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“Thank you!” That’s what your future self will likely say for taking the time to learn about applying to college now. After all, the process — researching schools, submitting applications, figuring out how to pay for school — is hardly quick and simple.
In fact,“Project: Get Into College” may come to feel like a part-time job at times. Even reading this guide, which lays out some of the basics of what you’ll need to know and do, may seem overwhelming. That’s why you’ll probably want to break down the process into manageable chunks, including reading this guide. Our recommendation: skim it first, bookmark it, and then come back as questions come up.
Check out some helpful tips for getting the most out of high school and making smart choices — before you even start applying to colleges.
What to Know When You’re Applying
Where should you go to college, and how many schools should you apply to? We’ll answer these questions and more. You can first start by taking our Quiz: What College Should I Go to?
We’re here to help.
If you have questions about SoFi’s Private Student Loans, call us at 855-456-SOFI (7634) Mon.–Thu. 5am–7pm PT, and Fri.–Sun. 5am–5pm PT. Our agents can answer your questions and walk you through the process.
Figuring Out How to Pay for College
If college is in your future, you’ll need to take a good look at your finances. These resources will help you get a better understanding of how you’ll pay for college, starting with the basics.
What you need to know about student loans, grants, and scholarships.
Depending on where your school is, you have different options when it comes to getting the money you need to pay for school. Here are some resources to help.
Select your state to get started:
Filling Out the FAFSA
The Free Application for Federal Student Aid (FAFSA) is the form students must complete to apply for federal financial aid for college, including grants, work-study, and loans. Learn everything you need to know about the FAFSA, including what it stands for and when you need to fill it out.
A lot goes into making your choice on a school. These articles can help you navigate the next steps once your applications are sent and your offer letters start rolling in.
Get Started With a Private Student Loan
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.
✓ Access up to 85% or $350K of your home’s equity.
✓ Keep your current home loan interest rate.
✓ $0 origination fee options.1
✓ Fixed rates and flexible terms.
View your rate
Checking your rate will not affect your credit score.
Checking your rate will not affect your credit score.
✓ Access up to 85% or $350K of your home’s equity.
✓ Enjoy lower rates for consolidating debt or home upgrades.
✓ Get flexible terms that work for you.
View your rate
Checking your rate will not affect your credit score.
Answer a few questions online to help us assist you better.
Get paired with a dedicated Mortgage Loan Officer.
You’ll be connected with an experienced SoFi Mortgage Loan Officer who’s ready to help you get the best home equity loan for you.
Submit your application.
Your SoFi Mortgage Loan Officer will help you submit your home equity application so you can get access to your cash.
Get started
{/*what is a he loan*/}
What is a home equity loan?
Home equity loans let you borrow money by leveraging the equity in your home. They’re one of the most affordable financing options since home equity rates are lower than interest rates for most other types of loans. These lower interest rates can help fund big purchases, home renovations, or consolidate high-interest debt.
Learn more
You could save thousands with a SoFi home equity loan.
The savings claim above is based upon using a SoFi Home Equity Loan to pay-off credit card balance of $60,000. We assume a credit card APR of 24%. The savings shown assumed payments of only the interest due. We compare that against an assumed SoFi Home Equity Loan of $60,000 (to pay off the credit card) with an APR of 7.29%. Annual interest savings assumes you pay both loans on time. You might not be eligible for the home equity loan and, if you are eligible, your APR rate could be higher. Eligibility and the lowest APR rate depend on credit worthiness, income, and other factors. The 24% APR is the average credit card APR reported by Wallethub for Q1 March 2025 under their Good Credit category.
{/*requirements*/}
Home equity loan requirements:
View your rate
Checking won’t affect your credit score.†
{/*horizon*/}
{/*popular uses*/}
A home equity loan could help with that.
Pay down high-interest debt.
You could save on your monthly payments when you consolidate credit cards or other unsecured loans into one lower rate.
Fund home improvements.
Make your dream kitchen a reality without having to take on high-interest debt.
Make big purchases.
Tuition, weddings, and vacations can get expensive. Instead of putting them on a high-interest credit card, a home equity loan could help you save on monthly payments.
Keep your current mortgage as is, no need to refinance. And for qualified borrowers, there are options to access your home’s equity.
Finance almost anything with up to $350K.
Access up to $350,000 of your home’s equity (up to 85%) to finance home improvements or consolidate debt.
Lower your monthly payment.
You could save compared to a high- interest credit card or unsecured personal loan.
Get dedicated one-on-one support.
You’ll have a dedicated SoFi Mortgage Loan Officer to help you find the right loan option for you.
“Austin and his team were awesome and easy to work with! Great communication and follow up. Kept us in the loop every step of the way! I would go back to Austin without question.”
“Spencer and his team totally went to bat for us and got our loan processed. Very happy with him and his teams efforts and follow up. Communication was excellent right up to the loan funding.”
“Mark and his team worked very closely with us to make sure that we were comfortable with the process, understood the expectations, timeline and overall schedule.”
Compare current home equity loan rates by state and find a home equity loan rate that suits your financial goals.
Select a state to view current rates:
{/*learn more*/}
Learn more about home equity loans.
More resources on home equity
Get answers to questions like “What’s the difference between a home equity loan and a HELOC (home equity line of credit)?”
FAQs
How does a home equity loan work?
