are often confused. So it’s helpful to see what is a home equity loan and how it’s different from a HELOC. Unlike home equity lines of credit, home equity loans provide a lump sum and have a fixed interest rate. Homeowners can typically access up to 85% of the equity built in their home through a home equity loan. A home equity loan calculator can help you see how much you might be able to borrow. Here’s a quick look at the HELOC vs. home equity loan comparison:
| 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; 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 |
Cash-Out Refinance
A cash-out refinance is a mortgage refinance that allows homeowners to refinance their existing mortgage for more than they owe, paying off their initial loan and taking the balance in cash. It’s useful for those who need a large lump sum.
A few things to think about if you’re considering a cash-out refinance vs. a home equity line of credit: The refinance means you’ll have only one monthly payment, as opposed to two if you take on a HELOC while paying off a mortgage. It also means a new interest rate and loan terms. If rates have dropped since you initially financed your home, this could be good news. Look closely at current interest rates in Virginia to make sure you aren’t paying significantly more interest by refinancing.
Personal Loan
Personal loans can be used to cover a wide range of expenses, just like HELOCs and home equity loans. However the repayment term tends to be shorter — 2 to 7 years. Interest rates for personal loans are also often higher than those for HELOCs or home equity loans because personal loans are unsecured. Some borrowers like the fact that their home wouldn’t be used as collateral. And because you sidestep a home appraisal, the loan approval process may be faster, too.
Credit Cards
Credit cards tend to come with higher interest rates than HELOCs, which can make them much more expensive if you carry a big balance from month to month. When considering borrowing strategies, it’s worth noting that a home equity loan or HELOC can offer a better rate and more flexible repayment terms than a credit card.
The Takeaway
HELOCs present Virginia homeowners with a highly flexible method to effectively leverage their home equity for a wide range of financial needs. Given the availability of competitive rates and a diverse selection of lenders, homeowners can conveniently secure substantial loan amounts for various purposes. Carefully tending your credit score, fully documenting your application, and comparing lenders’ rates can help ensure you get the best available HELOC rate in the state.
SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.
Unlock your home’s value with a home equity line of credit brokered by SoFi.
FAQ
What is the monthly payment on a $50,000 HELOC?
The monthly payment on a $50,000 home equity line of credit (HELOC) is contingent upon the interest rate and repayment conditions — and of course, whether you are using the entire credit line. The best way to get the precise monthly payment is to plug your numbers into an online HELOC payment calculator.
Is a HELOC a good idea right now?
Deciding if a home equity line of credit (HELOC) is a sound financial move will depend on your financial circumstances. A HELOC is a very flexible way to borrow because you only borrow (and pay interest on) what you need. Do you need to borrow in increments, and are you comfortable with the HELOC’s variable interest rate? If so, a HELOC may be a good move for you.
What is the monthly payment on a $100,000 HELOC?
The monthly payment on a $100,000 HELOC will be based on how much of the credit line you have used, and on your term and rate. If you use the entire $100,000 and need to pay it back at 7.50% interest over 20 years, your monthly payment would be $806. If you had a 7.00% interest rate, you would pay less: $775.
What are the benefits of a HELOC?
A home equity line of credit is a very flexible way to borrow. You only withdraw what you need at any given time. HELOCs also typically have a lower interest rate than a personal loan or credit card. You can use the funds borrowed from a HELOC for anything. And many borrowers find it reassuring to have a credit line open for any unexpected emergencies.
Do you need an appraisal for a HELOC?
Yes, an appraisal is usually a must for a HELOC. The value of your home helps the lender decide how much money you can borrow — and whether you can borrow at all.
What disqualifies you from getting a home equity loan?
Poor credit history, insufficient home equity, and a high debt-to-income ratio are some of the factors that can disqualify you from obtaining a home equity loan.
How difficult is it to get a HELOC?
The level of difficulty associated with getting a HELOC depends on your credit score, home equity, and debt-to-income ratio. Homeowners with strong financial profiles may find qualifying for a HELOC to be smooth sailing, whereas those with less favorable profiles may run up against challenges.
Does HELOC affect credit score?
Applying for a HELOC may result in a hard inquiry on your credit report, which can cause a temporary decrease in your score. How you manage your HELOC can also influence your credit score over the long term. If you’re the pay-on-time type, you should be fine.
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.
SOHL-Q424-056
More HELOC 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 HELOC Rates in Montana Today
MONTANA HELOC RATES TODAY
Current HELOC rates in
Montana.
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 HELOC rates in Montana.
Key Points
• Look at an array of offers from different lenders to find the best home equity line of credit (HELOC) rates in Montana.
• The amount of equity you have in your home and your income stability influence HELOC rates in Montana.
• Maintaining a high credit score and low debt-to-income ratio will improve your eligibility.
• HELOCs have two phases: draw and repayment.
• Following the prime rate’s ups and downs may help borrowers anticipate changes in HELOC rates in Montana.
Introduction to HELOC Rates
If you are looking to learn about home equity lines of credit (HELOC) and what the rates are in Montana, chances are you’ve been making timely home loan payments and building up valuable home equity. Congratulations.
Before you begin an application, use this guide to learn about the underlying factors that influence HELOC rates. It will help you choose the best offer for your personal financial needs.
You’ll find out what drives rates in Montana and come away knowing how to put your best foot forward with a prospective lender. We’ll take you step by step through the application requirements. And because a HELOC is just one way to get equity out of your home, we’ll explain alternatives to HELOCs as well.
What Is a HELOC?
A HELOC is a revolving line of credit using your home as collateral. The credit line you qualify for will depend on your home’s value and the remaining balance on your mortgage. Qualified borrowers may be able to pull out as much as 90% of their equity with a HELOC. You can draw, repay, and draw again with this flexible type of credit line.
HELOCs have two phases: draw and repayment. It’s important to understand them both.
The Draw Period
During a HELOC’s draw period, usually 10 years long, you have access to funds up to your credit limit. Payments in this period tend to be interest-only, with principal payments optional. If you pay down the principal, you can borrow against the full credit line more than once. A HELOC interest only calculator can help you manage your finances during the draw phase.
The Repayment Period
The repayment period of a HELOC may last 10 to 20 years. During that time, your borrowing ends and you pay back the principal with interest. Your interest rate is usually variable, and that can make monthly repayment amounts unpredictable. A HELOC repayment calculator can help you figure out what your monthly payments would be at various interest rates.
Where Do HELOC Interest Rates Come From?
Variable HELOC interest rates change over the life of the credit line, and are related to the prime rate — the rate banks and other lenders charge customers they think carry the least risk of default. Lenders look to Federal Reserve rates when setting their prime rates.
How Interest Rates Impact HELOC Affordability
An interest rate can have a significant impact on a HELOC’s affordability. When it’s time to repay a $60,000 HELOC, having an interest rate of 6.00% over a 20-year term would make your monthly payment $430. A 7.00% interest rate would increase that payment to $465. Looking at the entire term, the customer with the 7.00% interest rate would pay an additional $8,477 overall.
The more you borrow and the higher your interest rate, the larger the numbers. This chart shows you more examples:
| Loan Amount | Loan Term | Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|---|---|
| $100,000 | 20 years | 8.00% | $836 | $100,746 |
| 7.00% | $775 | $86,072 | ||
| 10 years | 8.00% | $1,213 | $45,593 | |
| 7.00% | $1,161 | $39,330 | ||
| $50,000 | 20 years | 8.00% | $418 | $50,373 |
| 7.00% | $388 | $43,036 | ||
| 10 years | 8.00% | $607 | $22,797 | |
| 7.00% | $581 | $19,665 | ||
| $25,000 | 20 years | 8.00% | $209 | $25,186 |
| 7.00% | $194 | $21,518 | ||
| 10 years | 8.00% | $303 | $11,398 | |
| 7.00% | $290 | $9,833 |
HELOC Interest Rate Trends
Interest rates for HELOCs closely follow the prime rate. Understanding and anticipating possible interest rate fluctuations can help a homeowner make sound decisions when applying for a HELOC.
Historical Prime Interest Rate
The prime rate has ranged from a low of 3.25% in 2020 to a high of 8.50% in 2023. Its fluctuations over the years have directly influenced HELOC rates in Montana.
| Date | U.S. 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 | 5.5% |
| 9/27/2018 | 5.25% |
Source: U.S. Federal Reserve
Historical U.S. Prime Rates
Factors Influencing HELOC Rates
In addition to the prime rate, HELOC rates in Montana are significantly influenced by a borrower’s level of home equity, credit score, income, and loan-to-value (LTV) ratio. When all of these factors are optimal, the homeowner’s chances of securing a favorable HELOC rate are high.
