Current HELOC Rates in Alaska Today
ALASKA HELOC RATES TODAY
Current HELOC rates in
Alaska.
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 Alaska.
Key Points
• HELOC is a revolving credit line with your home as collateral; the amount of your credit line depends on your home’s value and your equity position.
• HELOCs in Alaska have two phases: draw and repayment, with the draw period typically lasting 10 years.
• The repayment period of a HELOC typically lasts 10 to 20 years, during which borrowing ends and the principal is paid back with interest.
• HELOC interest rates in Alaska are influenced by the prime rate and economic factors.
• To secure the best HELOC rates in Alaska, maintain a high credit score, low debt-to-income ratio, and compare offers from multiple lenders.
Introduction to HELOC Rates
If you’re an Alaskan homeowner who’s curious about HELOC interest rates, this guide can help you understand the current landscape and how to secure the best available deal. Learn about the factors influencing these rates, how to compare lender offers, and the steps of the application process. By the end, you’ll not only understand why HELOCs are a popular financial tool, but which type of home equity loan or line of credit is right for your situation and goals.
What Is a HELOC?
First, what is a home equity line of credit? A HELOC is a revolving credit line based on your home equity. HELOCs offer lower interest rates because they’re secured by your home, but they come with the risk of foreclosure if you default. A HELOC has two phases: draw and repayment. Let’s break them down:
The Draw Period
During the HELOC‘s draw period, usually lasting 10 years, you can access funds up to your credit limit. Interest payments are typically required during this period, but principal payments may be optional. If you do make payments to pay down your balance, you can borrow the money again — that’s why it’s called “revolving” credit.
The Repayment Period
The repayment period for a HELOC typically lasts 10 to 20 years. During this phase, borrowing ends, and you must pay back the principal with interest. Interest rates are usually lower because the loan is secured by your home. You only pay interest on the amount borrowed, not the entire credit limit. However, variable interest rates can fluctuate, making repayment unpredictable. Using a HELOC repayment calculator can help you plan for these changes.
Where Do HELOC Interest Rates Come From?
HELOC interest rates are tied to the prime rate and can be influenced by economic and housing market factors. The prime rate is the benchmark interest rate that banks charge their most creditworthy customers. Federal Reserve policy decisions also impact HELOC rates. Understanding these factors can help borrowers anticipate rate fluctuations and make informed decisions about the best time for a HELOC.
How Interest Rates Impact HELOC Affordability
Interest rates play a pivotal role in determining affordability of a HELOC. When the time comes to repay a $60,000 HELOC, having an interest rate of 6.00% over a 20-year term would mean a monthly payment of $430. An interest rate of 7.00% would equal a payment of $465. And over the entire term, the customer with the 7.00% rate would pay an additional $8,477 in interest. The more you borrow and the higher the interest rate, the larger these numbers become.
HELOC Interest Rate Trends
As we’ve noted, HELOC rates in Alaska are closely linked to the prime interest rate. Movements in the prime rate serve as a reliable indicator of the direction of Alaska HELOC rates. By keeping informed about these trends, borrowers are empowered to make well-reasoned financial decisions.
Historical Prime Interest Rate
Since 2018, the prime rate has experienced notable fluctuations, ranging from a low of 3.25% in 2020 to a high of 8.50% in 2023. A thorough examination of historical trends can provide valuable insights into potential future HELOC rates.
| 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
Several other factors influence HELOC rates in Alaska, including a borrower’s home equity position, credit score, income, and loan-to-value (CLTV) ratio. Understanding these factors can significantly enhance your chances of securing more favorable rates. Here they are in more detail.
Home Equity
Home equity is the amount of your home value that you actually own. It’s calculated by subtracting your mortgage balance from the market value of your property. For example, if your home is worth $350,000, and your mortgage balance is $250,000, you have $100,000 in home equity. Homeowners generally need a minimum of 15% equity in their property to qualify for competitive HELOC rates.
Credit Score
Maintaining a high credit score, ideally 680 or higher, is of utmost importance when applying for a HELOC with favorable interest rates. Many lenders prefer a credit score of 700 or above.
Stable Income
The stability of your employment may be just as important as your actual salary level. A steady income stream serves as a reliable indicator of a reduced likelihood of default, potentially resulting in more favorable HELOC rates. Consistent earnings serve as a testament to your financial dependability, a quality that lenders highly value when assessing your application.
Loan-to-Value Ratio
Most lenders require your combined loan-to-value ratio (mortgage balance plus loan amount / appraised home value) to be 90% or less, although some will allow you to borrow 100% of your home’s value. The ratio is a key metric in determining your credit limit. Here’s an example: Let’s say your home value is $500,000. Your mortgage balance is $300,000, and you’re applying for a $100,000 HELOC:
$300,000 + $100,000 = $400,000
$400,000 / $500,000 = 80%
Your combined LTV ratio would be 80%, well within the safety zone.
Variable vs Fixed Interest Rates
HELOCs feature variable interest rates, which are subject to change over the course of the loan period. Initially, variable interest rates tend to be lower compared to fixed rates, but they can fluctuate in either direction based on prevailing market conditions — meaning your monthly costs could go up. Utilizing a HELOC interest calculator can provide valuable insights into how these variations may impact your payments.
Tools & Calculators
Online tools can provide substantial assistance in estimating your payments and gaining a comprehensive understanding of the financial implications associated with your HELOC. A HELOC Interest Only Calculator can tell you how much your payment might be during the draw period.
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 obtain the most competitive HELOC rates in Alaska, homeowners should maintain an excellent credit score, have a low debt-to-income ratio, and demonstrate a consistent and reliable source of income. Additionally, comparing offers from multiple lenders is highly recommended to ensure you secure the best Alaska HELOC rates that align with your specific financial requirements and objectives.
Improve Your Credit Score
Maintaining timely payments and reducing credit card balances can contribute to a robust credit score — a crucial metric in securing more favorable HELOC rates. A higher credit score serves as a strong indicator of financial health, presenting you as a more attractive candidate for obtaining a HELOC.
Assess Your Home Equity
The first step for any HELOC application is to assess your home equity. Regular mortgage payments help in building home equity over time. Home equity can be enhanced through renovations that boost the property’s value. Increased home equity can lead to better terms and higher amounts when applying for a home equity line of credit. A home equity loan calculator can help you calculate your position.