To start, you’ll need to have sufficient home equity, which is the difference between the market value and what you owe. You may have built home equity by paying down your mortgage and by seeing your home appreciate. You’ll go through an application process, and the lender will likely order a home appraisal to ensure that there’s enough value there to lend against. You’ll have a lot more paperwork than some other loans and will sign mortgage lien documents that give the lender the right to start proceedings should you fail to make payments. After closing on the loan, you’ll receive all funds upfront. Repayment starts shortly after.
First, assess your financial situation – consider your income, how much equity you have available, if you have at least a “good” FICO® score, and your debt-to-income ratio. Exploring different loan options is encouraged!
Once you’ve found a fitting loan and are ready to apply, you’ll go through the application process, where you’ll submit information about your income, current mortgage, insurance, and other details the lender requests. If everything checks out, you’ll be able to close on your loan! Funds are disbursed around three business days after closing on the loan.
On a home equity loan where the funds are disbursed upfront and your interest rate is locked, the first payment will be due around 30 days after you close the loan.
How do I qualify for a home equity loan?
Home equity loans are contingent on income, credit history, and debt-to-income ratio. LTV is also considered. LTV compares the amount you owe against your home with its current value. Lenders usually want to see an LTV no higher than 80%. (LTV = Loan Value ÷ Property Value.) On a $400,000 home, for example, that means that you should owe no more than $320,000.
How long does it take to get a home equity loan?
It can take an estimated 30 days to close your loan. Funds are disbursed around three business days after closing on the loan. On a home equity loan where the funds are disbursed upfront and your interest rate is locked, the first payment will be due around 30 days after you close the loan.
What is the interest rate on a home equity loan?
A home equity loan offers a low interest rate because it uses your home’s equity to secure the loan. Because of the way it works, you may have access to a larger sum of money at a lower interest rate than you would if you used another source, such as a credit card. View your home equity rate here.
How much can I get with a home equity loan?
When it comes to how much home equity you can tap, many lenders allow a maximum of 90%, although some allow less, and some, more. In other words, your loan-to-value ratio shouldn’t exceed 90% in many cases.
If you’re taking out a second mortgage like a home equity loan or HELOC, your first mortgage and the equity loan compared with your home value is what is called the combined loan-to-value (CLTV) ratio. Most lenders will require a CLTV of 90% or less to obtain a home equity loan, although some will allow you to borrow 100% of your home’s value. For a better idea of exactly how much you can borrow, use SoFi’s Home Equity Loan Calculator.
A home equity line of credit (HELOC) is a credit line secured by the value of your home, minus any existing mortgage owed. You can borrow against it, spend, repay, and borrow again using your home as collateral.
What is the difference between a HELOC vs home equity loan?
A HELOC is a revolving line of credit. You can take out money as you need it, up to your approved limit, during the draw period. You may be able to make interest-only payments on the amount you withdraw during that time, typically 10 years. A home equity loan is another type of second mortgage that uses your home as collateral, but in this case, the funds are disbursed all at once and repayment starts immediately. It is usually a fixed-rate loan of five to 30 years, and monthly payments remain the same until the loan is paid off.
It is rare to have both a HELOC and a home equity loan. One would be a second mortgage and the other would be a third mortgage. Few banks are willing to lend money on a third mortgage, and for any that do, the interest rate would be high.
• Interest rates on home equity loans are influenced by the prime rate and, from a distance, the Federal Reserve’s monetary policy. The borrower’s financial profile also brings important factors to the equation.
• Comparing rates from multiple lenders is a smart move, and the only way to find the best deal and loan terms.
• Boost your credit score and reduce your debt-to-income (DTI) ratio, and you may see the rates lenders offer you drop.
• You’ll need to have 20% equity or more in your home to qualify for a home equity loan.
• Go for a fixed-rate loan if you are looking for predictable monthly payments. Consider an adjustable rate for flexibility, though it may result in higher payments later.
• Interest on home equity loans may be tax-deductible if you use the funds to cover the costs of home-related expenses.
Introduction to Home Equity Loan Rates
Beginning with the basics: What is a home equity loan? It’s a great way for Honolulu homeowners to access the value they have built in their homes, and an option people with equity can use when they need to source cash. In this article, we will cover everything you should know if you’re considering pursuing a home equity loan. We will discuss factors impacting loan rates and give you tips to help you secure the best rates out there.
We’ll also define different types of home equity loans, including options like home equity lines of credit (HELOCs) and cash-out refinances, and explain how they work. This will make you aware of available alternatives, along with the pros and cons of each. Whether you are thinking about embarking on a home renovation, consolidating high-interest debt, or giving yourself permission (finally) to make a major purchase, understanding home equity loan rates in Honolulu will help you to make smart, successful financial decisions.
How Do Home Equity Loans Work?
If you’re still paying off your original mortgage — like most people — a home equity loan is considered a second mortgage. It’s a product that lets you tap your home’s equity and withdraw a lump sum of cash to use as you need.
You will immediately begin repaying that loan, usually in fixed monthly installments. You’ll decide how long you should take to pay it off, usually over a 5- to 30-year term. The loan is secured by your home, and that means you’ll most likely have access to a lower interest rate than you’d be able to get on an unsecured personal loan.
