Current Home Equity Loan Rates in Portland, OR Today
PORTLAND HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in Portland, OR.
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 Portland.
Key Points
• Home equity loan rates are influenced by the prime rate and each borrower’s financial profile.
• Even a one-percentage-point difference in rates can lead to thousands of dollars in savings or to higher interest payments.
• Home equity loans usually come with fixed interest rates, while a home equity line of credit offers variable rates.
• If you’re after the most favorable rates, set your sights on a credit score of 700 or higher and a debt-to-income ratio under 36%.
• The interest on home equity loans could be tax-deductible if funds are used for significant home improvements.
Introduction to Home Equity Loan Rates
Home equity loans are a powerful financial resource for homeowners who want to get equity out of their home without selling the property. In this guide, we’ll delve into home equity loan rates, detailing how they’re calculated and what variables can influence them. You’ll learn how to examine rates, see the upsides and downsides of these loans, and find out about alternative options. Armed with this knowledge, you’ll be better equipped to make smart financial choices.
Let’s begin by understanding what a home equity loan is in more detail.
Recommended: What Is a Home Equity Line of Credit?
How Do Home Equity Loans Work?
A home equity loan is a second mortgage that uses your home as collateral, providing a lump sum that you can use for various purposes. Many people borrow against their home to cover renovations or education expenses, or to access funds to pay off higher-interest debt. The funds you borrow will be disbursed all at once and you’ll begin repaying the loan immediately, plus interest, in equal monthly installments over five to 30 years. Because the loan is secured by your home, rates are typically lower than unsecured personal loans. This means that missed payments could put you at risk of foreclosure.
To qualify, homeowners should have at least 20% equity in their primary residence. Many lenders allow borrowing up to 85% of this equity. Qualifying for a home equity loan is similar to getting a typical home loan. You should shop around and get rate quotes from various lenders. The lenders will be sizing you up too, looking at your credit score, debt levels, and other factors. If you want to get a preview of what loan you might be able to qualify for, try plugging your numbers into a home equity loan calculator.
Where Do Home Equity Loan Interest Rates Come From?
Interest rates on different types of home equity loans are influenced by a variety of economic and individual factors. The Federal Reserve’s policies influence the prime rate, which in turn plays a significant role in the rates lenders set. But the lender’s basic rate is only a starting point. Additionally, a borrower’s credit score and debt-to-income (DTI) ratio are influential in determining the precise interest rate they will be offered.
Loan amount and repayment term also come into play; generally, larger loan amounts and longer terms mean higher rates due to the increased risk for the lender. Understanding these factors can help you make informed decisions about your home equity loan rates.
How Interest Rates Impact Affordability
Interest rates are a big deal when it comes to the overall cost of your home equity loan. Even a seemingly small difference in rates can add up to significant extra payments over time. Consider this: a $100,000 home equity loan with a 15-year repayment term. At 8.50% interest, your monthly payment would be $985, with a total interest payment of $77,253. But at 9.50%, the monthly payment jumps to $1,044, and the total interest paid increases to $87,960. That’s a $10,700 difference in interest over the life of the loan. It’s clear that nabbing the best home equity loan rates is a smart move.
Home Equity Loan Rate Trends
Predicting interest rate movements is like trying to forecast the weather — there are many factors at play. However, by examining recent trends and tuning into the news, you can glean valuable insights. Watch the prime rate. This pivotal marker for home equity loan rates has been on a rollercoaster, plummeting to 3.25% in 2020 and then rising to 8.50% in 2023. These fluctuations ripple through the rates you encounter in Portland, so keeping an eye on the prime rate can help you secure the best deal.
Source: TradingView.com
| Date | Prime Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.50% |
| 9/27/2018 | 5.25% |
Source: St. Louis Fed
How to Qualify for the Lowest Rates
To obtain the most attractive home equity loan rates, your credit score and DTI ratio are key. Try to fine-tune these and other factors by taking a few steps before filing your first loan application.
Maintain Sufficient Home Equity
You need at least 20% equity in your home to be eligible for a home equity loan. To figure out your equity, simply subtract your outstanding mortgage balance from your estimated home value. Then divide the answer by the estimated home value to arrive at a percentage of equity. The higher it is, the better off you’ll be.
Build a Strong Credit Score
To land the most competitive home equity loan rates in Portland, you’ll want a credit score of 680 or higher. Lenders will be looking at your payment history, credit utilization, and the length of your credit history. Make a habit of paying your bills on time and keeping credit card balances in check. Hold off on opening new credit accounts or closing old ones in the months before you apply.
Manage Debt-to-Income Ratio
Your DTI ratio is an important metric when you’re trying to secure a home equity loan. Most lenders look for a DTI ratio under 50%, with an ideal target of 36% or lower. To determine your number, add up all your monthly debt payments and divide by your gross monthly income. A lower DTI ratio is a sign to lenders that you’re in a good position to handle monthly loan payments. To improve your ratio, consider paying down existing debts, boosting your income, or even a combination of both. A well-managed DTI could lead to more favorable rates and terms for your home equity loan.
Obtain Adequate Property Insurance
Property insurance is usually a must-have for home equity loans. This insurance is a safety net for both you and the lender should any damage occur. Make sure your coverage is up to snuff.
Tools & Calculators
A home equity loan calculator can give you a ballpark figure of your monthly payments based on the loan amount, interest rate, and term. And that’s just one of the calculators you might find useful as you explore home equity lending. Check out these tools:
Run the numbers on your home equity loan.
-
Home Equity Loan
CalculatorEnter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment
CalculatorPunch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Closing Costs and Fees
Closing costs are part of the loan process, just as they were when you bought your house. Home equity loan closing costs and fees typically range from 2% to 5% of the loan amount. Included are fees for the appraisal, credit report, document preparation, loan origination, notary, title search, and title insurance. Always compare fees when you look at loan offers; they can vary greatly from lender to lender.
Tax Deductibility of Home Equity Loan Interest
Here’s a tip: The interest on home equity loans could be tax-deductible if you’re using the funds to buy, build, or significantly improve your home. This tax perk is good through 2025, and there’s a chance it might stick around. If you’re married and filing jointly, you can deduct interest on home equity loans up to $750,000; for single filers, it’s up to $375,000. Remember, to claim this deduction, you’ll need to itemize your tax return. If you’re not sure how this applies to you, a quick chat with a tax advisor can help you understand the benefits you might be missing.