Home Equity
If you hold significant equity in your home, you can usually score an attractive interest rate for a home equity line of credit. Homeowners who possess a minimum of 15% equity generally qualify for a HELOC. The more equity you have, the less risk your lender assumes.
Credit Score
To secure the most advantageous interest rates on HELOCs, you will want to maintain a credit score of 680 or higher — ideally, 700 or above. A higher score indicates to lenders that you present a lower risk.
Stable Income
Lenders assess your ability to pay back a HELOC by looking at your income. A borrower with a steady stream of income is less likely to default. This means you will almost always get a better interest rate if you can provide documentation of consistent income when you apply.
Loan-to-Value Ratio
Many lenders require you to show a combined loan-to-value ratio (mortgage balance + desired HELOC amount / appraised home value) of 85% or less. If your home is worth $500,000 and your mortgage balance is $300,000, for example, and your HELOC balance is $100,000, then your combined LTV ratio will be 80%.
Variable vs Fixed Interest Rates
A HELOC’s variable interest rate means that your rate changes throughout the life of the loan. Variable interest rates frequently start lower than fixed rates, then adjust upward or downward depending on conditions in the market. Understanding how variable rates work is key to managing a HELOC throughout the two phases.
Tools & Calculators
Financial tools like a HELOC monthly payment calculator, a HELOC interest-only calculator, and a home equity loan calculator can be helpful resources. Widgets like these will help you estimate your payments and understand a home equity line of credit’s financial implications.
Run the numbers on your HELOC.
-
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.
How to Qualify for a Competitive HELOC Rate
To secure the best HELOC rates in Montana, you’ll want to make sure you have stellar credit, among other things. Do these things before you apply:
Take Care of Your Credit Score
Keep up with your payments and chip away at your credit card balances. When you take care with these things, you’re not just tidying up your finances — you are nurturing your credit score. Regularly review your credit reports. Correct inaccuracies promptly. The higher your credit score, the more attractive a candidate you are for a home equity line of credit.
Assess Your Home Equity
If you are planning to apply for a HELOC, make sure you have 15%–20% equity in your home, or even more. Build equity by making timely mortgage payments every month, or by investing in improvements. As your home’s value increases, your equity will grow.
Calculate Your Debt-to-Income Ratio (DTI)
You can figure out your DTI ratio using a simple formula: your total monthly debt payments (car loan, student loan, etc.) divided by your gross monthly income. Some lenders will allow a DTI below 50%. Others require 36% or less. Lower is always better. This number is important in determining your eligibility for a HELOC, as well as the terms you might be offered.
Application Process for a HELOC in Montana
The application for a home equity line of credit involves a multi-step process, including a financial evaluation, a formal application, and a home appraisal. Here’s a step-by-step.
Step 1. Run the Numbers
Before you jump in to apply for a home equity line of credit, size up your finances. Start by compiling your credit score info and DTI ratio. Some lenders invite you to prequalify for a HELOC online, and doing so can help you suss out whether your stats meet their requirements.
Step 2. Compare Lenders
Look at interest rates, along with lenders’ qualifications, credit limits, fees, and the duration of their draw and repayment periods. All these stats will give you a sense of which lenders might be a good fit for you.
Step 3: Gather Your Documents
Before you apply, gather the following: recent pay stubs, your latest tax return, a recent mortgage statement, and bank statements. Self-employed applicants should be ready with at least two years of tax returns. Having these documents prepared will ease the process.
Step 4: Submit Your Application
Once your ducks are in a row, you’re ready to submit the application. You can do this online, over the phone, or in person, depending on the lender. Double-check everything before you hit “send” or “submit” to avoid any issues going forward.
Step 5: Get an Appraisal
Your home’s appraisal is key to the HELOC process, since its market value is a determinant of how much equity you have, and that influences how much credit a lender might offer you.
Step 6: Prepare for Closing
Before you can draw on your credit line, you’ll need to sign paperwork and take care of any fees charged by the lender. Lenders often make funds available quickly — sometimes around three business days after you sign.
Tax Benefits and Considerations
If you decide to use HELOC funds to buy, build, or improve your home, you could deduct the interest you pay on the first $375,000 borrowed if you file taxes as an individual ($750,000 if you are married and filing jointly). Consulting with a tax advisor for specifics is smart and will help you make the most of deductions related to your home equity line of credit.
How Much Does a HELOC Cost?
HELOC closing costs are lower than those for buying a home or a mortgage refinance. The appraisal fee, which may range from $300 to $600, is typically the most significant line item. Other costs may include application, origination, and administrative fees. Some lenders charge annual maintenance, transaction, inactivity, or early termination fees. Be aware that reduced or waived closing costs may come with a higher interest rate.
Alternatives to HELOCs
Other ways to get equity out of your home are available, such as different types of home equity loans and cash-out refinancing. Personal loans are also an option if you prefer an unsecured loan. Consider the advantages and disadvantages when looking at each option to determine which best meets your requirements.
Home Equity Loan
When you compare a HELOC vs. home equity loan, you’ll find that the latter provides a fixed lump sum amount and is paid back at a fixed interest rate. Borrowers may be able to access up to 85% of their home equity through this option.
You can use a home equity loan calculator to estimate your borrowing capacity. Here’s a quick look at some differences between the two:
| 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; 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 |
Recommended: What Is a Home Equity Loan?
Cash-Out Refinance
If you are debating between a cash-out refinance vs. a home equity line of credit, this might help: With cash-out refinancing, homeowners can refinance their mortgage for more than what’s owed. They then will receive the difference in cash. This option may suit you if you need a large lump sum.
Personal Loan
This option does not require collateral, making it viable for those without significant home equity. Personal loans will pay out anywhere from $1,000 to $100,000 and are paid back in regular, set payments over a term of 2–7 years. You can use a personal loan for home improvements, debt consolidation, and other large expenses.
Credit Cards
Credit cards and HELOCs are both revolving debt options. Instead of receiving a big chunk of money, you access a credit line that you can tap as needed. Credit cards, of course, come with higher interest rates than HELOCs, and that can make them more expensive if you carry a large balance month upon month. While cards may offer flexibility for smaller purchases, a home loan like a HELOC may be a more cost-effective solution for larger expenses like home improvements, or if you are consolidating debt.
The Takeaway
A home equity line of credit can be a valuable financial tool for homeowners seeking to capitalize on their home’s accumulated equity. HELOCs provide competitive interest rates and flexible options for repayment. Homeowners who aren’t sure how much they need for a major project may find a HELOC a worthwhile option to consider. Just keep in mind that a HELOC’s variable interest rate means monthly payments can increase unexpectedly if the market shifts.
SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.
Unlock your home’s value with a home equity line of credit brokered by SoFi.
FAQ
What is the monthly payment on a $50,000 HELOC?
The monthly payment on a $50,000 home equity line of credit can vary, based on how much of the credit line you draw, the interest rate, and the repayment term. With an 8.00% interest rate and a 10-year term, your monthly payment will be about $607. This is assuming you will make interest-only payments through the draw period.
Is a HELOC a smart move for you?
To determine whether a home equity line of credit is a sound financial decision, you’ll need to consider your individual financial circumstances. While HELOCs can be advantageous for home improvements, debt consolidation, and other big expenses, it’s essential that you carefully consider the interest rates, repayment terms, and potential risks of assuming this type of credit.
What is the monthly payment on a $100,000 HELOC?
The payments you’ll need to make on a $100,000 home equity line of credit (HELOC) can be easily calculated with a HELOC monthly payment calculator. The interest rate, the repayment term, and other details will influence the monthly payment. If you assume you’ll draw the full amount, secure a 7.00% interest rate, and repay over a 20-year term, your monthly payment will be about $836.
What are the benefits of a HELOC?
HELOCs offer homeowners flexible access to funds, competitive interest rates, and potential tax advantages. They can help fund home improvement projects, educational expenses, and debt consolidation.
Do you need an appraisal for a HELOC?
Yes. An appraisal is generally required for HELOC applications, as they help a lender to ascertain the property’s current market value. With the appraisal, lenders can evaluate the amount of available equity and set the borrowing limit.