One important thing to know: In order to draw on the equity in your home, you have to actually have equity in your home. Lenders will typically want you to have built a minimum of 20% equity in order to qualify for a home equity loan. If you are still in the process of paying off your mortgage, the money you owe should not be more than your house is worth.
HELOCs vs. Home Equity Loans
Many homeowners begin weighing options for drawing equity from their homes by looking at a HELOC vs. a home equity loan. Here’s a comparison of the two, so you can see how they measure up side-by-side.
Finding the right loan to pull equity from your home is a matter of priorities — including whether you care more about flexibility or long-term stability. A home equity loan’s interest rate is generally fixed, and that can give you the peace of mind of predictable payments during the life of the loan. Many borrowers choose the no-surprises fixed rate over a variable one for exactly that reason.
Repay only what you borrow plus interest; you may have the option to make interest-only payments during the draw period.
Starts immediately at a set monthly payment
Disbursement
Charge only the amount you need
Lump sum
Both loans have benefits, but if you are wondering how to get equity out of your home, and you’ve been making a concerted effort to pay down your mortgage and want a predictable payment for your new loan, a home equity loan may be a compatible choice.
The Origin of Home Equity Loan Interest Rates
Multiple factors help determine what home equity loan rates in and near Honolulu will look like. They include some big-picture economic conditions — but also the details of your individual financial profile, which you’ll always have a lot more control over.
Let’s look at the factors you can’t influence, first. Increases in the federal funds rate and the prime rate, for example, can lead to home equity loan rates rising —but it’s not a simple, cause-and-effect relationship. Federal Reserve policies don’t directly impact home equity loan interest rates. But they can prompt lenders’ base rates to move up or down, and thus, down the line, the rates they charge their borrowers when they offer loans.
Understanding influences like these will help you anticipate rate fluctuations as a borrower, and make the most informed decisions about different home loans, including home equity loans.
Then there are the factors you can control, at least to a certain extent. Your credit score and DTI ratio will definitely be a consideration when lenders offer you a loan at a certain interest rate. The amount of the loan and the length of your repayment term will impact your rate, too. Larger loans and longer terms, as a rule, are subject to higher rates — this is due to risk factors for lenders and the amount of time they will need to wait for full repayment.
Your credit score and DTI truly are in your hands, as both reflect your fiscal choices and behavior. Caring for both is essential in preparing to apply for any loan.
How Does the Interest Rate Impact a Home Equity Loan’s Affordability?
You’re probably already seeing why qualifying for the best interest rates pays off, no matter what loan you are shopping for. No question: Your interest rate will be a big factor in the affordability of your financing, whether you go for a home equity loan or a HELOC. As of late July 2025, the average home equity loan interest rate was 8.25%.
Here is a chart detailing key numbers for a $75,000 home equity loan with a 20-year repayment term. We’ve calculated the payments and the total interest at various interest rates. If you have an 8.00% interest rate, for example, your monthly payment is $627, and you’ll pay $75,559 in interest over the loan’s term. Get a 7.00% rate — one full percentage point lower — and your payment will be $581, with total interest over the life of the loan adding up to $64,554. The lower rate would end up saving you $11,005 over the loan term. As you can see, even if you get a 7.50% rate, you’ll still pay $5,552 less in interest than you would with the 8.00% rate.
Interest Rate
Monthly Payment
Total Interest Paid
8.00%
$627
$75,559
7.50%
$604
$70,007
7.00%
$581
$64,554
Fixed vs Adjustable Interest Rates
When you compare a home equity loan with a HELOC, you’ll notice that the second option most often has a fixed interest rate. With a home equity loan, monthly payments generally won’t change — they will stay the same for the loan’s whole term. Rates like to try to trick you, though. Fixed rates very often start off higher than adjustable ones that are advertised in close proximity. Despite that initially lower variable, or adjustable, rate, a fixed option is usually a better choice for borrowers as payments won’t rise down the road.
Adjustable rates really do appear attractive at first glance, but keep in mind why they are called that. After a defined period, the lender can “adjust” your interest rate to follow a market index. Your rate could easily jump higher than the initial rate you signed up for, and continue to fluctuate. Payments over the life of an adjustable-rate loan can feel totally unpredictable.
If you’re deciding between the two types of rates, think about your financial goals and budget flexibility. Most importantly, consider the amount of risk you feel comfortable with in terms of making payments in the future.
Home Equity Loan Rate Trends
As you look at options for getting equity out of your home, you may think about attempting to perfectly time your loan application. Is there a strategy for achieving the lowest possible rate with good forecasting or timing? Possibly. But the prime rate is a lot like the weather — nobody knows exactly what it will do. Unfortunately, not all borrowers will have time to wait for the prime rate to dip to their advantage. As you can see from the graphic below, it can change direction without much notice.
Take a few key steps in the years or months before you apply, and you can better position yourself to land a home equity loan — even a loan with a rate and term that is manageable and beneficial.
Here’s what to do:
Build Sufficient Home Equity
You’re going to need at least 20% equity in your home in order to qualify for a home equity loan. Calculate what you’ve got now with this simple equation: Subtract your outstanding mortgage balance from your home’s estimated value. Take the answer and divide it by that same estimated value figure. You’ll arrive at your percentage of equity. (The higher the better!)
