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Investors need not be superstitious. In fact, some research suggests that Friday the 13th has actually been a pretty lucky day for the U.S. stock market.
The evidence isn’t foolproof, but you could certainly make an argument that it’s been a good day to be invested, historically speaking. One analysis cited last year by MarketWatch found that the S&P 500 Index performed an average of four times better when the 13th of the month landed on a Friday.
But does it even matter? Whether or not you believe Wall Street could be cursed today, should you change your strategy?
If nothing else, examining how our fears impact our behavior is a good reminder that a short-term (or impulsive) investing strategy can make it tricky to build wealth. Investing for the long-term often means staying the course. Even with all its ups and downs, the S&P 500 — the broadest U.S. stock benchmark — has averaged an annual return of about 10% (6%-7% if you adjust for inflation) over time.
So what? Stick to your plan when it comes to your long-term financial goals. If you’ve got money in stocks, keep your cool during market swings and think twice before panic selling or buying. You don’t have to be lucky to get your money right.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
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Together with Cameron Brink, we’re celebrating 50 years of the Equal Credit Opportunity Act (ECOA), which made it easier for women to pursue more opportunities, like higher education. Today, SoFi could help them break free from student debt sooner.
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Since the enactment of ECOA in 1974, more women are achieving higher education. But the burden of student debt is holding us back.
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• Home equity loans allow homeowners to borrow against the equity in their home, typically for substantial expenses like renovations or debt consolidation.
• Home equity loan interest rates are influenced by the prime rate and home value stability.
• Factors like the borrower’s credit score, loan-to-value ratio, and property location also significantly impact home equity loan rates.
• Home equity loans offer fixed interest rates, ensuring consistent monthly payments, while HELOCs provide flexibility with variable rates and access to funds as needed.
• Closing costs and fees associated with home equity loans can range from 2% to 5% of the loan amount.
Introduction to Home Equity Loan Rates
In this guide on how to get equity out of your home, we’ll cover everything you need to know about home equity loan rates in Maryland. We’ll start by taking a look at what shapes the current rates being offered by your state’s lenders. We’ll also go over the factors that can affect the rate you personally are offered, and finally we’ll provide some tips to help you find the best loan for your needs from among the different types of home equity loans available.
A home equity loan uses your home as collateral. For this reason, it will likely offer a lower interest rate than an unsecured personal loan. This means that if you are currently paying a mortgage and you take out a home equity loan, you’ll have a second mortgage. The interest rate on a home equity loan is usually fixed, which can be a great option for those who like to know exactly what to expect with their monthly payments.
To qualify, you’ll need to have made some progress paying off your home loan: You’ll need at least 20% equity in your primary residence. You can use the money you borrow with a home equity loan for a variety of expenses, including home improvements, education costs, medical bills, and debt consolidation.
Where Do Home Equity Loan Interest Rates in Maryland Originate?
Home equity loan interest rates are not arbitrary; they are influenced by a variety of economic factors. Federal Reserve policy decisions regarding interest rates can influence the prime rate, which is the interest rate that banks charge their most creditworthy customers. A lender might start with its prime rate and then make adjustments based on the qualifications of an individual borrower before proposing a loan rate.
How Interest Rates Impact Home Equity Loan Affordability
Your interest rate is a crucial factor in the affordability of your loan over time. In everyday life, a 1% difference might not seem like a lot, but if you’re borrowing a large sum of money a 1% increase in your rate can add to your monthly payments and add significantly to the total amount of interest you pay over the life of the loan. The chart below shows how different rates and terms affect the monthly payment amount.
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 how important your interest rate is, you might wonder how much you can expect a lender’s prime rate to vary over time. The chart below shows that the average prime rate has seen its share of ups and downs in recent years, from a low of 3.25% in 2020 to a high of 8.50% in 2023.