What might prevent you from getting a home equity loan?
Several factors, including a poor credit history, insufficient home equity, or a high debt-to-income ratio, may disqualify you from receiving a home equity loan. Familiarize yourself with various home equity loan requirements to enhance your chances of meeting the criteria for a loan.
How hard is it to get a HELOC?
How hard it is to secure a HELOC may be contingent on several factors, including your credit score, your amount of home equity, and your income stability.
Does HELOC affect credit score?
When you apply for a home equity line of credit, it may temporarily cause a slight decrease in your credit score because of the hard inquiry. But when you make consistent and punctual payments on your HELOC, it can have a positive impact on your credit score over time by demonstrating your responsible borrowing behavior and positive credit history.
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.
SOHL-Q424-036
More HELOC resources.
-
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 HELOC Rates in Oregon Today
OREGON HELOC RATES TODAY
Current HELOC rates in
Oregon.
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 HELOC rates in Oregon.
Key Points
• Comparing home equity line of credit rates in Oregon is essential for finding suitable lenders and competitive rates.
• Factors such as home equity, credit score, and income stability play a pivotal role in determining the HELOC rate offered in Oregon.
• HELOCs offer lower interest rates because borrowers use their home as collateral.
• HELOC interest rates are tied to the prime rate and can be influenced by broad economic factors.
• Maintaining a credit score of 680 or higher will help in securing a HELOC in Oregon.
Introduction to HELOC Rates
If you’re thinking about how to get equity out of your home in Oregon, this comprehensive article will ensure you have a solid grounding in the best home equity line of credit interest rates in Oregon and how to obtain them. You’ll gain valuable insights into the various factors that influence rates, plus advice on how to apply for a HELOC as well as different types of home equity loans and other ways to borrow.
First it’s important to make sure we cover the basics, starting with what is a home equity line of credit.
What Is a HELOC?
A HELOC is a revolving line of credit similar to a credit card. The amount you can borrow is based on your home equity, which is the difference between your home’s current value and your home loan balance. You don’t have to borrow the entire amount of the credit line at one time; you can borrow as you need to, and you’ll only pay interest on the amount of the credit line that you actually use. Lenders may allow you to borrow up to 90% of your home’s value, minus your mortgage.
HELOC interest rates are often variable, and so the cost of a HELOC can go up or down each month based on the amount of the credit line that you are using and your variable rate. But initial rates on a HELOC are typically lower than rates for personal loans or credit cards because your home is serving as collateral.
HELOCs have two main phases: the draw period and the repayment period.
The Draw Period
During the HELOC’s draw period (usually 10 years), you can access funds up to your credit limit, make payments to pay down your balance, and borrow the money again. The borrower is usually required to make interest payments during the draw period, but payments toward the principal may be optional. Borrowers can use a HELOC monthly payment calculator to estimate payments.
The Repayment Period
During the repayment period (10 to 20 years), borrowing ends and the principal is paid back with interest. A HELOC repayment calculator can help borrowers plan their payments.
Where Do HELOC Interest Rates Come From?
HELOC interest rates are tied to the prime rate and can be influenced by broad economic factors. The prime rate is the benchmark interest rate that banks charge their most creditworthy customers. Federal Reserve policy decisions regarding interest rates can also influence lenders as they set their rates. The best Oregon HELOC rates can vary, so it’s important to compare offers from different lenders during the application process.
How Interest Rates Impact HELOC Affordability
The interest rate you obtain for your HELOC can make a big difference in the affordability of a loan over the course of a 10-year draw and a 20-year repayment term. Even a 1% difference in interest rate can result in thousands — or even tens of thousands — of additional interest over the life of the loan. Here’s an example of a $50,000 HELOC repaid over 20 years at three different interest rates:
• At 6.00%: monthly payment $358, total interest paid $35,972
• At 7.00%: monthly payment $388, total interest paid $43,036
• At 8.00%: monthly payment $418, total interest paid $50,373
HELOC Interest Rate Trends
As you begin the process of searching for the best HELOC rates in Oregon, it’s helpful to understand how the average prime rate has fluctuated in recent years, as well as over the decades. It will help keep your rate expectations realistic.
Since 2018, the prime rate has undergone noteworthy fluctuations, ranging from a low of 3.25% in 2020 to a high of 8.50% in 2023, as you can see from the chart below. The graphic below shows a longer time period. As you can see, rates that are below 4.00% or above 10.00% are somewhat uncommon.
Historical Prime Interest Rate
| Date | U.S. 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 | 5.5% |
| 9/27/2018 | 5.25% |
Source: U.S. Federal Reserve
Historical U.S. Prime Rates
Factors Influencing HELOC Rates
The prime rate isn’t the only factor influencing the HELOC rate you’ll be offered. Your level of home equity, your credit score, and other information specific to you will guide the lender’s decision, and different lenders weigh factors differently — that’s why it’s important to do your homework when searching for the best HELOC rates in Oregon. Let’s look at these data points:
Home Equity
Having a significant amount of equity in your home makes you appear less risky to lenders, which can often lead to more favorable interest rates. Typically, homeowners need at least 15% to 20% equity in their property to qualify, and the more equity the better.
Credit Score
Maintaining a credit score of 680 or higher is crucial, and some lenders prefer a credit score of 700+. A higher credit score indicates lower risk, potentially leading to more favorable HELOC terms.
Stable Income
Lenders assess your overall income to determine your ability to repay the HELOC. But they are also looking at how consistent your income stream has been. If your income is erratic, a lender may ask you to provide extra documentation, such as additional tax returns, during your application process.
Loan-to-Value Ratio
Most lenders require your combined loan-to-value ratio (combined mortgage and credit line balance / appraised home value) to be 90% or less for a HELOC. The ratio is a key metric in determining your credit limit. If your mortgage balance is $300,000 and your desired HELOC is $100,000, and your home value is $500,000, then your LTV ratio is 80%.
Variable vs Fixed Interest Rates
HELOCs’ variable interest rates are subject to change during the life of the loan. Initially, variable interest rates are lower than typical fixed rates, but after a predetermined introductory period, which will be defined in the HELOC agreement, they fluctuate in accordance with market conditions. Home equity loans are another way to borrow money against your home equity. These loans are usually fixed rate.
Tools & Calculators
As you’re thinking about the costs of a HELOC, it’s helpful to use online calculators to assess how much you might be able to borrow and what monthly payments and total interest paid look like with different HELOC interest rates. Here are three useful tools:
Run the numbers on your HELOC.
-
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.
How to Qualify for a Competitive HELOC Rate
Since lenders factor in your personal financial metrics when they decide what interest rate to offer you, it’s helpful to take a few steps before applying for a HELOC to ensure you present the best possible picture. Here’s a to-do list:
Take Care of Your Credit Score
As noted above, you’ll want to have a score of at least 680. Check your credit score and examine your credit report for any inaccuracies. Mistakes do happen, and fixing errors can help your score. You’ll also want to avoid using the full credit line available to you on any credit cards you have. And of course pay your bills on time.
Assess Your Home Equity
Regular mortgage payments have helped you build home equity over time. But how much equity? Look up your home on a real estate web site to find a rough estimate of its value. Subtract what you owe on your mortgage from your home’s estimated value, then divide the answer by your home’s estimated value to arrive at a percentage of equity. Ideally, it’s greater than 15% or, even better, 20%.
Calculate Your Debt-to-Income Ratio (DTI)
Your DTI ratio is how much you owe in monthly debt payments divided by your gross monthly income. Home equity lenders generally look for a DTI that’s below 36%, though some prefer an even lower number. But the lower your DTI, the better.
Application Process for a HELOC in Oregon
Applying for a HELOC in Oregon will involve sharing lots of financial details, so you’ll want to have your documents in order before approaching the application process. Follow this guide.
Step 1. Run the Numbers
Before applying for a HELOC, make sure your financial factors will work in your favor. Is your credit score at 680 or above? Are your monthly debts no more than a third of your gross monthly income? Finally, estimate your home equity to see that it’s at least 15%. Some lenders allow you to prequalify online.
Step 2. Compare Lenders
When searching for the best HELOC rates in Oregon, compare offers from multiple lenders. Consider their interest rates. But also look at qualification requirements, loan limits, fees, and the length of draw and repayment periods. Try to spot the lenders that have the best scenario for your needs.