Calculate Your Debt-to-Income Ratio (DTI)
Your debt-to-income (DTI) ratio is calculated by dividing your total monthly debt payments by your gross monthly income. Typically, home equity lenders prefer a DTI below 36%. A lower DTI often indicates financial stability, which is advantageous when applying for a HELOC.
Application Process for a HELOC in Alaska
Applying for a HELOC involves several important steps that require attention, such as reviewing your financial health, comparing interest rates, preparing necessary documents, submitting an application, undergoing a home appraisal, and patiently waiting for approval. By understanding the HELOC process, you can navigate it more effectively and efficiently, ensuring a smoother and more successful experience.
Step 1. Run the Numbers
Check your credit scores, calculate your DTI, and get a good estimate of your home equity before you apply for a HELOC. Some lenders allow borrowers to prequalify for a HELOC online, streamlining the application process.
Step 2. Compare Lenders
See what offers you might qualify for when it comes to interest rates, but also compare their qualification requirements, loan minimums and maximums, fees, the length of the draw and repayment periods they’re offering, and other factors.
Step 3: Gather Your Documents
To apply for a HELOC, you will need personal identification, income verification, and property information. Income documentation often includes recent pay stubs, W-2 forms, and tax returns. If you’re self-employed, lenders may ask for a profit-and-loss statement and two years’ tax returns. Lenders require a homeowners insurance declaration page as part of the property documentation for HELOC loans.
Step 4: Submit Your Application
Submitting your HELOC application can take place online, by phone, or in person. Be sure to double-check that all of the information provided is accurate and complete, as any errors or omissions could result in delays during the processing of your application.
Step 5: Get an Appraisal
After submitting your application, a home appraisal will be conducted to determine the current market value of your property. If the appraised value exceeds your mortgage balance, the lender may approve you for a HELOC.
Step 6: Prepare for Closing
Before accessing your HELOC funds, you must sign loan documents and pay necessary fees. Some lenders are known to make funds available within three days following the closing of the HELOC loans. Make absolutely certain that you completely understand all terms and conditions before you finalize the 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. Interest deductions are limited to the first $375,000 for individual taxpayers ($750,000 for married couples filing jointly). You’ll have to itemize deductions to claim this credit. And you may want to consult a tax advisor to navigate the specific tax implications and confirm eligibility for deductions related to HELOCs.
Closing Costs and Fees
HELOC closing costs are lower than home-buying or mortgage refinance costs. The appraisal fee, usually the highest expense, ranges from $150 to $500. Other costs may include application, origination, and administrative fees. Some lenders charge annual maintenance, transaction, inactivity, or early termination fees. Be aware that many lenders offer to reduce or waive closing costs but may charge a higher interest rate.
Alternatives to HELOCs
There are other ways to get equity out of your home. In addition to home equity lines of credit, other financing alternatives include home equity loans, cash-out refinancing, and personal loans.
Home Equity Loan
What is a home equity loan? 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. This comparison chart may make the HELOC vs home equity loan decision a little clearer:
| 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 refinance their mortgage for more than what they owe and take the difference as cash. This option suits those needing a substantial sum. However, it may come with higher interest rates than traditional refinancing. Compare the cash-out refinance vs a home equity line of credit for an informed decision.
Personal Loan
A personal loan gives borrowers a lump sum of $1,000 to $100,000 that is repaid in equal monthly payments over a set term from 2 to 7 years. Unlike a home loan, personal loans do not necessitate the pledging of collateral, making them an alternative for individuals who lack substantial home equity or other assets that can serve as collateral.
Credit Cards
Credit cards and HELOCs are both forms of revolving debt. Instead of receiving a lump sum of money, you get access to a credit line that you tap as needed. But credit cards often come with higher interest rates compared to HELOCs, which can make them considerably more expensive if you maintain a substantial balance that carries over from month to month.
The Takeaway
A home equity line of credit (HELOC) can be a versatile financial tool for homeowners in Alaska. HELOCs typically provide competitive interest rates and flexible repayment options. However, a HELOC’s variable interest rate means that monthly payments can increase unexpectedly depending on the market. But for homeowners who aren’t sure how much they need for a major project, a HELOC can be used for various purposes, including home improvements and debt consolidation.
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 for a $50,000 HELOC is contingent upon the interest rate and repayment terms. Utilizing a HELOC monthly payment calculator can provide an accurate estimation. As an example, with an 8.50% interest rate and a 10-year term, your monthly payment will be about $620. This also assumes you make interest-only payments through the draw period.
Is a HELOC a good idea right now?
A home equity line of credit can be an advantageous financial option for individuals with a steady income and a strong credit history. It provides versatile solutions for many different needs, including home renovations and debt consolidation. Nevertheless, homeowners should carefully evaluate the prevailing interest rates and their current financial circumstances before making a decision.
What is the monthly payment on a $100,000 HELOC?
The monthly payment on a $100,000 home equity line of credit is influenced by the interest rate and repayment terms. Utilizing a HELOC monthly payment calculator can provide an estimate of this amount. As an example, assuming you draw the full amount, secure an 8.50% interest rate, and choose a 20-year repayment term, your monthly payment should be about $868.
What are the benefits of a HELOC?
A home equity line of credit offers flexible access to funds, competitive interest rates, and potential tax benefits. A HELOC can be utilized for a diverse range of purposes, such as home improvements, educational expenses, and debt consolidation.
Do you need an appraisal for a HELOC?
Yes, an appraisal is generally required to obtain a home equity line of credit. The appraisal serves the purpose of determining the value of your home, which directly impacts the amount of money you are eligible to borrow.
What disqualifies you from getting a home equity loan?
Several factors can disqualify you from securing various types of home equity loans, including an unfavorable credit history, insufficient home equity, and an unstable source of income. When evaluating your application, lenders also place significant emphasis on your debt-to-income ratio and the loan-to-value ratio, as these metrics provide valuable insights into your overall financial stability and ability to manage debt.
How difficult is it to get a HELOC?
The level of difficulty in obtaining a home equity line of credit is contingent upon your financial circumstances. Lenders evaluate various factors, including credit scores, available home equity, and stability of income. By preparing the requisite documentation and acquiring a good understanding of the application process, individuals can significantly enhance their chances of qualifying for a HELOC.
Does HELOC affect credit score?