Alternatives to Home Equity Loans
While a home equity loan is a common choice, there are other options to explore, including a home equity line of credit (HELOC) and a cash-out refinance, which is a special kind of mortgage refinance. Let’s take a closer look at both:
Home Equity Line of Credit (HELOC)
A HELOC is like a credit card guaranteed by your home. It’s a flexible way to borrow what you need, when you need it. You’ll pay interest only on the portion of the credit line that you actually use. During the HELOC’s “draw” period, usually 10 years, you likely won’t have to pay down the principal unless you want to do so. (A HELOC interest-only calculator can allow you to see what it would cost to just pay interest during this period.)
After the draw period is the repayment period, when you repay all that you owe, with interest. One key difference between HELOCs and home equity loans: HELOCs tend to have a variable interest rate. So monthly payments aren’t always the same amount. You can put your balance and current rate into a HELOC monthly payment calculator, and it will give you a sense of what you might owe.
To qualify for a HELOC, a credit score of 680 is a common benchmark, but aiming for 700 is even better. Keep your debt-to-income ratio under 50% — and ideally, under 36%. Most lenders will let you borrow up to 90% of your equity.
Cash-Out Refinance
A cash-out refinance replaces your current mortgage with a larger one, giving you a lump sum based on your home equity. Most lenders will let you borrow up to 80% of your equity. With a credit score of 620 or above and a DTI ratio under 43%, you could choose a fixed or variable interest rate. Unlike home equity loans, cash-out refinances consolidate your debt into one monthly payment. They’re generally easier to qualify for than home equity loans or HELOCs, making them an attractive option for homeowners. If you’re considering a refinance, you’ll just want to compare the costs to what you would pay if you stuck with your original mortgage. If you have a very low rate on your current loan, refinancing might not be the best option.
Here’s a quick look at a HELOC vs. a home equity loan and a cash-out refinance.
| Home Equity Loan | HELOC | Cash-Out Refinance | |
|---|---|---|---|
| Borrowing Limit | Up to 85% of borrower’s equity | Up to 90% of borrower’s equity | 80% of borrower’s equity for most loans |
| Interest Rate | Fixed | Generally variable | May be fixed or variable |
| Type of Credit | Installment loan: Borrowers get a specific amount of money all at once that they then immediately begin repaying, with interest, in regular installments. | Revolving credit: Borrowers receive a line of credit. They have a draw period (5-10 years) during which they borrow and can only pay interest, followed by a repayment period (10-20 years) to repay the principal plus interest. | Installment loan: Borrowers receive a lump sum payment from the excess funds of their new mortgage, which has a new rate and repayment terms. |
| Repayment Term | Generally 5-30 years | A draw period of 5-10 years, followed by a HELOC repayment period of 10-20 years | Generally 15-30 years |
| Fees | Closing costs (typically 2-5% of the loan amount) | Closing costs (typically 2%-5% of the loan amount), plus other possible costs, depending on the lender (annual fees, transaction fees, inactivity fees, early termination fees) | Closing costs (typically 2-5% of the loan amount) |
The Takeaway
When you’re considering a home equity loan in Portland, it’s important to understand the factors that can influence the rates you’re offered. Having a strong credit score, a manageable DTI ratio, and good property insurance coverage can help you qualify for better rates. Of course, you’ll want to explore alternatives like a HELOC and a cash-out refinance to find the best option for your finances. Whatever type of loan you choose, it’s a good idea to get quotes from multiple lenders to find the most attractive rate possible.
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.
FAQ
What are the common uses of home equity loans?
Home equity loans are incredibly versatile and can be used for a variety of purposes, such as making a major purchase, financing home improvements, or consolidating high-interest debt. However, make sure to handle the funds with care and run the numbers so that the monthly payments fit comfortably in your budget.
What would the monthly payments be on a $50,000 home equity loan?
The monthly payment for a $50,000 home equity loan varies with the interest rate and the term of the loan. With an 8.00% interest rate, for instance, a 10-year loan would have a $607 monthly payment. Choose a 20-year term, and that monthly amount drops to about $418. Consider your budget and goals to pick the term that suits you best.
What’s the monthly payment on a $100,000 HELOC?
During the draw period, which can last up to 10 years, you pay only the interest on the amount you’ve borrowed. So if you used $50,000 of your $100,000 credit line and had a 5.00% interest rate, your monthly interest-only payment would be around $208. But if you borrowed the entire $100,000 at 5.00%, you would owe $417 per month during the draw period. Keep in mind that HELOC interest rates are variable, so exact monthly payment amounts would vary, too.
What might prevent you from securing a home equity loan?
There are a few factors that could prevent you from obtaining a home equity loan. Lenders often look for a minimum credit score of 680. A high DTI ratio, typically over 50%, might raise concerns. Home equity of less than 20% could also be a barrier. Take steps to address these issues before applying to boost your chances of approval.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SOHL-Q324-278
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 San Antonio, TX Today
SAN ANTONIO HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in San Antonio, TX.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Compare home equity loan rates in San Antonio.
Key Points
• Home equity loan rates in San Antonio are influenced by a variety of factors, including economic conditions and your creditworthiness.
• If you have a credit score of 700 or higher and a debt-to-income ratio below 36%, you’re in prime position to snag a great rate.
• Fixed rates give you the peace of mind of knowing your monthly payments won’t change.
• The interest on home equity loans may be tax-deductible if you’re using it to significantly improve the property.
• A home equity line of credit or a cash-out refinance are other ways to borrow based on home equity.
Introduction to Home Equity Loan Rates
Home equity loans are a smart way for homeowners to borrow money by tapping into the equity they have built up in their home. But before you take the first steps toward getting equity out of your home, it helps to understand the forces that impact what kind of home equity loan rate you’ll be offered. Here, we’ll break that down, explaining how current home equity loan rates are formed and what you can do to get your best possible rate in today’s market. Let’s start by looking more closely at what a home equity loan is in the first place.
How Do Home Equity Loans Work?