Step 3: Gather Your Documents
Make sure that you have all the documents you need for your HELOC application close at hand. These typically include proof of income, including recent pay stubs and your most recent W-2. Keep your employment history handy, along with home insurance documents, bank statements, and your most recent tax filing.
Step 4: Submit Your Application
Double-check all the information and be sure you’ve filled in every blank, because errors and omissions slow the application process. Then submit your application. This can generally be accomplished online, although some lenders work over the phone or in person.
Step 5: Get an Appraisal
A home appraisal is usually needed in the HELOC application process. The lender will let you know what is necessary. Schedule the visit promptly (if one is required) because delays will cause the application process to grind to a halt. The appraisal serves the purpose of determining the maximum amount you can borrow, which is based on your home’s value and the equity you have in it.
Step 6: Prepare for Closing
Wait for the HELOC approval. Then, before you can access the funds, you will need to sign documents and pay any required fees. Some lenders make funds available in as little as three days following the finalizing of the HELOC agreement.
Tax Benefits and Considerations
Homeowners can deduct HELOC interest if the borrowed funds are used for buying, building, or significantly improving their primary residence. The deduction is limited to interest on the first $375,000 of the principal for individual taxpayers ($750,000 for married couples who file jointly). A tax advisor can help you navigate the specific tax implications and confirm eligibility for this deduction.
Closing Costs and Fees
HELOC closing costs are lower than typical home-buying or refinancing costs. An appraisal fee of $300 to $500 is usually the highest expense. Other costs include application, origination, and administrative fees. Some lenders charge annual maintenance, transaction, inactivity, or early termination fees. Understanding these costs can help you weigh the pros and cons of different HELOC offers.
Alternatives to HELOCs
There are other ways besides HELOCs to borrow money, of course. You might want to consider one or more of these options, so it pays to be familiar with them before you borrow.
Home Equity Loan
This borrowing option is often confused with a HELOC, so it’s important to understand what is a home equity loan and how it’s different from a HELOC. Unlike HELOCs, home equity loans provide a lump sum amount and are paid back at a fixed interest rate. Borrowers can usually access up to 85% of the equity built in their home through a home equity loan (as opposed to 90% with a HELOC).
Here’s a quick look at HELOCs vs. home equity loans:
| 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; 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 |
Cash-Out Refinance
Homeowners can get cash by undertaking a mortgage refinance for more than they owe. This option offers a large lump sum. But if you have a low mortgage rate with your current home loan, it may not make sense — you’ll need to run the numbers to see how both your monthly payments and your total interest paid would change with a new loan. Another factor to consider in the cash-out refinance vs. home equity line of credit: A HELOC will leave you with a second payment each month. A cash-out refi means you’ll have one payment.
Personal Loan
A personal loan is a flexible, typically unsecured loan that you pay back in regular, fixed payments over a set term of 2 to 7 years. Personal loans can be used for various purposes, including home improvements, debt consolidation, and other expenses. It’s important to understand that a personal loan, because it is not secured by your home, may have a higher interest rate than a HELOC or home equity loan. Some borrowers are willing to pay that because they prefer not to use their home as collateral.
Credit Cards
Credit cards typically come with higher interest rates than HELOCs, which can make them much more expensive if you carry a large balance from month to month. While credit cards offer flexibility for smaller purchases, types of HELOCs or home equity loans may be better suited for larger expenses such as home improvements or debt consolidation.
The Takeaway
HELOCs available in the state of Oregon come with competitive interest rates and flexible repayment terms, making them an attractive option for homeowners seeking to leverage their home equity. By comparing Oregon HELOC rates offered by various lenders, you can secure the most advantageous deal that aligns with your specific financial requirements and objectives.
SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.
Unlock your home’s value with a home equity line of credit brokered by SoFi.
FAQ
What’s the monthly payment on a $50,000 HELOC?
With an 8.00% interest rate and a 10-year term, your monthly payment will be about $607. But how much you’ll pay will be based on your specific interest rate and loan term. If you had the same 8.00% interest rate but repaid what you borrowed with interest over a 20-year term, it would cost $418 per month, although you would pay more total interest with the 20-year term.
Is a HELOC a good idea right now?
Whether a HELOC is a smart move depends on your finances and goals. HELOCs can be useful for home improvements, debt consolidation, and other large expenses. However, it’s important to think through the interest rates, fees, and potential impact on your home equity before making a decision. (Owing money on a HELOC will eat into your equity until you have repaid what you borrow.)
What is the monthly payment on a $100,000 HELOC?
The monthly payment on a $100,000 HELOC depends on the interest rate and how long a term you’ve chosen. At a 6.00% interest rate over 20 years, the payment would be $716 per month. Repaying it at a 7.50% interest over 20 years would cost $806 a month. An interest rate of 8.00% and the same 20-year term means a payment of $836.
What are the benefits of a HELOC?
A HELOC is a flexible way to borrow. Rather than withdraw a lump-sum loan, you can borrow in increments as you need funds, and at a rate that is typically lower than you would get with a credit card. Best of all, you only pay interest on what you have actually borrowed.
Do you need an appraisal for a HELOC?
Yes, an appraisal is a crucial step in the process of obtaining a HELOC, as it helps to establish the value of your home, which in turn determines the amount you can borrow. Lenders want to make sure your loan is secured by adequate equity in your home. Your lender will provide details about the appraisal process.
What disqualifies you from getting a home equity loan?
There are a few factors that can disqualify you from getting a home equity loan, including bad credit, not enough equity in your home, and a high level of debt relative to your income.
How difficult is it to get a HELOC?
Assuming you can meet lenders’ requirements of a healthy credit score and debt levels, and you have a minimum of 15% home equity, it shouldn’t be too challenging to get a HELOC. The hardest part for many would-be borrowers is compiling the financial documents needed for the application. But taking the time to do that with care will help move the application process along more quickly.
Does HELOC affect credit score?
When you apply for a HELOC, the lender will perform a hard inquiry on your credit report, which could cause a temporary dip in your credit score. Carrying a large balance on your HELOC could negatively impact your credit utilization ratio and lower your credit score. But making regular payments toward your HELOC will show you can use credit responsibly and that should reflect favorably on your score.
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.
SOHL-Q424-047
More HELOC resources.
-
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.
Student Loan Forgiveness: Programs for Relief and Forgiveness
Student Loan Forgiveness: Programs for Relief and Forgiveness
By Nancy Bilyeau
Key Points
• The Biden administration has approved $175 billion in student debt relief for nearly 5 million borrowers, with an average of $35,000 forgiven per person.
• The SAVE program, an income-driven repayment plan, is paused due to legal challenges and won’t resume until at least April 2025.
• Public Service Loan Forgiveness (PSLF) continues to provide debt relief for government and nonprofit workers who meet eligibility criteria.
• Other forgiveness options exist for teachers, nurses, doctors, lawyers, and military personnel, as well as state-based repayment assistance programs.
• Student loan forgiveness scams are common—beware of offers that demand upfront fees, promise immediate cancellation, or request personal financial details.
March 2025: The SAVE Plan is no longer available after a federal court blocked its implementation in February 2025. Applications for other income-driven repayment plans and for loan consolidation are also on hold. We will update this page as more information becomes available.
If you are repaying a federal student loan, you naturally have a burning interest in the latest news on forgiveness programs available for those loans. Forgiveness for federal student loans has existed for over a decade, but over the last four years, the debt amounts canceled have soared and new paths to student-debt forgiveness have opened up.
During his administration, Joe Biden approved $175 billion in student debt relief for nearly 5 million Americans, each of whom has been approved for roughly $35,000 in student debt cancellation. On Dec. 20th, President Biden announced a new batch of debt forgiveness for ”another 55,000 public service workers.”
However, there have been considerable headwinds facing student loan debt forgiveness. In the summer of 2024, one of the most popular new forgiveness plans, Saving on a Valuable Education (SAVE), was paused due to court challenges. To compensate, two income-driven programs reopened for applications in December: Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR).
Read on to learn where things stand with programs for relief and forgiveness of federal student loans for the 43 million Americans making payments on those loans.
Student Loan Forgiveness: A Brief History
All payments on federal student loans were paused in March 2020 because of the impact of COVID-19 shutdowns. After multiple extensions of the pause, President Biden ended the suspension and payments resumed in October 2023.
To deliver relief for struggling borrowers, President Biden announced a proposal to cancel up to $20,000 in federal student loan debt for those who met household income requirements. However, this proposal was struck down by the Supreme Court on June 30, 2023.