A home equity line of credit may affect your credit score. Applying for a HELOC may prompt a hard inquiry, which has the potential to temporarily lower your score. Plus, the way in which you manage the HELOC, making payments and maintaining a balance, can impact your credit score either positively or negatively.
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.
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-Q424-012
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 Home Equity Loan Rates in Wisconsin Today
WISCONSIN HOME EQUITY LOAN RATES TODAY
Current home equity loan rates in
Wisconsin.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Compare home equity loan rates in Wisconsin.
Key Points
• Home equity loans allow homeowners to borrow against their home’s equity for high-cost projects, such as home renovations, education, and debt consolidation.
• Home equity loan interest rates are influenced by the prime rate, the borrower’s creditworthiness, and overall market conditions.
• To qualify for the lowest rates, it’s important to build a strong credit score, manage debt-to-income ratio, obtain adequate property insurance, and maintain sufficient home equity.
• Home equity loans typically have fixed interest rates, ensuring consistent monthly payments throughout the loan tenure.
• Alternatives to home equity loans include HELOCs, HECMs, and cash-out refinances, each with its own features and eligibility criteria.
Introduction to Home Equity Loan Rates
Welcome to our guide on Wisconsin home equity loan rates. We’re here to help you understand how to leverage the equity in your home, the interest rates you can expect, and tips on how to get the best deal. We’ll also discuss some alternatives to home equity loans that might be a good fit for your needs.
To begin, let’s look at what is a home equity loan.
How Do Home Equity Loans Work?
Home equity loans can be a smart financial move: By using your home as collateral, homeowners secure lower interest rates than on personal loans. If you’re still paying off your first home loan, a home equity loan is considered a second mortgage. These loans come with fixed interest rates and flexible repayment terms, typically ranging from 5 to 30 years.
To qualify, homeowners need at least 20% equity in their property. If you’re approved, the funds can cover an array of expenses, from renovations to education, medical bills, and debt consolidation.
Recommended: Cash-Out Refinance vs Home Equity Line of Credit
Where Do Home Equity Loan Rates Originate?
Home equity loan interest rates are a product of multiple economic factors, with the prime rate playing a significant role. The prime rate is what banks charge their most creditworthy clients. Federal Reserve policy decisions on interest rates can also sway home equity loan rates. By understanding these influences, homeowners can better anticipate rate shifts and make well-informed decisions about the timing of your home equity options.
How Interest Rates Impact Home Equity Loan Affordability
The interest rate you secure can have a significant impact on your ability to afford a loan over its full term. Over a standard 20-year home equity loan, for example, a 1% difference in the interest rate can mean a higher monthly payment. Even more significant, that seemingly small difference can add up to an extra $11,000 in interest paid over the life of the loan, as illustrated in the chart below.
| Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|
| 8.00% | $627 | $75,559 |
| 7.50% | $604 | $70,007 |
| 7.00% | $581 | $64,554 |
Home Equity Loan Rate Trends
The prime interest rate is a moving target, and its fluctuations are a crystal ball of sorts for predicting the future of home equity loan rates. By keeping a close eye on the prime rate, you can gain valuable insights into what the future holds for your borrowing options. This knowledge can empower you to make more informed financial decisions.
Historical Prime Interest Rates
Since 2018, the prime rate has dipped to a low of 3.25% in 2020 and peaked at 8.50% in 2023. This fluctuation is a reflection of the ever-changing economic climate and the Federal Reserve’s continuous efforts to keep things steady. These tweaks have a ripple effect, influencing the rates of adjustable-rate mortgages, credit cards, corporate loans, and various home equity options.
| Date | Prime Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.50% |
| 9/27/2018 | 5.25% |
Source: St. Louis Fed
The graphic below shows that the prime rate has not been above 10% since the 1980s.
Source: TradingView.com
Factors Influencing Home Equity Loan Rates
Besides the prime rate, a variety of other factors help determine your home equity loan rate, such as your credit score, loan-to-value ratio, home value, home value stability, property location, and lender policies. Lenders carefully consider these elements when setting the interest rate and terms of a home equity loan, as they provide a comprehensive view of your financial standing, the value of your property as collateral, and the overall risk of the loan.
These same factors also influence the rates and terms of a HELOC (home equity line of credit), which is another way to get equity out of your home.
Credit Score
The better your credit score, the more favorable your interest rates. Lenders often look for a minimum of 680, but many prefer 700 or higher. Why? Because a higher score means you’re less likely to default, which makes you a more attractive candidate for a loan.
Home Value
Lenders often use independent appraisals to help determine the value of a home and the amount of equity a homeowner has. This helps them set appropriate loan limits. The more equity you have, the more you may be able to borrow.
Loan-to-Value (LTV) Ratio
The LTV ratio is a critical factor in determining the maximum loan lenders will permit. In Wisconsin, most lenders cap your combined LTV (your mortgage balance plus loan amount divided by your home value) at around 85%.
Let’s say you currently owe $300,000 on your mortgage and you want to borrow $75,000 for a renovation project. Your home is appraised at $450,000:
$300,000 + $75,000 = $350,000
$375,000 / $450,000 = 83%
At 83% combined LTV, there is a good chance a lender will approve a home equity loan.
Home Value Stability
The ups and downs of home values impact the equity you’ve built in your home. When the housing market is on the upswing, lenders are often more willing to approve larger loans, as the increasing value of your property can act as a safety net. But when home values dip, lenders might tighten their belts, leading to more stringent criteria and potentially smaller loan amounts.
Property Location
Living in an area with a high risk of natural disasters or other hazards can lead to higher interest rates. Lenders may charge more in interest to offset the risk of lending in these areas. High-risk areas can include places that are prone to natural disasters, such as hurricanes, floods, and wildfires.
Lender Policies
When you’re looking at home equity options in Wisconsin, it’s important to consider lender policies. They can have a big impact on the interest rate you’re offered. To make sure you’re getting the best deal, compare interest rates, fees, and closing costs from several lenders. Do your homework, and you can get the most favorable terms for your home equity options in Wisconsin.
How to Qualify for the Lowest Rates
To qualify for the best home equity loan rates in Wisconsin, you’ll need to have a strong credit score, a low debt-to-income ratio, adequate property insurance, and a good amount of equity in your home. By making sure you meet these qualifications, you’ll be able to get the best loan terms for your needs and enjoy the financial flexibility and peace of mind that come with homeownership.