Strive for a Strong Credit Score
A top credit score is another good thing to possess when you’re trying to land a great home equity loan interest rate. Lenders look for scores of 680 or higher, and the higher your credit score, the more easily you can access the most advantageous loan terms. Borrowers with credit scores above 700 tend to score the best rates.
You can improve your score by making timely payments on your bills, reducing your credit card balances, and steering clear of new debt. Your chances to qualify for a home equity loan with a favorable interest rate will grow as you become more in control of your own financial security.
Manage Debt-to-Income Ratio
Another essential strategy for getting beneficial loan terms is to improve your DTI ratio. You can do this by working to pay down your existing debt, increasing your income, or both.
Lenders like DTI ratios of 50% or less, and will look at you longingly if you have one that is 36% or lower. Managing your DTI effectively comes with a big payoff. You’ll easily qualify for a loan you want and increase your chances of getting a great interest rate.
Secure an Adequate Property Insurance Policy
Nailing down solid insurance on your property is a must-do if you want to qualify for a home equity loan. Your coverage needs to be active and comprehensive, so keep it up to date. This is not a factor you want to take risks with. Your property insurance is the safety net that will protect both you and your lender should damage strike your home.
Current home equity loan rates by state.
Compare current home equity loan interest rates by state and find a home equity loan rate that suits your financial goals.
Select a state to view current rates:
Closing Costs and Fees
If you’re thinking about the closing costs on home equity loans, you’re right — they do add to your costs when you take out a loan. You’re likely to pay 2% to 5% of the loan amount by the time your loan closes. This table shows you how typical loan closing costs break down.
Service
Typical Fees
Appraisal
$300-$500
Credit report
$30-$50 or more
Document prep
$100-$500
Loan origination
0.5%-1.0% of the loan amount
Notary
$20-$100
Title insurance
0.5%-1.0% of the loan amount
Title search
$75-$250 or more
Lenders do sometimes offer no-closing-cost loans, but these frequently come with higher interest rates. Do the math and see how much interest you will pay over the life of any potential loan before you spend time on the application.
Tools & Calculators
Online tools and calculators can make your life easier as you look for the best home equity loan rates. Try out multiple tools, including a home equity loan calculator — it will figure out the maximum loan amount you’re likely to qualify for.
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.
Tax Deductibility of Home Equity Loan Interest
Is the interest you pay on your home equity loan tax-deductible? It may be in 2025, as long as you use the funds to improve your home. Single filers can deduct the interest they pay on the first $375,000 of loan debt. Married couples filing jointly can deduct interest on up to $750,000 of loan debt. You’ll need to itemize your expenditures if you want to take advantage of these deductions. A tax advisor can help you figure out what makes sense for you.
Home Equity Loan Alternatives
If you are not sure you’re sold on a home equity loan, stick with us. You can consider a cash-out refinance or a home equity line of credit (HELOC), too. A cash-out refinance lets you take out a new mortgage for a sum larger than what you owe on your existing home loan, and you receive the difference as a lump sum to use as you wish. A HELOC lets you apply for a credit limit secured by your home and borrow against as you need to. You pay interest only on the cash you draw out.
What is a home equity line of credit? Often referred to as a HELOC, it’s a lot like a credit card. HELOCs offer homeowners a flexible freedom to borrow up to a set limit and pay interest on the money only when they actually use it. Usually, you can pull out funds during a “draw” period at the beginning, which is followed by a repayment period. At that point, you have to repay both the principal and the interest.
HELOC rates are adjustable, generally, unlike those on home equity loans. HELOC lenders often tout the product’s flexibility, but keep in mind that with an adjustable interest rate, your rate and payments may change — and your costs go up — down the line. Qualifying for a HELOC often requires a credit score of 680 or higher and a DTI ratio below 50%. A HELOC may let you borrow up to 90% of your home equity.
Want to know what your monthly payment would be on a hypothetical HELOC? Do your research and then run some probable loan amounts, annual percentage rates (APRs), and loan terms through a HELOC monthly payment calculator. When you play around with different interest rates and payment terms, you’ll see how they can affect your payments. Ultimately, this may help you understand how much of a loan you can afford.
Just want to calculate how much interest you’d have to pay during a HELOC’s “draw” period? Try a HELOC interest-only calculator.
Cash-Out Refinance
This strategic mortgage refinance allows you to swap your original mortgage for a larger one, and receive the difference in a lump sum. Rates on cash-out refis may be fixed or adjustable. These are easier to qualify for, generally, than a home equity loan or a HELOC. Lenders’ criteria vary, but cash-out refis often require a 620 minimum credit score and a 43% or less DTI ratio.
If you are considering applying for a home equity loan in Honolulu, understanding interest rates and how they work will help you find and negotiate the very best terms. Your equity level, credit score, and DTI ratio will all play a role in the process, and shopping around can go a long way.
If you decide that a home equity loan isn’t the right fit, HELOCs and cash-out refis both have unique benefits that make them worth a look.
SoFi now offers home equity loans. Access up to 85%, or $350,000, of your home’s equity. Enjoy lower interest rates than most other types of loans. Cover big purchases, fund home renovations, or consolidate high-interest debt. You can complete an application in minutes.
Unlock your home’s value with a home equity loan from SoFi.
What are the most common uses for home equity loans?