The same day that the Supreme Court announced its ruling, President Biden released news on three new initiatives for debt relief. Each of them proposed big changes for people paying back their federal student loans:
The SAVE plan
The new income-driven repayment program called the SAVE Plan calculates your monthly payment amount based on your income and family size. The plan offers greater benefits than other, existing income-driven plans. In January 2024, President Biden announced that beginning in February, people who took out less than $12,000 in federal student loans and have been in repayment for 10 years would get their remaining student debt canceled immediately.
Where things stand: The SAVE program is in limbo until at least April 2025 while the federal courts decide if Biden’s program is legal. During that time, the 8 million people enrolled in SAVE are in forbearance.
The On-Ramp Program
The On-Ramp Program was a temporary period, from September 2023 to September 2024, designed to prevent the worst consequences of missed, late, or partial payments. If payments on federal student loans were not made during this time period, they were not submitted as delinquent to credit-score agencies. However, payments were still due, and interest continued to add up.
Where things stand: On September 30, 2024, the On-Ramp program ended, and missing and late payments once more count against a borrower’s credit history.
Proposed New Federal Student Loan Relief Programs
Another initiative, sometimes called Plan B, proposed to target borrowers who:
• Have balances greater than what they originally borrowed
• Have loans that first entered repayment decades ago
• Attended college programs that did not provide sufficient financial value
• Are eligible for relief under programs like income-driven repayment but have not applied
• Have experienced financial hardship that the current student loan system does not adequately address.
Where things stand: On Dec. 20th, 2024, the White House announced it was no longer pursuing this path to debt cancellation because the administration had run out of time.
What follows is an explanation of what forgiveness programs still exist.
What Is Student Loan Forgiveness?
Forgiveness of your loan means that you are no longer required to repay some or all of that student loan. In this context, “forgiveness” means absolving or giving up all claims on account of debt, loan, obligation, or another claim.
Before 2020, student loan forgiveness was connected to your type of job (public-service careers were targeted), how long you had made qualifying payments, and sometimes which populations you served.
The Covid-19-related pause on payments that lasted from March 2020 to October 2023 was the first time that financial hardship because of an economic crisis resulted in people being released from their federal student loans.
💡 Quick Tip: Enjoy no hidden fees and special member benefits when you refinance student loans with SoFi.
Types of Student Loan Forgiveness
Student Loan Forgiveness for Government & Nonprofit Workers
President Joe Biden said it was a DOE priority to focus on helping student loan borrowers who have worked at a nonprofit, in the military, or in federal, state, tribal, or local government.
The government has been offering forgiveness on student loan debt held by people whose jobs serve the public for a number of years. However, many criticized these existing programs as too hard to understand and qualify for, and subsequently few people took advantage. The Biden Administration made efforts to “cut the red tape” and strengthen this type of forgiveness.
Public Service Loan Forgiveness (PSLF)
If you have worked full time in public service (federal, state, local, tribal government or a non-profit organization) for 10 years or more, you may be eligible to have all your student debt canceled.
Designed to steer people toward careers that help the public but might not pay a high salary, the Public Service Loan Forgiveness (PSLF) program cancels (or “forgives”) federal student loan debt for people holding certain public and nonprofit jobs after they have worked in these careers for a number of years.
On Dec. 20th, 2024, the White House announced the approval of $4.28 billion in additional student loan relief for 54,900 borrowers across the country who work in public service. “This relief — which is the result of fixes that the Biden Administration has made to the PSLF program — brings the total loan forgiveness by the administration to approximately $180 billion for nearly 5 million Americans, including $78 billion for 1,062,870 borrowers through PSLF.
Eligibility
Any U.S. federal, state, local, or tribal government agency is considered a government employer for the PSLF Program. This includes employers such as the U.S. military, public elementary and secondary schools, public colleges and universities, public child and family service agencies, and special governmental districts (including entities such as public transportation, water, bridge district, or housing authorities).
You can find out if you are eligible by using the PSLF Help Tool on the government website. It will help you learn what the next steps are if you qualify.
Requirements
To proceed with PSLF, you need to:
• Be employed by a U.S. federal, state, local, or tribal government or qualifying not-for-profit organization (federal service includes U.S. military service);
• Work full time for that agency or organization;
• Have Direct Loans (or consolidate other federal student loans into a Direct Loan);
• Be signed up to repay your loans under an income-driven repayment plan or a a 10-year Standard Repayment Plan; and
• Make a total of 120 qualifying monthly payments that need not be consecutive.
Federal Perkins Loan Cancellation
A Federal Perkins Loan delivered need-based aid to college students as part of the Federal Direct Student Loan Program. It ended in 2017, but Perkins loan forgiveness programs are available.
Perkins loan holders who work in a public service position, such as teacher, nurse, or firefighter, can have their student debt partially or fully erased after working in these approved public service jobs for five years and making qualifying payments.
Eligibility
You qualify for cancellation of up to 100% of a Federal Perkins Loan if you have served full time in a public or nonprofit elementary or secondary school system as a:
• Teacher in a school serving students from low-income families;
• Special education teacher, including teachers of infants, toddlers, children, or youth with disabilities; or
• Teacher in the fields of mathematics, science, foreign languages, or bilingual education, or in any other field of expertise determined by a state education agency to have a shortage of qualified teachers in that state.
Requirements
The cancellation rate per completed academic year of full-time teaching or for each year of otherwise qualifying full-time service is:
• 15% of the original principal loan amount for each of the first and second years;
• 20% of the original principal loan amount for each of the third and fourth years; and
• 30% of the original principal loan amount for the fifth year
Application Process
Application for cancellation or discharge of a Perkins Loan must be made to the school that made the loan or to the school’s Perkins Loan servicer, according to studentaid.gov. The school or its servicer can provide forms and instructions specific to your type of cancellation or discharge.
Student Loan Forgiveness for Teachers
While the PSLF offers forgiveness for teachers, there is another program, Teacher Loan Forgiveness, that helps people repay their federal loans. Note: Borrowers usually can’t receive credit toward Teacher Loan Forgiveness and PSLF for the same period.
Teacher Loan Forgiveness
Highly qualified teachers may be able to get forgiveness of up to $17,500 on their Direct Subsidized and Unsubsidized Loans and their Federal Stafford Loan.
Eligibility
Under this program, if you teach full-time for five complete and consecutive academic years in a low-income school or educational service agency and meet other qualifications, you may be eligible for forgiveness.
Requirements
To be a “highly qualified teacher,” you must have
• attained at least a bachelor’s degree;
• received full state certification as a teacher; and
• not had certification or licensure requirements waived on an emergency, temporary, or provisional basis.
You’re considered to have received full state certification even if you received your certification through alternative routes to certification or bypassing the state teacher licensing examination.
If you’re a teacher at a public charter school, you are considered to have received full state certification as a teacher if you meet the requirements set forth in the state’s public charter school law.
Application Process
You apply for this forgiveness by submitting a completed Teacher Loan Forgiveness Application to your loan servicer after you’ve completed five consecutive years of qualifying teaching.
Student Loan Repayment Assistance Programs for Teachers
Some states also offer repayment programs for teachers. Among examples: The state of Tennessee has loan forgiveness for math and science teachers and Oklahoma has a Teacher Shortage Employment Incentive Program.
The American Federation of Teachers’ database will let you see if your state or local government offers separate forgiveness options.
Student Loan Forgiveness for Nurses
Nurses can pursue different programs for forgiveness of their student loans.
NURSE Corps Loan Repayment Program
Loan repayment is available to registered nurses (RN), nurse faculty (NF), and advanced practice registered nurses (APRN) through the Nurse Corps Loan Repayment Program. The program gives funding preference to those who need the most help financially.
Eligibility
To be eligible, you must have received your nursing education from an accredited school of nursing located in a U.S. state or territory. And you must work full time in an eligible Critical Shortage Facility (CSF) in a high-need area.
Requirements
If your application is accepted, you will receive 60% of your total outstanding, qualifying, nursing education loans over the course of two years. After your two-year service contract, you may be eligible for a third year and an additional 25% of your loans.
These funds are not exempt from federal income and employment taxes.
Application Process
Applications for the program can be found on the Nurse Corps website.
Student Loan Repayment Assistance for Nurses
In addition to the Nurse Corps Loan Repayment Program, loan holders can investigate the National Health Service Corps Loan Repayment Program (NHSC LRP), another student loan forgiveness option offered through the Health Resources and Services Administration.