A home equity loan is a loan guaranteed by your home. In fact, it’s a second mortgage (assuming you are still paying off your first home loan). You can get a lump sum of money based on the equity you have in your home. Common uses for a home equity loan include paying for home improvements and debt consolidation. The interest rates are typically lower than those of unsecured loans, but failure to repay can result in foreclosure. And you’ll begin repaying the loan immediately. These loans usually have a fixed interest rate, so monthly payments are the same for the life of the repayment term, which can be anywhere from five to 30 years.
Most lenders require borrowers to have at least 20% equity in their home to qualify. Some lenders may allow you to borrow up to 85% of your equity. A home equity loan calculator can help you get a sense for how much a lender might be willing to loan to you.
Recommended: What Is a Home Equity Line of Credit
Where Do Home Equity Loan Interest Rates Come From?
The interest rates for different types of home equity loans are influenced by economic factors but also by each borrower’s personal profile. The Federal Reserve’s monetary policies have a ripple effect on lending rates. Lenders often adjust their rates according to the prime rate, which is a reflection of the Fed’s stance. Your credit score, debt-to-income (DTI) ratio, and credit history play a significant role, with higher credit scores typically translating to lower rates. Additionally, larger loan amounts and longer repayment terms may lead to higher rates due to the increased risk for the lender.
How Interest Rates Impact Affordability
Interest rates play a huge role in how affordable your home equity loan will be over the long haul. A change of a fraction of a percentage point, up or down, can make a big difference in your monthly payments and the total you’ll pay in interest over the life of the loan. To get a sense of what that looks like, check out this chart showing different loan amounts, rates, and terms. (The longer the loan term, the lower your monthly payments — but the more interest you’ll pay over the life 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
Given that the prime rate underpins home equity loan rates, you’ll probably be paying close attention to the rate as you think about applying for a loan. Predicting the movement of interest rates is no easy feat, given the many economic variables at play, and the prime rate has seen quite a bit of fluctuation, as you can see from the graphic. Some borrowers will be tempted to try to time their application to coincide with a favorable prime rate. But if you aren’t able to wait out the market, remember that there are other things you can do to get the best available rate.
Source: TradingView.com
| Date | Prime Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.50% |
| 9/27/2018 | 5.25% |
Source: St. Louis Fed
How to Qualify for the Lowest Rates
To secure the most competitive home equity loan rates, take these steps to polish your financial profile before you file your first application:
Maintain Sufficient Home Equity
To qualify for a home equity loan, homeowners are advised to have a minimum of 20% equity in their home. Calculating your home equity is a simple matter of subtracting your current mortgage balance from the appraised value of your home (use an online estimate from a real estate web site).
For instance, if your mortgage balance is $400,000 and your home is valued at $550,000, your home equity would be $150,000. Divide your equity by your home value to arrive at your percentage of equity (in this case, 27%). The more equity you have, the more confident a lender will feel about your financial stability — and the more favorable your loan terms will likely be.
Build a Strong Credit Score
When it comes to home equity loans, a credit score of 680 is often the starting point, but the higher, the better. Those with a history of timely payments, low credit balances, and a diverse credit portfolio are more likely to secure a favorable loan rate and terms. Focusing on your credit score before you apply for a home equity loan is a strategic move that can lead to long-term savings.
Manage Debt-to-Income Ratio
Your DTI ratio is a key number that lenders look at when you’re applying for a home equity loan. (To compute it, total your monthly debts — car payment, student loan, credit card payment, etc. — and divide by your gross monthly income.) Most lenders look for a DTI ratio that’s below 50%, but the lower the better. A DTI ratio below 36% is considered ideal. If your ratio is higher than you’d like, you may want to consider paying down some existing debt or finding ways to increase your income before applying for a home equity loan.
Obtain Adequate Property Insurance
Property insurance is a must-have for home equity loans, particularly in flood-prone areas. This insurance safeguards both you and the lender in the event of property damage. Before the loan is disbursed, lenders may ask for proof of insurance.
Recommended: HELOC vs. Home Equity Loan
Useful Tools & Calculators
Our online tools and calculators can help you understand the financial implications of taking out a home equity loan. Here are three you may find handy at various times during your experience as a homeowner.
Run the numbers on your home equity loan.
-
Home Equity Loan
CalculatorEnter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment
CalculatorPunch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Closing Costs and Fees
When it comes to home equity loans, you’re looking at closing costs that typically range from 2-5% of the loan amount. The costs will likely include appraisal, credit report, document preparation, origination, notary, title search, and title insurance fees. There are “no-closing-cost” home equity loans available, but they often have higher interest rates.
Tax Deductibility of Home Equity Loan Interest
Here’s a tax tip you might appreciate: The interest on your home equity loan could be tax-deductible if you’re using it to buy, build, or significantly improve your home. For those of you filing jointly, you can deduct interest on up to $750,000 of qualified home equity loans, and for single filers, up to $375,000. To claim this deduction, you’ll want to itemize your deductions on your tax returns so it could be a good idea to check in with a tax advisor.
Alternatives to Home Equity Loans
Homeowners have a few options when it comes to tapping their home equity — a home equity loan isn’t the only solution. Here are two other options you might want to consider:
Home Equity Line of Credit (HELOC)
A HELOC provides you with a line of credit, secured by your home, to use when and how you need it. You’ll only pay interest on the portion of the credit line that you actually use. And during the HELOC’s “draw” period, usually 10 years, you likely won’t have to pay down the principal unless you wish to do so. (A HELOC interest-only calculator can help you see what it would be like to just pay interest during this period.)
After the draw period ends comes the repayment period. Then you’ll repay all that you owe, with interest. And here’s a difference between HELOCs and home equity loans: HELOCs tend to have a variable interest rate. So monthly payments can be a bit unpredictable, although putting your balance and a current rate into a HELOC monthly payment calculator will give you a sense of what you might owe.
To qualify for a HELOC, a credit score of 680 is a common benchmark, but aiming for 700 is even better. Keep your debt-to-income ratio under 50% — and ideally, under 36%. Most lenders will let you borrow up to 90% of your equity.