A home equity loan is versatile. People use them to borrow in order to finance major expenses like home improvements or essential purchases, or to ease high-interest debt consolidation. Every borrower should use the funds wisely and make sure the loan fits into their financial long game.
What will monthly payments look like on a $50,000 loan?
A $50,000 loan’s monthly payment will heavily depend on not only the interest rate, but the loan term. If you get a loan at a 7.00% interest rate with a 15-year term, your monthly payment would be $449. At a 9.00% rate over 15 years, the payment would be more — about $507. A loan calculator can help you figure out monthly payments with other variables for comparison.
What stops a borrower from getting a home equity loan?
A few factors could interfere with securing a home equity loan. Lenders typically require a minimum credit score of 680, so if you have a lower one, it could disqualify you off the bat. Another number that could nix your loan is a high debt-to-income (DTI) ratio – usually over 50%. If you have less than 20% equity in your home, that will probably be a red flag for lenders, too. They will also no doubt look at how stable your home’s value is and how comprehensive a property insurance plan you are carrying. Remember that requirements always vary among lenders.
What are some key benefits of a home equity loan?
Fixed interest rates, to start. Home equity loans often come with them, meaning they are going to have predictable monthly payments that make budgeting easier. Since those fixed rates are usually lower than rates on unsecured personal loans, they are also cost effective, and a good choice for significant one-time expenses like home renovations or high-interest debt consolidations. Look at these benefits alongside the potential risks, though. A stable interest rate won’t protect you from the threat of foreclosure if you can’t make your payments.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945. All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee. Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice. Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
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.
✓ Access up to 85% or $350K of your home’s equity.
✓ Keep your current home loan interest rate.
✓ $0 origination fee options.1
✓ Fixed rates and flexible terms.
View your rate
Checking your rate will not affect your credit score.
Checking your rate will not affect your credit score.
✓ Access up to 85% or $350K of your home’s equity.
✓ Enjoy lower rates for consolidating debt or home upgrades.
✓ Get flexible terms that work for you.
View your rate
Checking your rate will not affect your credit score.
Answer a few questions online to help us assist you better.
Get paired with a dedicated Mortgage Loan Officer.
You’ll be connected with an experienced SoFi Mortgage Loan Officer who’s ready to help you get the best home equity loan for you.
Submit your application.
Your SoFi Mortgage Loan Officer will help you submit your home equity application so you can get access to your cash.
Get started
{/*what is a he loan*/}
What is a home equity loan?
Home equity loans let you borrow money by leveraging the equity in your home. They’re one of the most affordable financing options since home equity rates are lower than interest rates for most other types of loans. These lower interest rates can help fund big purchases, home renovations, or consolidate high-interest debt.
Learn more
You could save thousands with a SoFi home equity loan.
The savings claim above is based upon using a SoFi Home Equity Loan to pay-off credit card balance of $60,000. We assume a credit card APR of 24%. The savings shown assumed payments of only the interest due. We compare that against an assumed SoFi Home Equity Loan of $60,000 (to pay off the credit card) with an APR of 7.29%. Annual interest savings assumes you pay both loans on time. You might not be eligible for the home equity loan and, if you are eligible, your APR rate could be higher. Eligibility and the lowest APR rate depend on credit worthiness, income, and other factors. The 24% APR is the average credit card APR reported by Wallethub for Q1 March 2025 under their Good Credit category.
{/*requirements*/}
Home equity loan requirements:
View your rate
Checking won’t affect your credit score.†
{/*horizon*/}
{/*popular uses*/}
A home equity loan could help with that.
Pay down high-interest debt.
You could save on your monthly payments when you consolidate credit cards or other unsecured loans into one lower rate.
Fund home improvements.
Make your dream kitchen a reality without having to take on high-interest debt.
Make big purchases.
Tuition, weddings, and vacations can get expensive. Instead of putting them on a high-interest credit card, a home equity loan could help you save on monthly payments.
Keep your current mortgage as is, no need to refinance. And for qualified borrowers, there are options to access your home’s equity.
Finance almost anything with up to $350K.
Access up to $350,000 of your home’s equity (up to 85%) to finance home improvements or consolidate debt.
Lower your monthly payment.
You could save compared to a high- interest credit card or unsecured personal loan.
Get dedicated one-on-one support.
You’ll have a dedicated SoFi Mortgage Loan Officer to help you find the right loan option for you.
“Austin and his team were awesome and easy to work with! Great communication and follow up. Kept us in the loop every step of the way! I would go back to Austin without question.”
“Spencer and his team totally went to bat for us and got our loan processed. Very happy with him and his teams efforts and follow up. Communication was excellent right up to the loan funding.”
“Mark and his team worked very closely with us to make sure that we were comfortable with the process, understood the expectations, timeline and overall schedule.”
Compare current home equity loan rates by state and find a home equity loan rate that suits your financial goals.
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FAQs
How does a home equity loan work?
To start, you’ll need to have sufficient home equity, which is the difference between the market value and what you owe. You may have built home equity by paying down your mortgage and by seeing your home appreciate. You’ll go through an application process, and the lender will likely order a home appraisal to ensure that there’s enough value there to lend against. You’ll have a lot more paperwork than some other loans and will sign mortgage lien documents that give the lender the right to start proceedings should you fail to make payments. After closing on the loan, you’ll receive all funds upfront. Repayment starts shortly after.