Full-time nurse practitioners, psychiatric nurse specialists, and nurse-midwives may be able to cancel up to $50,000 of both federal and private student loan debt through the program. Part-time nurse practitioners and nurse-midwives may receive up to $25,000 in loan forgiveness.
In exchange for loan forgiveness, you must commit to at least two years of service at an NHSC-approved facility.
Student Loan Forgiveness for Doctors & Health Care Professionals
Medical professionals and healthcare workers have access to some respected student loan forgiveness programs. Their role during the pandemic as frontline workers made helping them with their loans a priority. Some of these programs forgive loans, while others provide money to student loan borrowers in the form of a loan repayment program.
Among the programs that help healthcare workers with their loans are Public Service Loan Forgiveness (PSLF), the Perkins Loan Cancellation, and the NIH loan repayment programs (LRPs).
National Health Service Corps (NHSC) Loan Repayment Assistance
Nurses are one category of worker getting student loan forgiveness from NHSC. Licensed primary-care clinicians in eligible disciplines can also receive loan repayment assistance through the NHSC Loan Repayment Program (NHSC LRP).
In exchange for loan repayment, you must serve at least two years of service at an NHSC-approved site in a Health Professional Shortage Area (HPSA).
Student Loan Forgiveness for Lawyers
With the hefty tuition bills they shoulder, lawyers would be understandably delighted to discover they qualify for student loan forgiveness.
One path to just that is Public Service Loan Forgiveness (PSLF), which provides tax-free forgiveness on federal direct loans to borrowers who work for public-service employers. As a lawyer, that means working full time for a government entity or a 501(c)(3) nonprofit.
Perkins loan forgiveness is another path for full-time public or community defenders who can have 100% of these loans forgiven over five years of service.
Many states provide assistance to lawyers focused on public service.
Military Student Loan Forgiveness and Assistance
Members of the Armed Forces may qualify for forgiveness of the remaining balance of their Federal Direct Loans through Public Service Loan Forgiveness (PSLF).
In addition, while you are on active duty, the government can waive many of the documentation requirements attached to federal student loan benefits. For example, if you are on an income-driven repayment plan and military service prevents you from providing updated information on your family size and income, you can request to have your monthly payment amount maintained.
Student Loan Forgiveness for Volunteers
If you are a Peace Corps or AmeriCorps volunteer, you may qualify for loan forgiveness. AmeriCorps Volunteers in Service to America focuses on alleviating poverty through partnerships with government agencies and nonprofit organizations. Participants in AmeriCorps VISTA, who perform tasks such as fundraising and grant writing, must commit to a one-year term of full-time service and may serve for up to five years in total.
After completing their service requirement, volunteers are eligible for the Segal Education Award or a cash stipend of $1,800, in which case the volunteer also may be eligible for up to 15% cancellation of certain kinds of student loans.
Student Loan Repayment Assistance from your Employer
Many employers subsidize their workers’ repayment of student loans as a benefit. The Internal Revenue Service says that in most cases, educational benefits are excluded from federal income tax withholding, Social Security tax, Medicare tax, and federal employment (FUTA) tax.
By law, tax-free benefits under an educational assistance program are limited to $5,250 per employee per year. Such policies serve as an incentive to keep valued employees. Ask your manager if they have a student loan repayment benefit.
💡 Quick Tip: Refinancing could be a great choice for working graduates who have higher-interest graduate PLUS loans, Direct Unsubsidized Loans, and/or private loans.
Student Loan Forgiveness by Federal Repayment Plan
Many federal student loan holders are eligible for an income-driven repayment plan at some point. An income-driven plan sets your monthly student loan payment at an amount that is intended to be affordable based on your income and family size. And borrowers who continue to qualify for an income-driven repayment plan and make their payments may eventually see their remaining loan balances be forgiven.
These options have changed in the last two years, but there are still ways to apply for an income-driven repayment plan.
The SAVE Plan
The SAVE Plan was put on pause because of a court challenge and is expected to remain in limbo until at least April 2025, the DOE says. During this time, SAVE enrollees do not make payments — the accounts are in forbearance. You can still apply for SAVE, but if you are accepted, your payments immediately go into forbearance.
When and if it is operating again, the SAVE Plan offers greater benefits than any other IDR plans. It could cut in half monthly payments for many borrowers with undergraduate loans, help some reach loan forgiveness more quickly, and cancel remaining debt for those who owe less than $12,000 and have made payments for at least 10 years.
Features to keep in mind:
• The SAVE Plan is an IDR plan, so it bases your monthly payment on your income and family size.
• The SAVE Plan lowers payments for almost all people compared to other IDR plans because your payments are based on a smaller portion of your adjusted gross income (AGI).
• The SAVE Plan has an interest benefit: If you make your full monthly payment, but it is not enough to cover the accrued monthly interest, the government covers the rest of the interest that accrued that month. This means that the SAVE Plan prevents your balance from growing due to unpaid interest.
• Loan balances will be forgiven for borrowers who have made payments under the plan for a certain period of time. If your loan balance is under $12,000, your balance will be forgiven if you’ve made 10 years of payments.
Two Income-Based Repayment Plans Reopened for Application
On Dec. 18th, 2024, the Department of Education announced that two forgiveness plans that had been retired because of SAVE would now reopen for applications. Why? Because SAVE going into forbearance means that those loan holders cannot make payments that count toward eventual cancellation of their loan. This is especially important for people who are trying to get their loans forgiven through PSLF. SAVE participants can consider switching to one of these plans or stick with SAVE and wait for the forbearance to end.
On the DOE website, a further explanation follows: “The Pay As You Earn (PAYE) Repayment and Income-Contingent Repayment (ICR) plans offer credit for Public Service Loan Forgiveness (PSLF) and income-driven repayment (IDR) to eligible borrowers enrolled in the currently enjoined Saving on a Valuable Education (SAVE) Plan, as well as additional terms that borrowers may wish to consider.”
Forgiveness With the PAYE Plan
The Pay As You Earn (PAYE) Plan is a repayment plan with monthly payments that are generally equal to 10% of your discretionary income, divided by 12, but never more than the 10-year Standard Repayment amount.
Eligibility
Your eligibility for PAYE depends on when you took out federal student loans. There are three parts to the “new borrower” requirement; and you must meet all three parts:
• First, you must have had no outstanding balance on a Direct Loan or Federal Family Education Loan (FFEL) Program loan when you received a Direct Loan or FFEL Program loan on or after Oct. 1, 2007.
• Second, you must have received (a) disbursement of a Direct Subsidized Loan, a Direct Unsubsidized Loan, or a Direct PLUS Loan for students on or after Oct. 1, 2011; or (b) a Direct Consolidation Loan based on an application that was received on or after Oct. 1, 2011.
Forgiveness with Income-Contingent Repayment (ICR)
Any borrower with eligible federal student loans can make payments under the Income-Contingency Repayment plan. ICR provides $0 payments for single individuals earning up to $15,060 ($31,200 for a family of four) and 20% of income above that amount. It also has an alternative payment formula that may result in lower payments for borrowers whose loan debt is low relative to their income.
This plan is the only available income-driven repayment option for parent PLUS loan borrowers. Although PLUS loans made to parents can’t be repaid under any of the income-driven repayment plans, parent borrowers may consolidate their Direct PLUS Loans or Federal PLUS Loans into a Direct Consolidation Loan and then repay the new consolidation loan under the ICR Plan (though not under any other income-driven plan).
Note: ICR may cost more each month than any of the other income-driven repayment plans. It caps payments at 20% of your discretionary income and lasts 25 years.
Student Loan Discharge for Special Circumstances
If you’re no longer required to make payments on your loans due to other circumstances, such as a total and permanent disability or the closure of the school where you received your loans, this is called discharge.
On Oct. 4, President Biden announced that the government was forgiving $1.2 billion for nearly 22,000 borrowers who have a total or permanent disability and have been identified and approved for discharge through a data match with the Social Security Administration.
The president also announced $22.5 billion for more than 1.3 million borrowers who were cheated by their schools, saw their institutions precipitously close, or are covered by related court settlements.
State-based Student Loan Repayment Assistance Programs (LRAPs)
Along with the student loan forgiveness options provided by the federal government — which are available to anyone anywhere in the U.S. — individual states have their own debt cancellation programs.