Build a Strong Credit Score
A robust credit score is your ticket to more attractive interest rates on home equity loans. On the flip side, a lower credit score might mean higher rates or even a rejection. That’s why it’s key to keep your credit score in tip-top shape by paying your bills on time, checking your credit report regularly, and not maxing out your credit cards.
Manage Debt-to-Income (DTI) Ratio
Your DTI ratio is a crucial factor in determining your eligibility for a home equity loan. This ratio, which compares your gross monthly income to your monthly debt payments (auto loan, student loan, personal loan, etc), gives lenders a clear picture of your financial health. Most lenders require a DTI of 36% or less to approve a home equity loan. However, some lenders may offer home equity loans to borrowers with a DTI between 36% and 50%, but charge higher rates and fees.
Obtain Adequate Property Insurance
It’s standard practice for home equity lenders in Wisconsin to require property insurance, especially in areas prone to flooding. These policies are designed to protect you and your lender from potential financial losses due to damage or destruction of your property. It’s a good idea to review your coverage before applying for a home equity loan or HELOC.
Maintain Sufficient Home Equity
To qualify for a home equity loan in Wisconsin, you’ll need to have at least 20% equity in your home. The 20% equity requirement is in place to protect borrowers from taking on more debt than they can handle and to protect lenders from the risk of default. A home equity loan calculator can help you determine your equity level.
Fixed vs. Variable Interest Rates
Home equity loans typically come with fixed interest rates, which means you can count on steady, predictable monthly payments for the life of the loan. While fixed rates offer peace of mind, they often start out higher than variable rates, which can be more affordable at the outset. This is something to consider if you’re looking for a home equity loan in Wisconsin and want to know exactly what your payments will be.
Tools & Calculators
Use the helpful tools and calculators to find out how much you can borrow and what your payments will be, and to compare different loan options. Here, in addition to the home equity loan calculator, you’ll find a HELOC repayment calculator and a HELOC interest only calculator.
Run the numbers on your home equity loan.
-
Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Closing Costs and Fees
Home equity loan closing costs typically range from 2% to 5% of the loan amount. These include a variety of fees such as the appraisal, credit report, document preparation, origination, notary, title search, and insurance.
Loan origination fees may be around 0.5% to 1% of the loan amount, or a flat fee. Title insurance is another cost, typically 0.5% to 1% of the loan balance, with title search fees ranging from $100 to $250. Appraisal fees can be between $300 and $500, and credit report fees are usually $50 to $100. Make sure to factor these into your calculations when determining the cost of your home equity loan.
Tax Deductibility of Home Equity Loan Interest
Good news: The interest you pay on a home equity loan can be tax-deductible if it’s used for home improvements. If you’re married and filing jointly, you can deduct interest on loans up to $750,000. Single filers can deduct interest on loans up to $375,000. Just remember, you’ll need to itemize your deductions to claim this benefit.
Alternatives to Home Equity Loans
There are a few different types of home equity loans and lines of credit. Home equity lines of credit (HELOCs), home equity conversion mortgages (HECMs), and cash-out refinances all have unique features and requirements. Each option has its own pros and cons, so it’s important to consider your specific financial situation and needs.
Home Equity Line of Credit (HELOC)
A home equity line of credit (HELOC) can be another smart financial move. You can borrow up to a certain limit and pay interest only on the amount you use. During the draw period, you can pay down the principal balance, making more money available to borrow. One drawback: Variable interest rates can change, so your monthly payments may go up. Here’s a HELOC vs home equity loan comparison at a glance:
| 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 Line of Credit?
Home Equity Conversion Mortgage (HECM)
An HECM, a government-insured reverse mortgage, is an option for those 62 and older to receive payments from the lender based on their home’s value. The funds can be received in various ways: a lump sum, regular payments, or a line of credit. Unlike Wisconsin home equity options and HELOCs, HECMs don’t require monthly payments, only becoming due when you leave the home. (While SoFi does not offer HECMs at this time, we do offer home equity loans and HELOCs.)
Cash-Out Refinance
A type of mortgage refinance, cash-out refinance is a new mortgage that pays off your old one and lets you pocket the difference. Most lenders will let you borrow up to 80-85% of your home’s equity. Wisconsin home equity options and HELOCs require at least 20% equity, while reverse mortgages have no equity requirement but do have an age stipulation.
The Takeaway
In Wisconsin, home equity loans are a great way to leverage the equity in your home for a variety of financial needs. Understanding how home equity loans work and how to get the best interest rates are key to making a smart decision that’s right for your financial situation. Shopping around to compare rates, fees, and closing costs can also be enlightening and ensure you get the best available deal.
Unlock your home’s value with a home equity loan from SoFi.
FAQ
What would my monthly payment be on a $50,000 loan?
With a $50,000 home equity loan, you have to consider the interest rate and loan term, as these will greatly affect how much you’ll pay each month. An 8.00% interest rate and a 10-year term would mean a monthly payment of $607. Score a 6.00% rate and choose a 20-year term and you’d pay $358 per month.
What is the monthly payment for a $100,000 HELOC?
The monthly payment on a $100,000 HELOC will depend on the current market interest rate and how much of the line you have used. If you used the entire $100,000 and repaid it over 20 years at 7.00% interest, you would need to come up with $775 per month. To get a rough estimate of your monthly payment, you can use the calculator shown above.
What is the payment for a $25,000 home equity loan?
When considering a home equity loan, it’s important to consider the current interest rate and the term of the loan, as they will affect your monthly payment. To give you an idea, an 8.50% interest rate repaid over 10 years would give you a $310 monthly payment.
What would the payment be on a $30,000 home equity loan?
When you’re thinking about a $30,000 home equity loan, it’s important to consider how the interest rate and loan term will affect your monthly payment. But if you had a 7.00% interest rate and repaid the loan over 10 years, you’d pay about $348 per month.
What might disqualify you from securing a home equity loan?
There are a few things that can prevent you from getting a home equity loan, including having a poor credit history, not having enough equity in your home, having a high debt-to-income ratio, and not having enough insurance on your home. These factors can make it harder for you to get a home equity loan, so it’s important to consider them before you apply.
What are the benefits of a HELOC?
Home equity lines of credit, or HELOCs, are a great way to access the equity in your home. They offer flexibility in borrowing, lower interest rates than most credit cards, and the option to pay interest only on the money you actually borrow. These features make HELOCs a popular choice for homeowners looking for a cost-effective way to borrow.