First, assess your financial situation – consider your income, how much equity you have available, if you have at least a “good” FICO® score, and your debt-to-income ratio. Exploring different loan options is encouraged!
Once you’ve found a fitting loan and are ready to apply, you’ll go through the application process, where you’ll submit information about your income, current mortgage, insurance, and other details the lender requests. If everything checks out, you’ll be able to close on your loan! Funds are disbursed around three business days after closing on the loan.
On a home equity loan where the funds are disbursed upfront and your interest rate is locked, the first payment will be due around 30 days after you close the loan.
How do I qualify for a home equity loan?
Home equity loans are contingent on income, credit history, and debt-to-income ratio. LTV is also considered. LTV compares the amount you owe against your home with its current value. Lenders usually want to see an LTV no higher than 80%. (LTV = Loan Value ÷ Property Value.) On a $400,000 home, for example, that means that you should owe no more than $320,000.
How long does it take to get a home equity loan?
It can take an estimated 30 days to close your loan. Funds are disbursed around three business days after closing on the loan. On a home equity loan where the funds are disbursed upfront and your interest rate is locked, the first payment will be due around 30 days after you close the loan.
What is the interest rate on a home equity loan?
A home equity loan offers a low interest rate because it uses your home’s equity to secure the loan. Because of the way it works, you may have access to a larger sum of money at a lower interest rate than you would if you used another source, such as a credit card. View your home equity rate here.
How much can I get with a home equity loan?
When it comes to how much home equity you can tap, many lenders allow a maximum of 90%, although some allow less, and some, more. In other words, your loan-to-value ratio shouldn’t exceed 90% in many cases.
If you’re taking out a second mortgage like a home equity loan or HELOC, your first mortgage and the equity loan compared with your home value is what is called the combined loan-to-value (CLTV) ratio. Most lenders will require a CLTV of 90% or less to obtain a home equity loan, although some will allow you to borrow 100% of your home’s value. For a better idea of exactly how much you can borrow, use SoFi’s Home Equity Loan Calculator.
A home equity line of credit (HELOC) is a credit line secured by the value of your home, minus any existing mortgage owed. You can borrow against it, spend, repay, and borrow again using your home as collateral.
What is the difference between a HELOC vs home equity loan?
A HELOC is a revolving line of credit. You can take out money as you need it, up to your approved limit, during the draw period. You may be able to make interest-only payments on the amount you withdraw during that time, typically 10 years. A home equity loan is another type of second mortgage that uses your home as collateral, but in this case, the funds are disbursed all at once and repayment starts immediately. It is usually a fixed-rate loan of five to 30 years, and monthly payments remain the same until the loan is paid off.
It is rare to have both a HELOC and a home equity loan. One would be a second mortgage and the other would be a third mortgage. Few banks are willing to lend money on a third mortgage, and for any that do, the interest rate would be high.
• Home equity loan rates are impacted by the Federal Reserve’s monetary policy, along with aspects of the borrower’s creditworthiness.
• Compare rates from multiple lenders in order to find the best deal and terms.
• Boost your credit score and reduce your debt-to-income (DTI) ratio, and you’ll most likely see the rates you’re offered drop.
• You will need 20% equity in your home, or more, to qualify for a home equity loan.
• Choose fixed rates for predictable monthly payments. Adjustable rates can offer you more flexibility.
• Interest on home equity loans may be tax-deductible, but in 2025 you’ll need to use the funds to pay for home-related expenses.
Introduction to Home Equity Loan Rates
What is a home equity lon? First off, it’s a great way for homeowners to access the value they have built in their homes. It’s an option that many people with strong equity use to relieve pressure when they need cash.
In this article, we’ll cover everything you need to know about home equity loans. We’ll discuss factors affecting loan rates and offer you some tips on getting the best rates possible. We’ll also explain some different types of home equity loans, including home equity lines of credit (HELOCs) and cash-out refinances, so you can be aware of alternatives, and the pros and cons of each.
Whether you want to pay for a home renovation, make a major purchase, or consolidate your high-interest debt, understanding home equity loan rates in Springfield can help you make smart financial decisions and set you up for a stable economic future.
How Do Home Equity Loans Function?
Assuming you’re still paying off your original mortgage, a home equity loan would be considered a second mortgage. It will let you tap into your home’s equity and receive a lump sum of cash, which you immediately begin to repay in fixed monthly installments, usually over five to 30 years. The loan is secured by your home, so you’ll have access to lower interest rates than an unsecured personal loan would offer you.
One important thing you should not forget: In order to draw on your home equity, you have to actually have equity in your home. You can still be working to pay off your mortgage, but the money you owe now shouldn’t be more than your house is worth. Lenders typically want you to have a minimum of 20% equity in your home, and without that, you may not qualify.
HELOCs vs Home Equity Loans
A HELOC vs. home equity loan is where many homeowners begin their comparisons in search of the right loan to pull equity from their home. Here’s how these two types of loans compare. A home equity loan’s interest rate is often fixed, giving you the peace of mind of predictable payments.
Repay only what you borrow plus interest; you may have the option to make interest-only payments during the draw period.
Starts immediately at a set monthly payment
Disbursement
Charge only the amount you need
Lump sum
If you have been paying down your mortgage diligently and keep wondering just how to get equity out of your home, a home equity loan could be the perfect option for you.