As of January 2024, all 50 states and the District of Columbia offered at least one student loan forgiveness program.
More information is available in the states themselves.
Student Loan Forgiveness for Private Education Debt
Most lenders of private student loans do not offer forgiveness for debt owed.
The exceptions are permanent disability and death. However, in some cases, the debt may be inherited by the surviving spouse or by a cosigner. It’s important to check your policy.
Some lenders do make individual arrangements if you contact them and make a case for severe reduction of income. Reach out to your lender to find out if any accommodation can be made or if refinancing would help.
What About Taxes on Student Loan Forgiveness?
The Internal Revenue Service considers canceled debt, including most forms of student loan debt forgiveness or student loan discharge, to be taxable income.
Fortunately, borrowers working toward loan forgiveness have been exempt from taxes thanks to the American Rescue Plan Act of 2021. This measure made forgiven student loans exempt from federal income taxes, but only for loans discharged between January 1, 2021, and December 31, 2022.
Also, student loan amounts forgiven under PSLF are not considered income for tax purposes. You won’t be taxed by the federal government, but your state may tax you. The DOE says on its website: “Any debt forgiven as a result of PSLF won’t create a federal tax liability for you.”
Various states have different policies about whether to tax forgiven student loan debt.
If you have debt forgiven, please contact an accountant to see what the consequences are for your tax return.
Student Loan Forgiveness Scams
Unfortunately, student loan forgiveness scams exist. Clues are when they promise immediate forgiveness, say the programs are “first-come, first serve,” ask for a fee to process your payment, or solicit you asking for bank or identity information upfront.
The Takeaway
The Biden Administration approved $175 billion in student debt relief for nearly 5 million Americans, each of whom have been approved for an average of roughly $35,000 in student debt cancellation. However, the SAVE program, an income-based repayment program chosen by over 8 million, is on hold until at least April 2025 because of court challenges. Other options do exist for federal loan repayment based on what you can pay. There are likely to be many more changes in debt relief and forgiveness in 2025, so it’s important to follow the news on student loan repayment.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
Student Loan Forgiveness FAQ
Is there a legitimate student loan forgiveness program?
The U.S. Department of Education offers several legitimate programs that can reduce or eliminate federal student loan debt.
What qualifies you for student loan forgiveness?
For the student loan forgiveness programs that have existed for several years, like Public Service Loan Forgiveness, eligibility is based on the type of federal student loan you received, your income, and your chosen career. Only federal student loans are eligible for forgiveness.
How do I apply for student loan forgiveness?
Most forgiveness for student loans can be pursued through the federal Department of Education. Other forgiveness programs are available through your state. Also, some employers subsidize their workers’ student loans.
SoFi Student Loan Refinance SoFi Loan Products
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).
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.
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.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
SOSLR-Q424-034
Current HELOC Rates in New York Today
NEW YORK HELOC RATES TODAY
Current HELOC rates in
New York.
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 HELOC rates in New York.
Key Points
• Home equity line of credit (HELOC) rates in New York can vary based on factors like credit score and home equity.
• Understanding the fundamentals of a HELOC can help borrowers make well-informed decisions about New York HELOC rates.
• Compare offers from multiple lenders to find the best home equity line of credit rates in New York.
• The amount you can borrow with a HELOC depends on your home’s value and outstanding mortgage.
• HELOCs have two phases: the draw period and the repayment period, each with different payment requirements.
Introduction to HELOC Rates
A HELOCis a versatile financial tool that allows homeowners to tap into the equity they’ve built up in their home. But before you sign on to a home equity line of credit, it’s important to understand exactly how a HELOC works, and how its all-important interest rate will be determined. That way you can put your financial house in order before you apply and garner the best available HELOC rate in New York.
What Is a HELOC?
A HELOC is a revolving credit line with a ceiling based on your home equity. You don’t have to borrow the entire amount of the credit line all at once; you can borrow as you need to, and (one advantage of a HELOC) you’ll only pay interest on the amount of the credit line that you actually use. You may be able to borrow up to 90% of your home’s value, minus your mortgage.
HELOC interest rates are usually variable, and so the monthly cost of a HELOC can go up or down based on the amount of the credit line that you are using and your variable rate. But initial rates on a HELOC are often lower than those for credit cards or personal loans, since your home serves as collateral.
A HELOC has two phases: the draw period and the repayment period.
The Draw Period
During the HELOC’s draw period (usually 10 years), you can access funds up to your credit limit, make payments to pay down your balance, and borrow the money again. The borrower is usually required to make interest payments during the draw period, but payments toward the principal may be optional.
The Repayment Period
During the 10- to 20-year repayment period, you’ll pay back the principal with interest. Interest rate fluctuations mean that monthly payment amounts may be somewhat unpredictable. Foreclosure is the main risk if you default. Using a HELOC repayment calculator can help you manage payments or estimate how they will change if your variable interest rate shifts.
Where Do HELOC Interest Rates Come From?
Lenders base HELOC rates on their prime rate, which is the interest rate offered to customers deemed to be at least risk of default. They then adjust that rate according to an individual borrower’s financial profile. The prime rate, in turn, is influenced by Federal Reserve rates. Understanding these factors may help would-be borrowers anticipate rate changes and make an informed decision about when to apply for a HELOC.
How Interest Rates Impact HELOC Affordability
As you may have noticed when you bought your home and took out a home loan, your interest rate can make a big difference in the affordability of a loan. The same is true for a HELOC. Over the course of a HELOC with a 10-year draw and a 20-year repayment term, a 1% difference in interest rate can result in thousands — or even tens of thousands — of additional interest over the life of the loan. By looking at this example of a $50,000 HELOC repaid over 20 years at three different interest rates, you can better understand the importance of interest rates:
• At 6.00%: monthly payment $358, total interest paid $35,972
• At 7.00%: monthly payment $388, total interest paid $43,036
• At 8.00%: monthly payment $418, total interest paid $50,373
HELOC Interest Rate Trends
Fluctuations in the prime interest rate are especially relevant to borrowers with a HELOC, due to the HELOC’s variable rates. It’s impossible to predict exactly where the rate will go, but looking at average prime rates in recent years will give you a sense of how widely they tend to swing. The average prime rate reached a low of 3.25% in 2020 and a high of 8.50% in 2023, as you can see in the chart below. And over the last half-century, rates as low as 2020’s have been rare.
Historical Prime Interest Rate
| Date | U.S. 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 | 5.5% |
| 9/27/2018 | 5.25% |
Source: U.S. Federal Reserve
Historical U.S. Prime Rates
Factors Influencing HELOC Rates
The prime rate is important, but it’s not the only factor that will determine what rate you are offered for a HELOC in New York. Rates offered to individual applicants are significantly influenced by several key factors, including the borrower’s home equity, credit score, income stability, and combined loan-to-value (CLTV) ratio. These are things you have some control over (unlike the movements of the Federal Reserve), so it’s worth examining them closely.
Home Equity
Having substantial equity in your home makes you appear less risky to lenders, which can lead to lower interest rates. Homeowners typically need at least 15% equity in their property to qualify for a HELOC.
Credit Score
Maintaining a credit score of 680 or higher is of paramount importance when you’re applying for a HELOC. Some lenders prefer a credit score of 700 or above. A higher credit score is a reliable indicator of lower risk, improving your likelihood of qualifying for the best available terms on your home equity line of credit.
Stable Income
Lenders will assess your income to make an informed judgment regarding your ability to repay the HELOC. A consistent and stable income equals a lower risk of default where a lender is concerned.
Loan-to-Value Ratio
Lenders often require a combined loan-to-value ratio of 90% or less. This ratio is key in determining your credit limit. For example, if your home is worth $500,000, your mortgage balance is $300,000, and your HELOC balance is $100,000, your CLTV ratio is 80% (300,000 + 100,000 / 500,000 = .80).
Variable vs Fixed Interest Rates
As noted above, HELOCs are characterized by variable interest rates that are subject to change over the course of the loan period. Initially, these rates are typically lower than traditional fixed rates, but they can fluctuate in either direction based on prevailing market conditions. This is one way that HELOCs differ from home equity loans. The latter are usually fixed-rate loans.
Tools & Calculators
Online tools can help you estimate your payments, understand interest rates, and compare borrowing methods. Take advantage of these resources to make informed decisions regarding your home equity financing options.
Run the numbers on your HELOC.
-
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.
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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.