Cash-Out Refinance
A cash-out refinance is a mortgage refinance that replaces your existing mortgage with a larger one, giving you the difference in cash to use however you please. The amount you can borrow depends on the equity you have in your home. Most lenders allow you to borrow up to 80% of your home’s value. You’ll need a credit score of 620 or higher and a debt-to-income ratio of 43% or less to qualify. You can choose between a fixed or adjustable interest rate. As you think about a cash-out refinance vs. a home equity line of credit or home equity loan, one difference is that a cash-out refi will leave you with one monthly payment instead of two.
The Takeaway
When considering a home equity loan in San Antonio, it’s important to build a strong credit score, manage your DTI ratio, and obtain adequate property insurance. Utilize an online calculator to estimate monthly payments so that you can think about how that might fit into your budget. By obtaining quotes from multiple lenders and carefully evaluating rates and terms, you can secure the most favorable home equity loan rates in San Antonio.
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.
FAQ
What’s the monthly payment on a $100,000 HELOC?
The monthly payment on a $100,000 home equity line of credit can vary greatly depending on how much of the credit line you have drawn, whether you are in the HELOC’s draw period (paying interest only) or its repayment period (paying both interest and principal), and what your interest rate is. Your best bet is to put your principal balance and interest rate into an online calculator to compute what you might owe.
What would your monthly payment be on a $30,000 home equity loan?
The payment on a $30,000 home equity loan is determined by the interest rate and term. For example, at a 7.00% interest rate over 15 years, the monthly payment would be approximately $270. This fixed payment covers both principal and interest.
What might prevent you from getting a home equity loan?
There are a few key factors that could prevent you from securing a home equity loan. Lenders often look for a minimum credit score of 680, a debt-to-income ratio of 50% or less, and at least 20% equity in your primary residence. In addition, insufficient property insurance, particularly in flood zones, could also be a disqualifying factor.
What are the benefits of a home equity loan?
Home equity loans come with fixed interest rates and predictable monthly payments. They’re perfect for those big, one-time expenses like home improvements, education costs, or consolidating debt. Given that your home is used as collateral, you’ll often get a lower interest rate with a home equity loan than you would with a personal loan. Tax policy can change from year to year, but through 2025, if you use a home equity loan to significantly improve your home, some or all of the interest could be deductible.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SOHL-Q324-276
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 Wilmington, NC Today
WILMINGTON HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in Wilmington, NC.
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 Wilmington.
Key Points
• The rates for home equity loans in Wilmington are tied to the Federal Reserve’s policies, your credit standing, and the competitive market.
• Comparing rates from a few different lenders can help you get the best deal and terms.
• The best rates are typically reserved for those with a strong credit score (680+) and a debt-to-income ratio below 36%.
• Even a small variance in rates can translate to substantial savings or expenses over the loan’s lifetime.
• Home equity loans often come with fixed interest rates, which can provide you with a sense of stability and predictability.
Introduction to Home Equity Loan Rates
The rates you secure for a home equity loan are crucially important to your finances. This guide will walk you through what is a home equity loan and explain current home equity loan rates in Wilmington, North Carolina, and the factors that influence them. We’ll also cover the application process, the importance of maintaining a healthy amount of home equity, and the many ways you can use a home equity loan. Whether you’re planning a major home renovation or need funds for other expenses, understanding home equity loan rates can help you make a more informed financial decision.
How Do Home Equity Loans Work?
A home equity loan is technically a second mortgage (assuming you are still paying off your original home loan). It allows homeowners to get equity out of their home without selling the property. The loan is typically issued in a lump sum, which you can use however you wish. You begin repaying it immediately, in fixed monthly installments, over a period that can range from five to 30 years. Since the loan is secured by your home, the interest rate is often lower than that of unsecured loans. To qualify, you generally need to have at least 20% equity in your home; some lenders may allow you to borrow up to 85% of your home’s value.
How Are Home Equity Loan Interest Rates Determined?
Interest rates for different types of home equity loans are the result of a complex interplay between economic conditions and your personal financial situation. The Federal Reserve’s decisions regarding the federal funds rate plays a significant role. Lenders typically peg their rates to the prime rate, but from there, they also adjust the rate they offer individual borrowers based on the person’s credit score and debt-to-income (DTI) ratio. Generally, higher credit scores and lower DTIs lead to more favorable rates. The loan amount and repayment term can also affect rates.
How Interest Rates Impact Affordability
It’s worth doing everything in your power to qualify for the lowest possible rate, because even a tiny change in the rate can mean saving money or incurring extra costs. Take a look at how different interest rates would affect the cost of a $75,000 loan over 20 years, below. (A home equity loan calculator can help you determine your home equity and maximum loan amount.)
| 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 trends in home equity loan rates can be a bit like the weather — unpredictable. The prime rate, a key benchmark for home equity loan rates, has seen some significant ups and downs. For example, it was as low as 3.25% in 2020 and as high as 8.50% in 2023. These changes have a direct impact on the rate you qualify for. If you have the flexibility to wait for a lower rate, keeping an eye on economic conditions and the prime rate can help you time your application to the rate that feels right for you.
Source: TradingView.com
| Date | Prime Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.50% |
| 9/27/2018 | 5.25% |
Source: St. Louis Fed
How to Qualify for the Lowest Rates
To secure the most attractive home equity loan rates, you’ll want to put your best financial foot forward. That means taking the following steps before you file your first application.
Maintain Sufficient Home Equity
To be eligible for a home equity loan, homeowners are required to have at least 20% equity in their homes. Calculating your home equity is simple: Find your home’s estimated value on a real estate site. Subtract your mortgage balance from it, then divide the product by the estimated value to get a percentage. For instance, if your mortgage balance is $400,000 and your home is valued at $550,000, your home equity would be $150,000 and your percentage equity would be 27%. This equity serves as collateral, and a higher percentage of equity can lead to more favorable loan terms.
Build a Strong Credit Score
Lenders often look for a solid 680 credit score or higher, with many preferring 700. A higher score paints a picture of financial prudence and can open doors to more favorable terms and lower interest rates. Improving your credit score is within reach. Focus on timely payments, keeping credit card balances in check, and sidestepping new debt. Regularly check your credit report to catch and correct any errors, and you’ll be on your way to rates that make you smile.