Where Do Home Equity Loan Interest Rates Come From?
Rates you might be offered when shopping for a home equity loan are a product of many influences, from your personal financial standing to the broad economic landscape.
Federal Reserve policy — including U.S. federal funds rate changes — can send ripples through the lending market, causing changes that may impact the prime rate. When the prime rate moves up or down, home equity loan rates do, too. Keep an eye on these factors and you’ll be better prepared to anticipate rate shifts and make an informed call on when to pursue a home equity loan.
Your credit score and DTI ratio also drive the rates you’re quoted when you shop around as a potential borrower. Whether you know it or not, you have more control over these things, so be prepared. You will have a better outcome applying for a home equity loan if you’ve spent time and effort working to improve them.
How Interest Rates Impact Home Equity Loan Affordability
The interest rate you receive on your home equity loan can make a huge difference in how affordable it will be as you’re paying it down. What do you need to know? Even a seemingly small reduction in rate — a half of a percentage point truly matters — can lead to significant savings, or additional cost in the case of a rate increase.
To demonstrate how much an interest rate will impact the cost of your loan, the chart below shows both monthly payment amounts and total interest on a $75,000 home equity loan with a 20-year repayment term. We’ve calculated the monthly payment and the total interest you would pay at a few rates for easy comparison.
At an 8.00% interest rate, your monthly payment would be approximately $627, and the total interest you would pay over the loan’s term would add up to $75,559. If the interest rate on your loan was one percentage point lower, at 7.00%, the monthly payment would be about $581, and interest would total $64,554. You did the math right: The lower rate could save you $11,005 in interest over the entire loan term.
Interest Rate
Monthly Payment
Total Interest Paid
8.00%
$627
$75,559
7.50%
$604
$70,007
7.00%
$581
$64,554
Fixed vs Adjustable Interest Rates
Home equity loans most often come with fixed interest rates. But some Springfield lenders may also offer adjustable rates, and different home equity financing such as home equity lines of credit (HELOCs) and cash-out refinances also offer adjustable rates. That’s why it’s a good idea to stop and consider which you prefer.
A fixed rate never changes throughout the loan’s life, giving you the assurance of consistent monthly payments as you pay it off. Such predictability is a great tool for budgeting and financial planning over the long term.
Adjustable rates are often advertised, and start off, a bit lower than fixed rates. But after an initial period, these variable rates change in accordance with the market. These fluctuations can lead to higher payments for you. They can also create uncertainty about what you can expect over the life of the loan.
When you think about home equity loan rates, it’s wise to consider the merits of fixed rates versus adjustable rates. The variety of rate you choose should take into account your financial standing and your comfort with risk.
Home Equity Loan Rate Trends
Predicting interest rate movement is like a day at the races – it’s impossible to know what will happen with real certainty. But if you look at trends in recent history, they can give you a better sense of how rates move, and help you assess what may be coming.
Let’s look at the prime rate, which is a pivotal driver of home equity loan rates. Its recent timeline shows you just how changeable it can be. As you can see in the chart below, it dropped to 3.25% in 2020, then steadily rose to 8.50% in 2023 before dropping again in 2024.
As we have mentioned, fluctuations like this impact the rates you may encounter in Springfield. Staying in the know about developing financial trends and working on your financial standing may help you time your application to sync with favorable economic conditions, even though they are reliably unpredictable. With luck, you may be able to score competitive rates.
How to Qualify for the Lowest Rates
To grab the most competitive home equity loan rates offered by Springfield lenders, you’ll want to keep a few factors in mind. Take these steps before beginning the application process, and you may be able to position yourself to land an interest rate that is favorable and manageable.
Accrue Home Equity
If you want to qualify for a home equity loan, you’ll need at least 20% equity in your home. To figure out your level of equity, simply subtract the outstanding balance on your mortgage from the estimated value of your home, then divide the answer by the same estimated value figure to arrive at your percentage of equity. The higher that percentage is, the better shape you’re in.
Build a Strong Credit Score
To land the very best home equity loan rates available, you’ll need a robust credit score. Lenders tend to look for a score of 680 or higher — and many require a score over 700 to get their most favorable rates. Higher scores are viewed by lenders as signs of financial competence. They can open doors to favorable loan terms. Make timely payments on your bills, reduce credit card balances, and steer clear of new debt to boost both your credit score and your chance of qualifying for a home equity loan with a lower interest rate.
Manage Debt-to-Income Ratio
Your DTI ratio is important, too, when it comes to qualifying for a home equity loan and getting a great rate. Lenders prefer to see a DTI ratio of 50% or less, and if yours is 36% or lower, you may qualify for lower rates. How can you manage your DTI effectively in Springfield? Make efforts to pay down your debt, increase your income, or a combination of the two.
Get Adequate Property Insurance
Property insurance is a must if you’re trying to qualify for a home equity loan. Insurance gives both you and the lender a safety net should your home suffer damages of any kind, so make sure your coverage is comprehensive.
Current home equity loan rates by state.
Compare current home equity loan interest rates by state and find a home equity loan rate that suits your financial goals.
Select a state to view current rates:
Tools & Calculators
A variety of online tools and calculators exist to ease your search for the best home equity loan rates. They make calculations and budgeting simple. You’ve got multiple tools to choose from.