How to Qualify for a Competitive HELOC Rate
There are a few steps you’ll want to take before applying for a HELOC to better your chances of getting a favorable rate.
Care for Your Credit Score
By consistently making timely payments and diligently reducing credit card balances, you can significantly improve your credit score if it isn’t already comfortably above 700. A higher credit score makes you a more attractive candidate for favorable terms on your HELOC and could lead to substantial savings. One more to-do: Check your credit report for inaccuracies and clear up any you find.
Assess Your Home Equity
Regular mortgage payments have helped you build equity — but how much? Subtract what you owe on your mortgage from your home’s estimated value (use a real estate site to find that estimate) then divide the answer by your home’s estimated value to arrive at a percentage of equity. Ideally, it’s greater than 20%.
Calculate Your Debt-to-Income Ratio (DTI)
Your DTI ratio is how much you owe in monthly debt payments divided by your gross monthly income. Home equity may allow a DTI below 50%, but the lower your DTI, the better and some lenders prefer 36% or below. A lower DTI can help you secure better terms on your HELOC.
Application Process for a HELOC in New York
The application process for a HELOC in New York, as anywhere, will involve divulging lots of financial details, so it’s best to approach it in an organized fashion. Follow this guide.
Step 1. Run the Numbers
Before applying for a HELOC, make sure your stats will work in your favor. Check your credit scores. Are you at 680 or above? Calculate your DTI ratio. Are your monthly debts no more than half your gross monthly income? Finally, estimate your home equity to see that it’s at least 15%. Some lenders allow you to prequalify online, which may speed your process.
Step 2. Compare Lenders
When searching for the best New York HELOC rates, compare offers from multiple lenders. Consider their posted interest rates. Look at qualification requirements, loan limits, fees, and the length of draw and repayment periods. Try to zero in on the lenders that have the best scenario for your needs.
Step 3: Gather Your Documents
Make certain that you have all the necessary documents prepared and ready for your HELOC application. These typically include proof of income including recent pay stubs and your most recent W-2. Keep your employment history handy, along with home insurance documents, bank statements, and your most recent tax filing.
Step 4: Submit Your Application
Check all the information twice and make sure you’ve filled in every blank, because errors and omissions will slow your application process. Then submit your application. This can generally be accomplished online, although some lenders work over the phone or in person.
Step 5: Get an Appraisal
A home appraisal is usually a must for securing a HELOC. The lender will let you know what is necessary. Schedule the visit promptly (if one is required) because delays will cause the application process to grind to a halt. The appraisal serves the purpose of determining the maximum amount you can borrow, which is based on your home’s value and the equity you have in it.
Step 6: Prepare for Closing
Wait for the HELOC approval. Then, before you can access the funds, you will need to sign documents and pay any required fees. Some lenders make funds available in as little as three days following the finalizing of the HELOC agreement.
Tax Benefits and Considerations
Homeowners can deduct HELOC interest if the funds are used to buy, build, or significantly improve their primary residence. The deduction is limited to interest on the first $375,000 of the mortgage principal for individual taxpayers ($750,000 for married couples filing jointly). Consult a tax advisor to navigate this process, as you will have to itemize on your return in order to take advantage of this deduction.
Closing Costs and Fees
HELOC closing costs are lower than home-buying or refinancing costs. The appraisal fee, usually the highest expense, ranges from $300 to $600. Other charges may include application, loan origination, and administrative fees. Some lenders also have annual maintenance, transaction, inactivity, or early termination fees. Lenders who waive costs often charge a higher interest rate — do the math to make sure waiving costs will actually help you come out ahead.
Alternatives to HELOCs
In addition to home equity lines of credit, there are different types of home equity loans — or rather, ways to get equity out of your home — to consider, as well as borrowing options that don’t involve your home equity. Check them out:
Home Equity Loan
HELOCs and home equity loans are often confused, but they are not the same thing. It’s worth looking at what is a home equity loan, exactly. Unlike HELOCs, home equity loans provide a lump sum amount and are paid back at a fixed interest rate, so your monthly payments will be consistent from Day One.
Do a HELOC vs. home equity loan comparison when making your borrowing decision. Borrowers can usually access up to 85% of the equity built in their home through a home equity loan (as opposed to 90% with a HELOC). Both HELOCs and home equity loans use your home as collateral. And both offer a tax deduction for interest paid if the funds are used to buy, build, or significantly improve your residence.
Do you need a large sum all at one time? A home equity loan may be the way to go. Are you unsure how much money you will need to borrow and when? A HELOC might suit you better. Are you comfortable with the idea of a HELOC’s varying interest rates? Or will that stress you out, in which case you might be more of a home equity loan type.
Cash-Out Refinance
This particular type of mortgage refinance lets homeowners borrow against their home equity, but it results in an entirely new mortgage. Let’s compare a cash-out refinance vs. a home equity line of credit: With a cash-out refi, you’ll get a new mortgage for more than you owe on your current mortgage. You’ll pay off your old mortgage and use the extra funds for whatever you like. You’ll have one monthly payment to make (as opposed to two if you set up a HELOC or home equity loan). Most importantly, a refi will result in a new interest rate. So you’ll want to carefully compute interest charges for your existing mortgage vs. the current rate available for a new mortgage to make sure you don’t lose money.
Personal Loan
A personal loan is an unsecured loan that you repay in regular, fixed payments over a set term, usually ranging from 2 to 7 years. In addition to its shorter repayment period, a personal loan will likely have a higher interest rate than a HELOC or home equity loan. However it does not require you to put your home up as collateral.
Credit Cards
Credit cards typically come with higher interest rates than HELOCs, and carrying a large balance on a credit card from month to month can be pricey.
The Takeaway
HELOCs offer a flexible way to access the equity in your home. A home equity line of credit can be used for various purposes, such as home improvements, debt consolidation, and education expenses. You borrow against it as you need the funds, so you only pay interest on the portion of the credit line that you actually use. To find the best HELOC rates in New York, it’s crucial to compare rates and terms from multiple lenders.
SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.
Unlock your home’s value with a home equity line of credit brokered by SoFi.
FAQ
What is the monthly payment on a $50,000 HELOC?
A HELOC monthly payment calculator will tell you your monthly payment amount based on your interest rate and loan term. But as an example, if you had a 20-year term and a 6.00% interest rate, your monthly payment would be $358. At a 7.00% interest rate, your monthly payment would rise by $30 to $388. A HELOC monthly payment calculator will tell you your monthly payment amount based on your interest rate and loan term. But as an example, if you had a 20-year term and a 6.00% interest rate, your monthly payment would be $358. At a 7.00% interest rate, your monthly payment would rise by $30 to $388.
Is a HELOC a good idea right now?
Whether or not a HELOC is a good idea depends on your goals. A home equity line of credit can be useful for home improvements, debt consolidation, and other expenses. Some borrowers find it reassuring to have the line of credit open even if they aren’t using it. However, it’s important to consider the current interest rates, your monthly budget, and the potential impact on your financial stability.
What is the monthly payment on a $100,000 HELOC?
The monthly payment on a $100,000 HELOC depends on how much of the credit line you are using. But if you have drawn the maximum and are paying it off over a 20-year repayment term, your monthly payment would range from $700 to $900 if your interest rate was between 6.00% and 8.50%.
What are the benefits of a HELOC?
A home equity line of credit (HELOC) offers several benefits, including flexible access to funds, lower interest rates than a credit card, and maybe even a tax deduction if you use the funds for remodeling. One big benefit of a HELOC is that you only pay interest on the amount you borrow.
Do you need an appraisal for a HELOC?
You will probably need an appraisal for a home equity line of credit. The appraisal helps determine the value of your home and how much you can borrow.
What disqualifies you from getting a home equity loan?
Several things can cause a lender to decline to give you a home equity loan. These include a low credit score, home equity below 20%, a high debt-to-income ratio, and unstable income.
How difficult is it to get a HELOC?
How hard it is to get approved for a home equity line of credit depends on your financial status. Lenders consider factors such as your credit score, home equity, debt-to-income ratio, and income stability. If one or more of these is a weak point, you could have trouble.
Does HELOC affect credit score?
Applying for a HELOC may result in a hard inquiry, which can temporarily lower your score. Additionally, using a significant portion of your credit line can increase your credit utilization, potentially impacting your score. However, paying what you owe on your HELOC on time each month can positively impact your credit score over time.
SoFi Mortgages
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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 HELOC 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
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