The graphic below shows a much longer span of time: more than 50 years. Of course, waiting for the prime rate to inch down might not make sense if you urgently need to borrow funds. But if your timeline is flexible, keeping apprised of what is expected in the market may help you decide when is the best time to borrow.
A variety of other factors beyond the prime rate come into play when determining your home equity loan rate in Maryland, and happily many of them — such as your credit score — are within your control. These factors can have an impact on the rate you’re offered.
Credit Score
You probably recall that when you got your home loan, your credit score was an important part of the lender’s criteria. The same is true with a home equity loan. Lenders usually want to see a credit score of 680 or higher from a home equity loan applicant, although higher scores may get you a better rate.
Home Value
Lenders often use independent appraisals to determine the market value of your property before offering a loan. This appraised value of your home is key to determining exactly how much they are willing to lend you.
Loan-to-Value (LTV) Ratio
Once you know your home’s appraised value, you and the lender can compute your LTV ratio. Your combined LTV ratio is calculated by dividing the loan amount you’re seeking plus any remaining balance on your first mortgage by the appraised value of the home. The maximum combined LTV lenders typically allow for home equity loans is around 85%.
Home Value Stability
If your home’s value is on the rise, lenders are more likely to greenlight a larger home loan, as an increasing property value helps shelter them from risk. But if home values in your area are sagging, lenders may offer smaller home equity loans.
Property Location
The location of your property can also contribute to your interest rate. If your home is in an area that is at a higher risk for natural disasters, you may have a higher interest rate, reflecting the fact that the lender is taking on more risk by lending to you. High-risk areas are those that are more likely to experience hurricanes, floods, tornados, or wildfires, for example.
Lender Policies
Each lender has its own policies that might impact the interest rate you’re offered. This is why it’s smart to shop around and compare interest rates, fees, and closing costs from multiple lenders. Taking the time to do this research might help you find more favorable terms and save money over time.
How to Qualify for the Lowest Rates
To secure the most favorable home equity loan rate, prioritize caring for your credit score, diligently manage your debt-to-income ratio, procure comprehensive property insurance, and keep your home equity high. Here are the to-dos:
Build a Strong Credit Score
A higher credit score can be your golden ticket to more favorable interest rates. Check your credit report now and then and make sure there are no inaccuracies. Try not to max out all your lines of credit. And above all, pay your bills on time.
Manage Debt-to-Income Ratio
Your debt-to-income (DTI) ratio is a key player when you’re applying for a home equity loan. To figure out yours, add up all your monthly debts and divide by your gross monthly income. Multiply by 100 for a percentage. For the best home equity loan rates in Maryland, lenders typically look for a DTI ratio below 36%, though you may be able to get a loan with a DTI ratio up to 50%. A lower DTI ratio tells them you can handle your current debt and the added monthly payments of a home equity loan.
Obtain Adequate Property Insurance
It’s a standard requirement for home equity loans to require sufficient property insurance. These policies are designed to protect you and your lender from financial loss due to property damage or destruction. When you’re looking at home equity rates in Maryland, make sure to include the cost of any added insurance in your calculations, so you can get a clear picture of the total financial commitment.
Maintain Sufficient Home Equity
As noted above, lenders typically require homeowners to maintain at least 20% equity in their primary residence to be eligible for a home equity loan. Remember to compute equity based on your current property value, not what you paid for the property initially.
Fixed vs. Variable Interest Rates
Home equity loans usually come with a fixed interest rate, which means you can count on having the same monthly payment for the entire life of your loan. While a fixed rate can keep things predictable, it might also mean that you start off with a higher rate than you would with a variable rate. A variable rate, on the other hand, might start off lower, but it could also go up (or down) over time. A HELOC (home equity line of credit) usually comes with a variable interest rate.