Here’s one you can explore: A home equity loan calculator shows you just how big a loan you might qualify for. This nifty tool can give you a clear picture of what to expect, and help you ensure you won’t overextend yourself financially.
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Closing Costs and Fees
When it comes to the cost of closing on a home equity loan, you should expect to pay 2% to 5% of the loan amount. The table below shows you some typical prices on the menu, with approximate costs.
Service
Typical Fees
Appraisal
$300-$500
Credit report
$30-$50 or more
Document prep
$100-$500
Loan origination
0.5%-1.0% of the loan amount
Notary
$20-$100
Title insurance
0.5%-1.0% of the loan amount
Title search
$75-$250 or more
While some lenders may offer no-closing-cost loans, they often come with higher rates, which are likely to add to your total interest paid over the life of the loan.
Tax Deductibility of Home Equity Loan Interest
Interest you pay on your home equity loan may be tax-deductible, but you’ll need to use the funds to improve your home. For single filers, interest paid on the first $375,000 of loan debt is deductible. Married couples filing jointly can deduct interest on up to $750,000 of loan debt. Plan ahead! You’ll need to itemize expenses if you want to take advantage of this option, so save your receipts. A tax advisor can help you figure out what works best for your situation.
Alternatives to Home Equity Loans
A home equity loan isn’t the only way to leverage your home’s value. You can also consider a cash-out refinance or a home equity line of credit (HELOC). A cash-out refinance involves taking out a new mortgage for a larger sum than your existing home loan. You receive the difference as a lump sum. A HELOC lets you apply for a credit limit, secured by your home, and borrow against it as needed. You will pay interest only on the cash you draw.
A cash-out refinance is a strategic mortgage refinance, in which you swap your original mortgage for one in an amount larger than what you currently owe — and receive the difference in a lump sum. Rates on cash-out refis might be fixed or adjustable. Usually it’s easier to qualify for a cash-out refi than for a home equity loan or a HELOC. Lenders’ standards vary, but cash-out refis often require a 620 minimum credit score and a DTI ratio of 43% or less.
Home Equity Line of Credit (HELOC)
What is a home equity line of credit? A HELOC is like a credit card. It offers homeowners the freedom to borrow up to a set limit and pay interest just on what they use. You can sometimes pull funds out during an initial “draw” period, followed by a repayment period when you must repay both the principal and interest. HELOC rates are generally adjustable. Unlike a home equity loan, a HELOC is about flexibility. And adjustable interest rates mean rate and payments can fluctuate, most likely impacting your costs down the line.
Qualifying for a HELOC generally requires a credit score of 680 or higher (700 is even better) and a DTI ratio ideally below 36% (but not over 50%). A HELOC may let you borrow up to 90% of your home equity equity you have in your home. If you want a look at the loan and how it would look as you pay it down, put together some hypothetical numbers and plug them into a HELOC repayment calculator.
Just want to know how much the monthly payments would be on your hypothetical HELOC? Run some figures on a HELOC monthly payment calculator. You can play around with different interest rates and terms to find out how they might affect your payments, and how much of a loan you can afford. And if you’d like to calculate how much interest you’d have to pay during the “draw” period of a HELOC, try out a HELOC interest-only calculator.
If you’re thinking about applying for a home equity loan in Springfield, it’s smart to build an understanding of key factors that are going to drive interest rates. Your credit score, DTI ratio, and equity level all play a role in the rate you’ll be trying to qualify for. Simply shopping around also goes a long way toward getting the best rate available. And if you decide that a home equity loan isn’t a fit, remember that HELOCs and cash-out refis have their own benefits.
SoFi now offers home equity loans. Access up to 85%, or $350,000, of your home’s equity. Enjoy lower interest rates than most other types of loans. Cover big purchases, fund home renovations, or consolidate high-interest debt. You can complete an application in minutes.
Unlock your home’s value with a home equity loan from SoFi.
Popular reasons why people pursue home equity loans include wanting to pay for home improvements and consolidate high-interest debt. If you decide to apply for a home equity loan, think about whether the loan fits into your larger financial picture and use the funds responsibly.
What would the monthly payments look like on a $50,000 loan?
Thinking of taking out a $50,000 home equity loan? The amount of your monthly payment may vary. It depends on the interest rate and the loan term. If you got a 7.00% interest rate on the loan and a term of 15 years, for example,your monthly payment would be about $449. A 9.00% interest rate loan over a 15-year term would require a payment of around $507 monthly. A loan calculator can help you figure out what monthly payments would be required — just plug in different variables.
What could prevent you from getting a home equity loan?
A number of factors could stop you from securing a home equity loan. First, lenders typically want to see a minimum credit score, generally around 680; having a lower one may disqualify you. A high DTI ratio – usually over 50% – might also foil your loan. If you have less than 20% equity in your home, that could be a red flag for lenders, too. They will also look at how stable your home’s value is and how comprehensive your property insurance plan is. Qualifications vary from lender to lender, but these are common disqualifiers.
What are the biggest benefits of a home equity loan?
Home equity loans often come with fixed interest rates. That means they have predictable monthly payments, which makes budgeting easier. They also tend to have lower rates than unsecured personal loans, making them cost-effective for significant one-time expenses, like home improvements or debt consolidation. Be sure to balance the benefits with potential risks, including home foreclosure if you can’t make your payments.
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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 .
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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