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.
This content is provided for informational and educational purposes only and should not be construed as financial advice.
SOHL-Q424-109
More home equity resources.
-
What is a Home Equity Line of Credit
-
Different Types of Home Equity Loans
-
HELOC vs Home Equity Loan: How They Compare
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Current Home Equity Loan Rates in Oklahoma Today
≈
Oklahoma HOME EQUITY LOAN RATES TODAY
Current home equity loan rates in
Oklahoma.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Compare home equity loan rates in Oklahoma.
Key Points
• Home equity loans allow homeowners to borrow against the equity in their homes.
• Home equity loan rates are influenced by the prime rate and economic conditions, including the local real estate market.
• To qualify for the lowest rates, it’s important to have a strong credit score, manage debt-to-income ratio, obtain adequate property insurance, and maintain sufficient home equity.
• Home equity loans offer fixed interest rates, providing stability and predictability in monthly payments, while HELOCs have variable rates that can fluctuate.
• Alternatives to home equity loans include HELOCs, HECMs, and cash-out refinances, each with its own features and eligibility criteria.
Introduction to Home Equity Loan Rates
Ready to learn how to get equity out of your home in Oklahoma? This guide is your introduction to home equity loan rates in the Sooner State — how they are determined, what factors influence them, and (especially key) how you can qualify for the best home equity loan rate possible. We’ll also show you the tools that are available to help you determine how much you can borrow and whether you qualify.
First, let’s make sure you understand the basics: What is a home equiy loan?
How Do Home Equity Loans Work?
A home equity loan is a loan that uses your home as collateral, which is why home equity loans typically offer lower interest rates than most unsecured personal loans. With a fixed rate, home equity loans offer a consistent, predictable repayment schedule. In order to take advantage of a home equity loan, you’ll need at least 20% equity in your primary residence to qualify — so it helps to pay off your home loan for a while before you apply. Many Oklahomans use these loans for renovations, education, medical bills, or debt consolidation.
You might be wondering, is a home equity loan the same thing as a home equity line of credit? The short answer is no. But we’ll get to what is a home equity line of credit in more detail below.
Where Do Home Equity Loan Interest Rates Originate?
The all-important home equity loan interest rate that drives the cost of your loan is not an arbitrary number; the interest rate a borrower is offered is influenced by a variety of economic factors. The cascade starts with the Federal Reserve. Fed policy on its rates helps drive the prime rate, which is the interest rate that banks charge their most creditworthy customers. Lenders have their prime rate, and then adjust it based on an individual borrower’s qualifications.
How Interest Rates Impact Home Equity Loan Affordability
The interest rate you secure can have a big impact on your ability to pay down your loan. For example, a 20-year home equity loan of $100,000 with an interest rate of 7.50% would mean a monthly payment of $806. The table below shows you how that monthly payment will change if you alter the loan amount, interest rate, or loan term.
| Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|
| 8.50% | $620 | $24,391 |
| 8.00% | $607 | $22,797 |
| 7.50% | $594 | $21,221 |
Home Equity Loan Rate Trends
The prime interest rate is a key player when it comes to Oklahoma home equity loan rates. By keeping an eye on changes to the prime rate and understanding its historic ups and downs, you can make an informed decision about the right time to apply for an Oklahoma home equity loan.
The chart below shows the prime rate in recent years. It bottomed out at 3.25% in 2020 and peaked at 8.50% in 2023. The graphic below shows a much longer period of time: 50-plus years. As you can see, rates as low as 3.25% haven’t come around very often.
Historical Prime Interest Rates
| Date | Prime Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.50% |
| 9/27/2018 | 5.25% |
Source: St. Louis Fed
Source: TradingView.com
Factors Influencing Home Equity Loan Rates
As noted above, several factors, such as credit score, loan-to-value ratio, home value, home value stability, property location, and lender policies, influence home equity loan rates. Many of these are within your control (unlike the prime rate), so it’s worth looking at them closely:
Credit Score
If you’re the kind of person who’s diligent about making timely payments, you’re in luck. Lenders are more inclined to offer you a better interest rate. They generally look for a credit score of 680 or higher, but many will be more impressed if you’re at 700 or above.
Home Value
To figure out how much you can borrow, lenders will request an appraisal to determine your home’s value. This will help them establish your equity and the maximum loan amount they’re willing to approve.
Loan-to-Value (LTV) Ratio
Once you know your home value, the LTV ratio can be calculated by taking the loan amount (the amount you owe on your first mortgage plus the amount you want to borrow with a home equity loan) and dividing it by your home’s appraised value. For a home equity loan, you generally want the answer to be less than 85%.
Home Value Stability
The stability of home values can significantly impact the amount of equity homeowners can access and utilize. When home values are on the rise in your part of Oklahoma, lenders may be more inclined to approve larger loan amounts, as the increased value of the property reduces the perceived risk. Conversely, if home values have been declining, lenders may be more conservative.
Property Location
Living in a place with a history of natural disasters or extreme weather can mean higher interest rates. Lenders may see these areas as risky, which can mean you’ll pay more over the life of your loan. If you live in an area with a high risk of flooding, tornadoes, or wildfires, you may have a more challenging time finding the lowest rates in Oklahoma.
Lender Policies
When you’re looking for a home equity loan, it’s important to consider how a lender’s policies will impact the interest rate you are offered. To make a smart decision, you should shop around and compare interest rates, fees, and closing costs from different lenders. By doing your homework and comparing your options, including home equity rates in Oklahoma, you can find the loan that’s right for you and may save money in the long run.
How to Qualify for the Lowest Rates
To qualify for the best Oklahoma home equity loans rates, there are a few things you should keep in mind. Tick off everything on this to-do list and you should be in good shape:
Build a Strong Credit Score
A higher credit score can lead to more favorable interest rates on home equity loans. Check your credit report and correct any inaccuracies before applying for a home equity loan. Avoid using the maximum on all your credit cards at once. And above all, pay your bills on time.
Manage Debt-to-Income Ratio
Your debt-to-income (DTI) ratio is a key player in loan approval. It’s a simple calculation: Add up your monthly debts (car loan, student loan, etc.) and divide by your gross monthly income. You’re looking for a number under 50% — and under 36% is even better for a home equity loan.