Tools & Calculators
Take advantage of online tools and calculators to determine whether you might be eligible for a home equity loan or HELOC, to assess your borrowing capacity, and to figure out what your monthly payments might be. Here are three useful calculators:
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 on home equity loans typically range from 2% to 5%. You can expect to see fees for services such as appraisals, credit reports, document preparation, loan origination, notary, title search, and title insurance — though each lender has its own fee schedule. When considering Maryland home equity loans, it’s important to factor in costs and fees if you’re comparing one lender’s offer to another’s.
Tax Deductibility of Home Equity Loan Interest
Many borrowers are pleased to discover that the interest you pay on a home equity loan is tax-deductible if you’re using the funds to substantially improve your home. If you’re filing jointly, you can deduct interest on loans up to $750,000; for single filers, the limit is $375,000. Itemizing your deductions is the key to unlocking this benefit, so a chat with a tax pro might be in order.
Alternatives to Home Equity Loans
There are other ways to tap into your home’s equity, including HELOCs but also home equity conversion mortgages (HECMs) and cash-out refinances. Each of these options has its own set of requirements and features, so let’s take a closer look.
Home Equity Line of Credit (HELOC)
A HELOC is like a credit card but with lower interest rates. With a lender’s permission, you can borrow up to a certain limit and pay interest only on the amount of the credit line you actually use. One key difference in the HELOC vs. home equity loan comparison: The variable interest rates on HELOCs can change with the market, and if they go up, your costs can increase. The monthly payment on a home equity loan will remain steady. HELOCs are popular among borrowers who know they need cash — say, for a renovation project — but aren’t sure exactly how much.
Home Equity Conversion Mortgage (HECM)
An HECM is a government-insured reverse mortgage that empowers homeowners aged 62 and older to receive payments from the lender based on their home’s value. The proceeds from an HECM can be received as a lump sum, regular payments, or a line of credit. Unlike home equity loans and HELOCs, HECMs do not require you to make payments until you leave the home. Keep in mind, though, that HECMs generally have higher closing costs and longer processing times. (While SoFi does not offer HECMs at this time, we do offer home equity loans and HELOCs.)
Cash-Out Refinance
A cash-out refinance is like hitting a refresh button on your mortgage. This special type of mortgage refinance replaces your existing home loan with a new (larger) one, giving you the chance to pocket some cash.
If you’re contemplating a cash-out refinance vs. a home equity line of credit or home equity loan, one thing to think about is how your current mortgage rate compares to prevailing rates in the market today. You’ll need to do the math to make sure taking out a new mortgage doesn’t radically inflate the interest you will pay. Remember to include closing costs and fees in your calculations.
The Takeaway
Knowing the ins and outs of Maryland’s home equity loan rates and the factors that sway them is key to making savvy borrowing choices. By shopping around and using online calculators to compare different lenders’ offers, you can ensure you secure the best terms and rates.
Unlock your home’s value with a home equity loan from SoFi.
How much will you pay each month on a $50,000 home equity loan?
When it comes to a $50,000 home equity loan, the loan term and interest rate play a big role in the size of your monthly payment. Borrowing $50,000 at a 7.50% interest rate with a 10-year term would equal a monthly payment of $594. An 8.00% interest rate and a 10-year term would mean a monthly payment of $607.
What is the monthly payment on a $100,000 HELOC?
When you’re thinking about a $100,000 HELOC, keep in mind that your monthly payment will fluctuate based on the current interest rate and how much of your credit line you’ve utilized. If you used the full $100,000 and your interest rate was 8.00%, you’d pay $836 per month if you repaid the funds over 20 years. Using a HELOC monthly payment calculator will give you the most precise estimate of your payments.
What is the payment for a $25,000 home equity loan?
When you’re looking at a $25,000 home equity loan, you need to think about how the interest rate and the loan term will affect your monthly payments. Assuming a 10-year term, an interest rate of 6.00% would mean a $278 monthly payment. An interest rate of 8.00% would mean $303.
What would the payment be on a $30,000 home equity loan?
The monthly payment on a $30,000 home equity loan would be $287, assuming an interest rate of 8.00% and a 15-year term. Changing the rate or term will result in a change in the payment amount as well.