Manage Debt-to-Income Ratio
Your debt-to-income (DTI) ratio plays a significant role in your eligibility for a home equity loan. Most lenders look for a DTI ratio under 50%, with an ideal target of 36% or lower. To determine your ratio, add up your monthly debts and divide by your gross monthly income. To keep your DTI in check, you might consider paying down current debts, finding ways to increase your income, or a combination of both. Additionally, it’s wise to avoid taking on new debt while you’re in the process of applying for a home equity loan.
Obtain Adequate Property Insurance
Property insurance is a must-have for home equity lenders. They need to know that the property securing the loan is adequately protected. Having the right insurance can save you from unexpected costs and headaches. Make sure your insurance meets the lender’s requirements to prevent any hiccups in the loan process.
Useful Tools & Calculators
Online financial tools can help you get a handle on home equity loan rates. It’s like having a personal assistant who can break down all the numbers for you. Many of these tools are available online for free. These are a few of our favorites:
Run the numbers on your home equity loan.
-
Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Closing Costs and Fees
When it comes to closing costs for home equity loans, you’re looking at a typical range of 2% to 5% of the loan amount. These costs encompass a variety of fees, from appraisal to title insurance. Also included in your costs: a title search, document preparation, and attorneys’ fees.
Keep in mind that “no-closing-cost” loans may have higher interest rates. It’s a good idea to compare costs across lenders to find the most cost-effective option.
Tax Deductibility of Home Equity Loan Interest
The interest you pay on a home equity loan used to buy, build, or improve your home may be tax deductible. Those filing jointly can deduct interest on loans up to $750,000; for single filers, it’s loans of up to $375,000. Just remember, in order to take advantage of this deduction, you would need to itemize deductions instead of taking the standard deduction. The tax rules around home equity loans are set to change at the end of 2025, so consult a tax advisor if you’re thinking about this deduction.
Alternatives to Home Equity Loans
In addition to home equity loans, you might want to consider home equity lines of credit (HELOCs) or a special kind of mortgage refinance that gives you cash back. A HELOC works like a credit card, allowing you to borrow up to a certain limit for the term of the loan. During the draw period, you only pay interest on the amount you borrow. Cash-out refinances replace your current mortgage with a new one that’s larger than what you owe. You can take the difference in cash. HELOCs and cash-out refinances have different requirements and benefits.
Home Equity Line of Credit (HELOC)
A home equity loan is often confused with a home equity line of credit (HELOC), but they are different. A HELOC is a bit like having a credit card with your home equity as the spending limit. It’s more flexible than a lump-sum loan, as you only pay interest on the part of the credit line that you use. You have an initial “draw” period (often 10 years) in which you only pay interest. A HELOC interest-only calculator can show you what payments might look like during that time.
Only after the draw period ends do you start to repay the principal. (That’s when a HELOC repayment calculator comes in handy.) HELOCS tend to have a variable interest rate, which means your costs can go up if rates go up. To qualify, you’re generally looking at a credit score of 680 or higher (though 700 is the sweet spot) and a debt-to-income ratio below 50% (aim for less than 36%). Here’s a quick look at a HELOC vs. a home equity loan:
| HELOC | Home Equity Loan | |
|---|---|---|
| Type | Revolving line of credit | Installment loan |
| Interest Rate | Usually variable-rate | Usually fixed-rate |
| Repayment | Repay only what you borrow plus interest; you may have the option to make interest-only payments during the draw period. | Starts immediately at a set monthly payment |
| Disbursement | Charge only the amount you need | Lump sum |
Cash-Out Refinance
A cash-out refinance is a way to replace your current mortgage with a new, larger one, and take the difference in cash. You can typically borrow up to 80% of your home’s value, although the exact limit will depend on your lender. You’ll need a minimum credit score of 620 and a debt-to-income ratio of 43% or less. When you consider a cash-out refinance vs. a home equity line of credit or home equity loan, an important distinction is that a refinance will leave you with one monthly payment, not two. Cash-out refinance loans can have either fixed or variable rates. They can also be easier to qualify for than home equity loans or HELOCs.
The Takeaway
If you’re considering a home equity loan in Wilmington, it’s important to understand the factors that can influence interest rates. A high credit score, a low debt-to-income ratio, and solid property insurance coverage can all help you secure better rates. Online financial tools can help you estimate your costs and make more informed decisions. HELOCs and cash-out refinances also let you tap into home equity, so it’s important to compare your options to find the best fit for your finances. Getting rate estimates from multiple lenders is a smart way to shop.
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.
FAQ
What can you use a home equity loan for?
A home equity loan can be used for large purchases, home renovations, and consolidating higher-interest debt. The flexibility of these loans makes them a popular choice for homeowners. However, it’s important to use the funds responsibly and consider the long-term financial effects. Always compare home equity loan rates and terms from multiple lenders to ensure you’re getting the best deal for your needs.
What would your monthly payments look like on a $50,000 home equity loan?
The monthly payment for a $50,000 home equity loan varies with the interest rate and the term of the loan. At an 8.00% interest rate, for instance, a 10-year loan would have a $607 monthly payment. Choose a 20-year term, and that monthly amount drops to about $418. Consider your budget and goals to pick the term that suits you best.
What could disqualify you from getting a home equity loan?
There are a few things that might disqualify you from securing a home equity loan, such as not having adequate equity in your home, or having a less-than-ideal credit score or a high debt-to-income ratio. Lenders typically look for at least 20% equity in your home and a credit score of 680 or higher. A debt-to-income ratio over 50% is certainly a red flag, and the closer your DTI ratio is to 36%, the better. A history of late payments or a recent foreclosure could also work against you.
What are the benefits of a home equity loan?
Home equity loans have several advantages, like a fixed interest rate and monthly payments you can count on. They’re perfect for big-ticket items such as home improvements, debt consolidation, or a major purchase. With your home as collateral, you’ll often obtain a lower interest rate than you would with an unsecured loan, and this can translate to significant savings over time. Plus, if you’re using the loan for qualifying home improvements, you might be able to deduct the interest on your taxes.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SOHL-Q324-272
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 Asheville, NC Today
ASHEVILLE HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in Asheville, NC.
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 Asheville.
Key Points
• Home equity loan rates are influenced by the borrower’s credit score, debt-to-income ratio, and market conditions.
• It’s a smart move to shop around and compare offers from different lenders to snag the best rates.