Obtain Adequate Property Insurance
Lenders want to know their investment is protected, especially in high-risk areas, so make sure your homeowner’s insurance is up to date.
Maintain Sufficient Home Equity
You’ll need at least 20% equity in your residence to qualify for a home equity loan, as we’ve seen. When you’re computing your equity to make sure you hit this number, remember to use the current estimated value of your home.
Fixed vs. Variable Interest Rates
Home equity loans typically feature fixed interest rates, so monthly payments remain constant throughout the loan’s life. While fixed interest rates offer stability, they may result in higher initial rates compared to variable rates, which can start lower but fluctuate over time. A home equity line of credit (HELOC) usually offers variable interest rates. Depending on your comfort level with changing monthly payment amounts and the direction you think interest rates are headed, one or the other of these options will be more suitable for you.
Tools & Calculators
By using our online tools and calculators, you can get a better idea of your eligibility for a home equity loan or HELOC, the amount you may be able to borrow, and your monthly payments. Play around with these helpful tools before you submit a loan application.
Run the numbers on your home equity loan.
-
Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Closing Costs and Fees
Home equity loans typically come with closing costs that range from 2% to 5% of the loan amount. These may include fees for services such as appraisals, credit reports, document preparation, origination, notary, title search, and title insurance. Every lender’s fee schedule is different, so it’s important to consider not only what interest rate you are being offered but also the lender’s fee schedule when you are weighing one loan option against another.
Tax Deductibility of Home Equity Loan Interest
Here’s the scoop: The interest you pay on a home equity loan could be tax-deductible if you’re using the funds to buy, build, or improve your home. If you’re married and filing jointly, you can deduct interest on loans up to $750,000; for single filers, the number is $375,000. To benefit from this deduction, you’ll need to itemize your deductions on your tax return.
Alternatives to Home Equity Loans
Beyond the conventional home equity loan, there are different types of home equity loans at your disposal. Each comes with its own set of features and eligibility requirements.
Home Equity Line of Credit (HELOC)
A home equity line of credit (HELOC) is like a credit card. The lender will approve you for a certain amount of credit, and you can borrow up to that limit. You are not required to take the full amount of the HELOC. You will only pay interest on the amount you have borrowed. A HELOC has a variable interest rate that changes with the prime rate. If the prime rate goes up, your interest rate goes up and your payment will increase. 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 |
Home Equity Conversion Mortgage (HECM)
An HECM is a government-backed reverse mortgage option for those 62 and older. With an HECM, you can receive payments from the lender based on your home’s value. The beauty of it is that you don’t have to repay the loan until you leave your home. This sets it apart from Oklahoma home equity loans and HELOCs, which require regular payments. While HECMs may have higher closing costs and longer processing times, the benefits are worth considering. (While SoFi does not offer HECMs at this time, we do offer home equity loans and HELOCs.)
Cash-Out Refinance
This special type of mortgage refinance gives you a new mortgage that pays off your old one and an additional lump sum that you can use however you wish. Lenders usually permit borrowing up to 85% of your home’s value. If you’re considering a cash-out refinance vs. a home equity line of credit, the rate you have on your current mortgage is an important
The Takeaway
If you’re a homeowner in Oklahoma, you can make the most of your home equity by learning about home equity loan rates in Oklahoma and the factors that influence them. By comparing lenders, using online tools, and considering all financing options, you can make an informed decision about your home equity loan.
Unlock your home’s value with a home equity loan from SoFi.
FAQ
What will you be paying each month on a $50,000 home equity loan?
The interest rate and loan term will determine what the monthly payment is on a $50,000 home equity loan. An 8.00% interest rate and a 10-year term would mean a monthly payment of $607. If the interest rate was 7.00%, the monthly payment would change to $581.
What is the monthly payment on a $100,000 HELOC?
Your monthly payment on a $100,000 HELOC will fluctuate based on the current interest rate and how much of your credit line you’ve used. Consider using a HELOC Monthly Payment Calculator, which can take these variables into account and provide an accurate projection.
What is the payment on a $25,000 home equity loan?
If you’re thinking about a $25,000 home equity loan, it’s a smart move to shop around and compare interest rates and loan terms to find the right loan for your financial needs. If you paid back the loan over a decade, at an interest rate of 6.50%, you would pay $284 per month. But changing either the term or rate would change the payment amount, as well as how much interest you pay over the life of the loan.
What would the payment be on a $30,000 home equity loan?
A 10-year term and 8.00% interest rate would equal a monthly payment of $364. A 7.00% interest rate would cost you $348 per month over the same time period.
What might disqualify you from getting a home equity loan?
Generally speaking, lenders want to see that you have a history of making on-time payments and being financially responsible. Having a bad credit score, lacking adequate equity in your home, being burdened by a high level of debt, or not having insurance on your property could all be disqualifying factors.
What are the benefits of a HELOC?
A home equity line of credit (HELOC) has a lot of benefits, including a lower interest rate than a credit card and the ability to only pay interest on the money you borrow. If you know you need cash on hand for an upcoming project or expense but you aren’t sure exactly how much, a HELOC can be an especially flexible option.
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.
This content is provided for informational and educational purposes only and should not be construed as financial advice.
SOHL-Q424-096
More home equity resources.
-
What is a Home Equity Line of Credit
-
Different Types of Home Equity Loans
-
HELOC vs Home Equity Loan: How They Compare
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Resolution 2025: Get Rid of Bad Debt
As you may have read, we’re wrapping up the year by helping you think big-picture about your financial health. The goal is to make it easy for you to evaluate, and maybe even lay the groundwork for a New Year’s resolution or two. To that end, we’re dedicating one article to each of the three main aspects of your finances: spending, debt and investing for your future. Up today, debt.
As stressful as it can be to owe money, debt is a very conventional part of American life. When used responsibly, it can be an important tool to help you achieve milestones like owning a home.
But some debt has the opposite effect. The interest you owe can become a slippery slope, pushing your balances ever higher and derailing your financial goals completely.
If your debt is overwhelming you, the first step is to determine which type of debt is the problem. Good debt includes loans you took out as part of an investment in your future: a mortgage on your home or a loan for a college degree, for example. Bad debt, on the other hand, usually leaves you with little to show for it. The things you used it for may have depreciated in value — or just led to more debt. The best example of this is high-interest credit card debt.