What could disqualify you from getting a home equity loan?
There are a number of factors that could prevent you from getting a home equity loan. These include a poor credit history, not enough home equity, a high debt-to-income ratio, and inadequate property insurance coverage. Each of these factors is important and can affect the outcome of your application. The good news is that you can take steps to address each of these issues and increase your chances of being approved for a home equity loan.
What are the benefits of a HELOC?
A home equity line of credit (HELOC) offers several benefits, including flexible borrowing options, lower interest rates vs. traditional credit cards, and the convenience of only paying interest on the amount of credit that you actually use. HELOCs provide homeowners with a versatile financial tool that can be tailored to their specific needs and financial situations.
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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945. All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee. Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice. Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
This content is provided for informational and educational purposes only and should not be construed as financial advice.
• Home equity loans allow homeowners to borrow against their home’s equity for various expenses such as renovations, education, or debt consolidation.
• Home equity loan rates are influenced by external factors such as the prime rate, economic conditions, and housing market trends.
• Personal factors such as credit score, debt-to-income ratio, property insurance coverage, and home equity level are also important.
• Home equity loans offer fixed interest rates, while a home equity line of credit (HELOC) offers a revolving credit line with adjustable rates.
• Alternatives to home equity loans include HELOCs, home equity conversion mortgages, and cash-out refinances, each with its own unique characteristics.
Introduction to Home Equity Loan Rates
If you’ve been making your monthly mortgage payments steadily and are wondering how to get equity out of your home, this guide is for you. In it, you’ll learn about Massachusetts home equity loan rates. We’ll explain the factors that affect your rate, and share how to find the best rates for your situation.
Different types of home equit loans are a popular way for homeowners to access the equity they have built up in their home by paying their home loan over the years. You can use the money from a home equity loan for just about any expense, including home renovation, debt consolidation, and education costs.
This particular type of loan is secured by the equity that you’ve built up over time in your home, making it a lower-risk loan option for lenders to consider and approve than an unsecured loan. This is why home equity loan rates in Massachusetts, as elsewhere, tend to be lower than rates for personal loans. If you’re still paying your first mortgage, the home equity loan will technically be a second mortgage.
Unlike a home equity line of credit (HELOC), which functions as a revolving credit account, a home equity loan provides the borrower with a lump sum of cash up front. Repayment of the principal balance and interest begins immediately, typically with a fixed interest rate.
Where Do Home Equity Loan Interest Rates in Massachusetts Originate?
Home equity loan interest rates are influenced by economic factors, chiefly the prime rate that banks charge their most creditworthy customers. Federal Reserve policy decisions regarding interest rates can help guide the prime rate. Understanding this can help borrowers keep an eye on the news and anticipate rate fluctuations so they can make informed decisions about when you secure a home equity loan or HELOC.
How Interest Rates Impact Home Equity Loan Affordability
It’s important to carefully weigh how interest rates can tip the scales of your financial situation over the life of a loan. The table below shows you how that monthly payment will change based on three factors: your loan amount, interest rate, and loan term.
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
What’s even more striking is the change in the total interest you’ll pay over the life of the loan. Just a 1% difference in interest rate on a $100,000 home equity loan with a 20-year term comes to more than $14,000 in interest, either paid or saved!
Home Equity Loan Rate Trends
As noted above, banks’ prime rates play a vital role in determining Massachusetts home equity loan rates. Since 2018, the average U.S. prime rate has seen some significant ups and downs, hitting a low of 3.25% in 2020 and a high of 8.50% in 2023. These swings have a direct impact on Massachusetts home equity loan interest rates and the overall affordability of these loans for you. Having a sense of how current rates compare with historical rates can be helpful in your decision-making. The chart below is a detailed look at average rates in recent years. The graphic gives 50-plus years of rates.
The prime rate isn’t the only factor driving what interest rate you’re offered. Other factors also determine the level of risk associated with your application which in turn governs what interest rate you may be offered.