• Even a small variance in interest rate can translate to significant savings or added expenses over time.
• Home equity loans typically have lower interest rates than unsecured loans, making them a cost-effective solution for larger expenses.
• The interest on home equity loans is often tax-deductible if you use it for home improvements.
Introduction to Home Equity Loan Rates
Home equity loans can be a smart financial move for homeowners in need of a lump sum of cash. In this guide, we’ll cover the current home equity loan rates in Asheville, North Carolina, and how you can secure the best deal. We’ll also discuss the factors that influence rates, including your credit score, debt-to-income ratio, and the state of the market. Finally, we’ll look into the benefits and risks of home equity loans and provide some tips for getting the best rate. By the end of this guide, you’ll have a clear understanding of whether a home equity loan is right for you and how to get the best rate possible.
How Do Home Equity Loans Work?
What is a home equity loan? It’s essentially a second mortgage that allows you to borrow a lump sum based on the equity you have in your home (the value of your home minus how much you owe on your home loan). Lenders typically let you borrow up to 85% of your equity. These loans usually come with fixed interest rates and predictable monthly payments. They can be a great way to finance large expenses, like home renovations or debt consolidation, and often have lower interest rates than unsecured loans.
How Are Home Equity Loan Interest Rates Determined?
Home equity loan interest rates are influenced by a variety of factors, including economic conditions and your own financial profile. Lenders add a margin to the prime rate to determine the interest rate you’ll be charged. If the prime rate is, say 7.50%, and the lender’s margin is 2%, your home equity loan rate would be 9.50%. Your credit score and debt-to-income (DTI) ratio help lenders determine the margin, and ultimately the home equity loan interest rate.
How Interest Rates Impact Affordability
Your interest rate is a big deal when it comes to the cost of your home equity loan. Even a fraction of a percentage point can add up to significant savings or added expenses over the life of your loan. For instance, a $100,000 home equity loan with a 15-year repayment term might mean a monthly payment of $985 at an 8.50% interest rate, with a total interest cost of $77,253. But bump that rate to 9.50%, and you’re looking at a $1,044 monthly payment and $87,960 in total interest. That’s a $10,700 difference! Understanding how these rates play out in the long run can empower you to make a savvy choice between different types of home equity loans.
Home Equity Loan Rate Trends
Interest rates for home equity loans and HELOCs naturally fluctuate, as does the prime rate on which they’re based. The prime was a mere 3.25% in 2020 before rising to 8.50% in 2023. These shifts can send ripples through the home equity loan market in Asheville. It’s wise to keep your finger on the pulse of these trends and try to time your application to catch a wave of favorable economic conditions. Shopping around for offers from different lenders can help you snag the best rate out there.
Source: TradingView.com
| Date | Prime Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.50% |
| 9/27/2018 | 5.25% |
Source: St. Louis Fed
How to Qualify for the Lowest Rates
To secure the most attractive home equity loan rates, you’ll need to demonstrate your financial fitness. Here’s your To Do list:
Maintain Sufficient Home Equity
You need to have at least 20% equity in your home to qualify for a home equity loan. To calculate your home equity, simply subtract your mortgage balance from your current home value. For example, if your mortgage balance is $400,000 and your home is worth $550,000, you have $150,000 in home equity. Divide your equity amount by your home value to calculate your equity stake: in this example, 27%. It’s important to maintain a healthy amount of home equity to secure the best home equity loan rates and to provide a cushion in case of unexpected financial needs.
Build a Strong Credit Score
To secure the lowest home equity loan rates, you’ll need a credit score of 680 or higher. But lenders are really impressed by a 700 or above, as it lowers their risk. So how do you get there? Keep making those payments on time, maintain low credit card balances, and steer clear of new credit inquiries. By showing you’ve got a solid track record with your finances, you’ll be in a better position to negotiate terms and rates that work for you.
Manage Debt-to-Income Ratio
Your debt-to-income (DTI) ratio is a critical piece of the home equity loan puzzle. Lenders generally prefer to see a DTI under 50%, with 36% or less being the sweet spot. Keeping your DTI in check is a two-pronged approach: Whittle down your existing debt, and aim for a steady income. A lower DTI can open the door to more favorable loan rates and a larger borrowing capacity. Tackling high-interest credit card balances can help you present a more attractive financial picture to potential lenders.
Obtain Adequate Property Insurance
Property insurance is a must-have for most home equity loans, especially in areas susceptible to natural disasters. The right coverage safeguards both you and the lender in the event of home damage. Make sure your policy covers your home’s full value, and consider additional protections such as flood or earthquake insurance if needed. Lenders might ask for proof of insurance before sealing the deal. By getting the right insurance, you can sidestep potential hiccups and ensure a seamless application for your home equity loan.
Tools & Calculators
Utilizing our suite of tools and calculators is a smart move. They can help you get a handle on your borrowing potential and the monthly payments you might expect with a home equity loan. Our home equity loan calculator can show you how much you can borrow against your equity.
Run the numbers on your home equity loan.
-
Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Closing Costs and Fees
When it comes to home equity loans, you’re looking at typical closing costs of 2% to 5% of the loan amount. These can include a range of fees, from appraisal and credit report to document preparation, origination, notary, title search, and title insurance. Lender costs can vary, so it’s smart to shop around and compare offers to snag the best deal. Keep in mind that while some lenders may offer “no-closing-cost loans,” they often come with higher rates.
Tax Deductibility of Home Equity Loan Interest
The interest you pay on a home equity loan could be tax-deductible. If you use the loan for substantial home improvements, purchasing, or building a home, you might be in luck. As of 2025, couples filing jointly can potentially deduct interest on up to $750,000 of qualified home equity loans, and single filers up to $375,000. To claim this deduction, you’ll need to itemize your deductions on your tax return. The tax benefits could make a home equity loan even more appealing. But as always, it’s a good idea to chat with a tax advisor to see how this applies to your unique financial situation and to stay on top of current tax laws.
Alternatives to Home Equity Loans
While a home equity loan is a popular choice, there are other ways to get equity out of your home. A home equity line of credit (HELOC) and a cash-out refinance are two alternatives. Each option has its own benefits and drawbacks, so it’s important to compare all your options to find the best fit for your needs.