Next, take an inventory of everything, including credit cards, car loans, personal loans, student loans, mortgages and medical debt. Note the balances, interest rates, and minimum payments.
Then, consider how you might be able to extricate yourself. The avalanche method, where you focus on paying off the debt with the highest interest rate first, usually makes the most financial sense, but there are other options too. In the debt fireball method, you concentrate on the bad debt first, and in the snowball method, you hone in on the smallest balance first. (This last one has more of a psychological benefit, giving you momentum and a sense of accomplishment.)
You may also want to explore refinancing your loans at lower interest rates, getting a debt consolidation loan, or as a very last resort, seeking a debt settlement.
So what? Debt gets a bad rep, but it’s not always bad for you. When it is, don’t lose hope — there are ways to get out from under. And remember, bad debt doesn’t exist in a vacuum. Usually it stems from a mismatch between your spending and income. So take the time to examine any non-essential expenses. If you can pay off more debt by cutting back, it’ll be well worth it in the long run.
Related Reading
• Dear SoFi, I’m Overwhelmed by Debt. Can You Help Me? (SoFi)
• Debt Management Guide (Investopedia)
• Paying Off Debt Is the Hardest in These States: Survey (News Nation)
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
photocredit: iStock/ediebloom
OTM20241218SW
Read moreCurrent Home Equity Loan Rates in Utah Today
UTAH HOME EQUITY LOAN RATES TODAY
Current home equity loan rates in
Utah.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Compare home equity loan rates in Utah.
Key Points
• Home equity loan rates vary based on factors like lender, prime rate, and economic conditions.
• Home equity loans allow homeowners to borrow against their home’s equity for large expenses like renovations or debt consolidation.
• Home equity loan interest rates are influenced by the borrower’s credit score, debt-to-income ratio, and loan-to-value ratio.
• Interest rates on home equity loans are typically fixed, while home equity line of credit rates are variable.
• Alternatives to home equity loans include HELOCs, HECMs, and cash-out refinances, each with its own features and eligibility requirements.
Introduction to Home Equity Loan Rates
A home equity loan allows you to get equity out of your home. It uses your home as collateral, so it will likely offer a lower interest rate than an unsecured personal loan. In this guide, we’ll run down all the facts you need to know about home equity loan rates in Utah. We’ll look at how rates are set and provide details on how you can qualify for the best available rate on a home equity loan.
But first, let’s make sure we cover what is a home equity loan so you’ll know how it’s different from other types of loans or from a home equity line of credit.
How Do Home Equity Loans Work?
A home equity loan is essentially a second mortgage, with your home as the collateral. You receive the funds in a lump sum and then repay them, with interest, in equal monthly installments over a period of 5 to 30 years. These loans generally have a fixed rate, and at least 20% equity in your home will likely be required.
The Source of Home Equity Loan Interest Rates
Home equity loan interest rates are very important, as they largely determine the overall cost of your loan. These rates are influenced by a variety of economic factors. Federal Reserve policy decisions affect lenders’ prime rates, which is the rate that a bank charges its most creditworthy customers.
How Interest Rates Impact Home Equity Loan Affordability
Understanding how interest rates affect your loan is crucial. The chart below shows how different loan amounts, interest rates, and loan terms influence monthly costs. It’s important to realize that while the difference each month between, say, a 7.00% and an 8.00% interest rate may not be staggering, the difference in the total cost of the loan can run to thousands — even tens of thousands — of dollars, depending on the size of the loan.
| Loan Amount | Loan Term | Interest Rate | Monthly Payment |
|---|---|---|---|
| $100,000 | 20 years | 8.00% | $836 |
| 7.00% | $775 | ||
| 10 years | 8.00% | $1,213 | |
| 7.00% | $1,161 | ||
| $50,000 | 20 years | 8.00% | $418 |
| 7.00% | $388 | ||
| 10 years | 8.00% | $607 | |
| 7.00% | $581 | ||
| $25,000 | 20 years | 8.00% | $209 |
| 7.00% | $194 | ||
| 10 years | 8.00% | $303 | |
| 7.00% | $290 |
Home Equity Loan Rate Trends
The prime rate is an important determinant of the interest rate you may be offered for a home equity loan in Utah, so it pays to keep tabs on where current rates are and how they stack up against historical rates. The average prime rate hit a low of 3.25% in 2020 and a high of 8.50% in 2023. The graphic below shows the history of the average over five-plus decades. As you will see, history shows that it doesn’t drift below 4.00% very often.
Historical Prime Interest Rates
| Date | Prime Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.50% |
| 9/27/2018 | 5.25% |
Source: St. Louis Fed
Source: TradingView.com
Factors Influencing Home Equity Loan Rates
In Utah, as throughout the U.S., several factors beyond the prime rate come into play when determining home equity loan rates. Your credit score, home value, loan-to-value ratio, property location, and lender policies all have an impact on the rate you’re offered. These are important, so we’ll look at each factor individually.
Credit Score
You probably remember that when you got your home loan, your credit score was a critical part of the lender’s criteria. This is true with a home equity loan, as well. Lenders want to see a credit score of 680 or higher from a home equity loan applicant, although higher scores may get you a better rate.
Home Value
Lenders typically use independent appraisals to determine the value of your property before offering a loan. This appraised value of your home is key to determining exactly how much they will lend.
Loan-to-Value (LTV) Ratio
Once you know your home’s appraised value, you can figure out your LTV ratio. Your combined LTV ratio is calculated by dividing the remaining balance on your first mortgage plus the loan amount you’re seeking by the appraised value of the home. The maximum combined LTV lenders typically allow for home equity loans is around 85%.
Home Value Stability
Where you live in Utah is also important because movements of the local real estate market may affect your loan rate. If your home’s value is on the rise, lenders are more likely to greenlight a larger home equity loan, as an increasing property value helps lower their risk. But if values in your area are falling, lenders may offer smaller home equity loans.
Property Location
Where your property is located also impacts your interest rate in another way. If your home is in an area that is at a higher risk for natural disasters, you may be offered a higher rate, reflecting the fact that the lender is taking on more risk by lending in these areas. High-risk areas are those that are more likely to experience hurricanes, floods, tornados, or wildfires, for example.
Lender Policies
Each lender has its own policies that might impact the interest rate you’re offered. This is why it’s a good idea to shop around and compare interest rates, fees, and closing costs. By doing your research and comparing your options, you might be able to find better terms and save money.