Home Equity Line of Credit (HELOC)
What is a home equity line of credit? Imagine a credit card that’s backed by your home’s equity, allowing you to borrow up to a predetermined limit. HELOCs often feature variable interest rates, which can be both a pro and a con, as they fluctuate with the market. To qualify, you’re generally looking at a credit score of 680 or above (though 700 is preferred) and a debt-to-income ratio below 50% (but ideally below 36%).
HELOCs are a great option for those who need to borrow over an extended period, such as for home improvements. A HELOC interest-only calculator can help you estimate your minimum payment during the initial draw period, while a HELOC repayment calculator can show you what will come due after the draw period comes to a close.
Recommended: HELOC vs a Home Equity Loan
Cash-Out Refinance
A cash-out refinance is a type of mortgage refinance, but a bit more involved. It’s when you take out a new mortgage that’s larger than your existing one, and pocket the difference in cash. This can be a great way to tap into a significant portion of your home’s equity, potentially up to 80% of its value. To qualify, you’ll need a minimum credit score of 620 and a debt-to-income ratio of 43% or less. Interest rates can be fixed or variable, with variable rates often offering more equity access. And here’s a perk: unlike a home equity loan, a cash-out refi means just one monthly payment to keep track of, which can simplify your finances.
Recommended: Cash-Out Refinance vs Home Equity Line of Credit
The Takeaway
So, when you’re pondering a home equity loan in Asheville, remember the importance of a robust credit score, a modest debt-to-income ratio, and the need for comprehensive property insurance. These elements can sway the rates you’re offered and the overall cost of your loan. Leverage the tools and calculators at your disposal to estimate monthly payments, and compare offers from various lenders. Keep an eye out for closing costs and fees, and don’t forget to consider the tax implications of home equity loan interest.
And remember, there are alternatives like HELOCs and cash-out refinances to explore. It’s always a good idea to have a chat with a financial advisor to ensure you’re making the most informed decision.
SoFi now offers home equity loans. Access up to 85%, or $350,000, of your home’s equity. Enjoy lower interest rates than most other types of loans. Cover big purchases, fund home renovations, or consolidate high-interest debt. You can complete an application in minutes.
Unlock your home’s value with a home equity loan from SoFi.
FAQ
What can you use a home equity loan for?
A home equity loan is a versatile financial tool. It can be used for a variety of purposes, including large purchases, home renovations, and consolidating high-interest debt. The lump-sum payment and fixed interest rate make it a predictable and manageable financial tool.
What would the monthly payment be on a $50,000 home equity loan?
The monthly payment on a $50,000 home equity loan is contingent on the interest rate and repayment term you opt for. Let’s break it down. At an 8.00% interest rate across 15 years, you’re looking at approximately $478 per month. But if you extend the term to 20 years, your monthly payment would drop to $418. Then increase the interest rate to 8.50% (again with a 20-year term), and your payment rises to $434. These figures underscore the significance of securing a competitive interest rate and selecting a term that not only keeps your payments manageable but also minimizes the total interest paid.
What would my monthly payment be on a $100,000 HELOC?
A $100,000 Home Equity Line of Credit (HELOC) typically has a variable interest rate, which can fluctuate based on market conditions. During the draw period, which often lasts 10 years, you may only pay interest on the amount you draw. For instance, at a 5% interest rate, the monthly interest-only payment would be about $417. Once the draw period ends, the repayment period begins, and you’ll pay both principal and interest. The exact monthly payment will depend on the remaining balance and the interest rate at that time.
What is the payment on a $25,000 home equity loan?
The payment on a $25,000 home equity loan can vary based on the home equity loan rates and the term of the loan. For example, with a 7% interest rate and a 10-year term, the monthly payment would be approximately $286. However, if the interest rate is 8% and the term is extended to 20 years, the monthly payment would be about $188. These figures illustrate how the interest rate and term length can impact your monthly financial commitments. It’s important to compare different lenders’ offers to find the most affordable option that meets your needs.
What would the monthly payment be on a $30,000 home equity loan?
The payment on a $30,000 home equity loan can vary depending on the rates and terms you secure. For instance, with a 10-year term at an 8.00% interest rate, you’re looking at approximately $364 per month. But if you opt for a 20-year term, again at an 8.00% rate, your monthly payment could be around $251, but you’d pay more in interest over the life of the loan. Choosing a term that suits your financial goals and budget is key. An online home equity loan calculator can be a handy tool for getting a ballpark figure and planning ahead.
What could disqualify you from getting a home equity loan?
There are a few things that can disqualify you from getting a home equity loan. If you don’t have enough equity in your home, have a low credit score, or have a high debt-to-income (DTI) ratio, you might not be eligible. Most lenders require at least 20% equity in your home and a credit score of 680 or higher. A DTI ratio above 43% can also be a red flag. In addition, not having adequate property insurance or a history of missed payments can impact your eligibility. To improve your chances, work on building your credit, paying down debt, and maintaining a stable income.
What are the benefits of a home equity loan?
Home equity loans come with a host of advantages, such as fixed interest rates and regular monthly payments, which are great for planning your finances. They generally offer lower interest rates than unsecured loans, making them a smart choice for substantial expenses like home upgrades or consolidating debt. And the interest you pay might be tax-deductible if you use the funds for significant home improvements. Just remember to shop around and compare rates and terms from different lenders to get the best deal — and make sure you fully grasp the potential risks.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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More home equity resources.
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What is a Home Equity Line of Credit
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Different Types of Home Equity Loans
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HELOC vs Home Equity Loan: How They Compare
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The Future of Financial Services: SoFi to Offer Members New Crypto-Enabled Capabilities to Get Their Money Right
SoFi announcing new global remittance service as well as crypto investing coming later this year
SAN FRANCISCO–(BUSINESS WIRE)–SoFi is expanding its one-stop shop for digital financial services with new crypto-powered capabilities that will enable members to borrow, save, spend, invest, and protect their money in entirely new ways. We’re building a future where people can seamlessly send money around the world and have the tools and education to safely use crypto and digital assets to get their money right.
More people are turning to crypto than ever before to pay, invest, and transfer money faster, safer, and for a fraction of the cost of traditional methods. Today, it is estimated that nearly 3 in 10 American adults own crypto assets. Growing demand, fueled by expanded institutional investment and emerging regulatory clarity, is expected to drive more mainstream adoption of crypto and likely the start of another technology super cycle.
To help more people benefit from these shifts, SoFi is announcing the first of many planned crypto and blockchain innovations across our products and services: self-serve international money transfers, also known as global remittances, and crypto investing, each expected to launch later this year.
“The future of financial services is being completely reinvented through innovations in crypto, digital assets, and blockchain more broadly,” said Anthony Noto, CEO of SoFi. “We’re accelerating our efforts to give members more choice and more control, whether they’re investing, sending money across borders, or planning for their future. Crypto and blockchain innovations can and will be threaded through each of our businesses and capabilities, including buying, paying, saving, investing, borrowing, and protecting. And in doing so, we will continue to stand alone in offering our members unmatched products and services as the only digital one-stop shop for their financial needs.”
Helping members send money across borders, faster and cheaper than ever
More than $93 billion in remittances were sent abroad from the United States in 2023, according to the World Bank, underscoring the potential demand for international money transfers. Later this year, eligible SoFi Money members will be able to seamlessly and securely transfer money to people in dozens of countries, whether it’s for supporting family abroad, making purchases outside the U.S., or managing their money across borders. These transfers will be fully automated in the SoFi app, at significantly faster speeds and lower costs compared to the multi-day waiting periods many experience today with traditional services, putting more money in people’s pockets, faster.
Members will be able to initiate a transfer in the SoFi app by entering the recipient’s contact details and amount to send in U.S. dollars. Funds will be automatically transmitted on secure, well-known blockchain networks, converted into local currency at the destination, and rapidly deposited into the recipient’s account, with full transparency on exchange rates and fees upfront, all available 24/7 in the SoFi app. Starting today, members can sign up to join a waitlist to receive access to SoFi self-serve international money transfers when they are available later this year.
International money transfers will be the latest expansion of SoFi’s unprecedented money movement offering, making it the only financial services company that will allow members to seamlessly send money via each of the following methods:
• Zelle®
• Person-to-person payment with only a phone number or email
• Self-service wires
• ACH
• Self-serve international money transfers, once available
• SoFi-offered stablecoins, once available
• Crypto investing makes its comeback to SoFi
Marking our return to crypto investing, SoFi members later this year will be able to buy, sell, and hold a selection of crypto currencies like Bitcoin and Ethereum. Over time, SoFi intends to offer stablecoins and a wide range of other services, such as providing members the ability to borrow against their crypto assets, expanding payment options, and introducing new staking features, as well as blockchain and digital asset infrastructure capabilities for other companies offered by Galileo, SoFi’s technology platform. Members can sign up to join a waitlist to receive access to crypto investing once it is available.
SoFi owns a nationally chartered bank, SoFI Bank, N.A. Today, based on interpretive letters 1183 and 1184 issued by the Office of the Comptroller of the Currency in March and May 2025, it is now permissible for nationally chartered banks to provide crypto custody and execution services on behalf of customers, hold dollar deposits serving as reserves backing stablecoins in certain circumstances, engage in certain stablecoin activities to facilitate payment transactions, and more. Thus, having a national bank license, as well as the vast technology expertise as a digital-only financial company, SoFi is uniquely positioned to bridge traditional financial systems and emerging technology, giving members the trust and confidence they deserve. We will innovate responsibly and in accordance with evolving U.S. regulations.
About SoFi
SoFi Technologies (NASDAQ: SOFI) is a one-stop shop for digital financial services on a mission to help people achieve financial independence to realize their ambitions. Over 10.9 million members trust SoFi to borrow, save, spend, invest, and protect their money – all in one app – and get access to financial planners, exclusive experiences, and a thriving community. Fintechs, financial institutions, and brands use SoFi’s technology platform Galileo to build and manage innovative financial solutions across 158.4 million global accounts. For more information, visit www.sofi.com or download our iOS and Android apps.
Disclosures
Availability of Other Information About SoFi
Investors and others should note that we communicate with our investors and the public using our website (https://www.sofi.com), the investor relations website (https://investors.sofi.com), and on social media (X and LinkedIn), including but not limited to investor presentations and investor fact sheets, Securities and Exchange Commission filings, press releases, public conference calls and webcasts. The information that SoFi posts on these channels and websites could be deemed to be material information. As a result, SoFi encourages investors, the media, and others interested in SoFi to review the information that is posted on these channels, including the investor relations website, on a regular basis. This list of channels may be updated from time to time on SoFi’s investor relations website and may include additional social media channels. The contents of SoFi’s website or these channels, or any other website that may be accessed from its website or these channels, shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
Cautionary Statement Regarding Forward-Looking Statements
Certain of the statements above are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding our expectations for the launch of self-service international money transfers and crypto investing as well as future products, our ability to navigate the regulatory environment and receive any applicable regulatory approvals with respect to the products we plan to launch, demand for our products, our expectations regarding the future of financial services and the adoption of crypto, and the financial position, business strategy and plans and objectives of management for our future operations. These forward-looking statements are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. Words such as “could”, “continue”, “expect”, “future”, “may”, “plan”, “will”, “will be”, “will continue”, and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Factors that could cause actual results to differ materially from those contemplated by these forward-looking statements include: (i) the impact on our business of the regulatory environment, changes in governmental policies, changes in personnel and resources of the governmental agencies that regulate us, and complexities with compliance related to such environment, including new and evolving regulations and guidance with respect to crypto; (ii) our ability to continue to drive brand awareness and realize the benefits of our marketing and advertising campaigns; (iii) our ability to manage our planned products effectively and our expectations regarding the development and expansion of our business; (iv) our ability to predict the demand for new products and the future of the financial services industry; (v) our ability to develop new products, features and functionality that are competitive and meet market needs; (vi) our ability to maintain the security and reliability of our products; and (vii) the outcome of any legal or governmental proceedings instituted against us. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties set forth in the section titled “Risk Factors” in our last annual report on Form 10-K and subsequent quarterly filing on Form 10-Q, as filed with the Securities and Exchange Commission, and those that are included in any of our future filings with the Securities and Exchange Commission. These forward-looking statements are based on information available as of the date hereof and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
©2025 SoFi Technologies, Inc. All rights reserved.
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