How to Qualify for the Lowest Rates
To qualify for the lowest interest rates available, take these steps before you file your first home equity loan application.
Build a Strong Credit Score
A higher credit score can lead to better rates on home equity loans. Making timely payments is important, of course, but you should also take the time to check your credit report and correct any inaccuracies (they do happen). And avoid using the max credit line on all your credit accounts.
Manage Debt-to-Income Ratio
Your debt-to-income (DTI) ratio is a significant factor when applying for a home equity loan. This ratio, which compares your monthly gross income to your monthly debt obligations, is a key indicator of your financial health. In Utah, lenders typically look for a DTI ratio below 36%, although some will go as high as 50% for home equity loans. You can figure out your DTI by adding up your monthly debts (student loan payment, car loan payment, etc.) and dividing by your gross monthly income.
Obtain Adequate Property Insurance
Full property insurance coverage is a must for home equity loans, as it protects you and your lender.
Maintain Sufficient Home Equity
If you’re eyeing a home equity loan in Utah, remember that you need to keep at least 20% equity in your property to qualify. This equity acts as a safety net for both you and the lender, ensuring that you’re not overleveraging your home.
Fixed vs. Variable Interest Rates
As noted above, home equity loans typically feature fixed interest rates. This means that the interest rate remains constant throughout the loan’s duration, ensuring predictable monthly payments. While fixed interest rates offer stability, they may result in higher initial rates compared to variable rates, which can start lower but fluctuate over time.
Tools & Calculators
Online tools and calculators can help you determine your eligibility for a home equity loan or home equity line of credit in Utah, learn your borrowing capacity, and determine what your monthly payments might be. Here are three calculators that take some of the stress out of the borrowing process:
Run the numbers on your home equity loan.
-
Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Closing Costs and Fees
Closing costs for a home equity loan can range from 2% to 5% of the loan amount. Common closing costs include an appraisal fee, credit report fee, document preparation fee, and title insurance fee, but each lender has its own fee schedule. That’s why it’s important to compare fees when you’re comparing interest rates on loan offers.
Tax Deductibility of Home Equity Loan Interest
If you use your home equity loan to build or substantially improve a home, the interest you pay could be deductible. Joint filers can claim as a deduction interest on up to $750,000 of a home equity loan, while single filers can claim interest on up to $375,000 of a loan. Just remember, you’ll need to itemize your deductions to claim this benefit. This means you’ll need to save the receipts from your renovations with your tax documents.
Alternatives to Home Equity Loans
In Utah, homeowners have alternatives to traditional home equity loans. These different types of home equity loans include a home equity line of credit (HELOC), home equity conversion mortgage (HECM), and cash-out refinance. They are all different so make sure you study the details:
Home Equity Line of Credit (HELOC)
Qualifying for a home equity line of credit (HELOC) is similar to getting a home equity loan, but in actual use, a HELOC feels more like a credit card. You get a lender’s permission to borrow up to a certain limit, but you only pay interest on the portion of that credit line you actually use. As you consider the HELOC vs. home equity loan decision, it’s worth noting that the HELOC’s interest rate is usually variable and so can increase (or decrease) with time.
Home Equity Conversion Mortgage (HECM)
A home equity conversion mortgage (HECM) is a government-insured reverse mortgage program. Homeowners who are 62 years of age or older can withdraw some of the equity in their home as a lump sum, fixed monthly payments, a line of credit, or a combination of these. Unlike a home equity loan, HECMs do not require borrowers to make monthly mortgage payments. They repay the loan when they leave the home. (While SoFi does not offer HECMs at this time, we do offer home equity loans and HELOCs.)
Cash-Out Refinance
A cash-out refinance is a special type of mortgage refinance. With a cash-out refi, you get a new mortgage that’s bigger than your old one. You’ll then pay off the old loan and be left with extra cash. Considering a cash-out refinance vs. a home equity line of credit? One thing to remember is that a cash-out refi leaves you with one monthly payment instead of two, which some borrowers find attractive. However, if your existing mortgage rate is nicely below current rates in Utah, you may find that doing a refinance won’t save you money on interest charges. Use a mortgage calculator to run the numbers before signing on.
The Takeaway
Understanding Utah home equity loan rates and what influences them is key to making smart financial decisions and making the most of your hard-earned home equity. By shopping around, cultivating a good credit score, and keeping your debt-to-income ratio in check, you can improve your chances of getting the best rate available to you.
Unlock your home’s value with a home equity loan from SoFi.
FAQ
What would the monthly payment be on a $50,000 home equity loan?
The monthly payment on a $50,000 home equity loan will depend on your interest rate and repayment term. Plug those numbers into a home equity loan calculator to get the exact payment amount.
What would a $100,000 HELOC look like in monthly payments?
Having a $100,000 home equity line of credit (HELOC) doesn’t mean that you have borrowed $100,000. A HELOC is a line of credit. So if you borrow $30,000 against that credit line, your monthly payment at 8.00% (with a 10-year term) could be $364. But if you use the full $100,000, then your monthly payment would be $1,213.
What is the monthly payment for a $25,000 home equity loan?
When you’re looking at a $25,000 home equity loan, it’s important to understand that the interest rate and loan term can impact your monthly payments. The monthly payment on a $25,000 home equity loan could run from $150 to around $500 depending on your interest rate and loan term.
Wondering what the payment would be on a $30,000 home equity loan?
Borrowing $30,000 with a 20-year term at a rate of 7.50% would equal a monthly payment of $242. Changing the interest rate or loan term will also change the monthly payment amount.
What might disqualify you from securing a home equity loan?
A history of bad credit, not enough equity in your home, a high debt-to-income ratio, or lacking enough property insurance can all lead to being disqualified for a home equity loan.
What are the benefits of a HELOC?
A home equity line of credit (HELOC) is an attractive financial tool for a number of reasons. It offers a lower interest rate than most credit cards, and the convenience of only paying interest on the amount of the credit line that you use. These benefits make a HELOC a good option for people who want to have financial flexibility and a cost-effective way to borrow money.
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.
This content is provided for informational and educational purposes only and should not be construed as financial advice.
SOHL-Q424-104
More home equity resources.
-
What is a Home Equity Line of Credit
-
Different Types of Home Equity Loans
-
HELOC vs Home Equity Loan: How They Compare
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Stay up to date on the latest business news and stock market happenings.