Credit Score
Your lender examined your credit score when you took out a home loan to purchase your residence, and a lender on a home equity loan will also examine your score. They’re more likely to approve you if your credit score is 680 or higher, but many prefer to see 700 or above.
Home Value
You’ll need a home appraisal if you apply for a home equity loan, as the value of your property will determine how much equity you have in your home (remember, you need at least 20% equity in order to get the loan).
Loan-to-Value (LTV) Ratio
Once you have an appraisal, you can figure out your loan-to-value (LTV) ratio, which helps determine how much you can borrow. You can compute your personal number by adding the amount you wish to borrow to the amount you currently owe on your mortgage (if anything). Then divide that total by the appraised value of your home. Multiply the result by 100 and you’ll have a “combined LTV.” The highest LTV most lenders will allow for a home equity loan is 85%. If you’re not sure how much you might be allowed to borrow, use a home equity loan calculator.
Home Value Stability
How stable home values are in your part of Massachusetts is another thing that lenders consider. When the market is healthy and values are stable or rising, lenders are more likely to give the okay to larger loans. But when the housing market is soft, lenders may have tougher criteria and offer smaller loan amounts.
Property Location
If your property is located in an area that is deemed at high risk for natural disasters such as flooding or tornadoes, higher interest rates may be in your future, as lenders consider this risky.
Lender Policies
Policies set by individual lenders can have a noticeable impact on the interest rates they offer borrowers. That’s why you’ll want to compare offers from a few different lenders during the loan application process and look not only at the interest rate you’re offered but also at the fees.
How to Qualify for the Lowest Rates
Take the steps below to ensure you get the best rate possible.
1. Build a Strong Credit Score
A robust credit score can be your ticket to more attractive rates on Massachusetts home equity loans. Periodically checking your credit report for errors and making payments on time are key to securing the best terms. And here’s a bonus: A stellar credit score can also open doors to better rates on other loans, like personal or auto loans.
2. Manage Debt-to-Income Ratio
When you’re applying for a home equity loan, your debt-to-income (DTI) ratio is a big deal. It’s a simple calculation that compares your monthly income to your monthly debt payments. (Add up your monthly debts, divide by your gross monthly income, and then multiply the result by 100.) Lenders usually look for a DTI ratio under 36% when considering home equity loans, though some may allow up to 50%. This number tells them you can handle your current debt and have enough income to take on extra monthly payments.
3. Obtain Adequate Property Insurance
We’re hoping you already have sufficient property insurance, but if you don’t, you’ll want to level up before applying for your home equity loan. This not only safeguards your property but can also lead to more favorable loan terms.
4. Maintain Sufficient Home Equity
As noted above, you’ll need to keep at least 20% equity in your home to qualify for a home equity loan. This equity acts as a safety net, assuring the lender that you have a significant financial investment in your property and are less likely to default.
Fixed vs. Variable Interest Rates
Fixed rates are typical for home equity loan rates, so you’ll have the comfort of knowing your monthly payments will stay the same. This can be a big help when you’re trying to budget. But keep in mind that fixed rates can be a bit higher than variable rates at the start.
Tools & Calculators
We have a variety of calculators to help you figure out what you can afford, how much you can borrow, and what your monthly payment will be. Here are three useful ones if you’re thinking about how to harness your home equity.
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
You’ll likely be looking at a range of 2% to 5% of your loan amount in closing costs. Common fees include appraisal, credit report, document preparation, and title insurance, though every lender is different (which is why it’s smart to compare fees and interest costs when you’re comparing home loan offers).
Tax Deductibility of Home Equity Loan Interest
Good news: The interest on your home equity loan could be tax deductible if you’re using it to significantly improve your space. Couples filing jointly can deduct interest on the first $750,000 of a home equity loan, while single filers can deduct interest on up to $375,000. Just remember to itemize your deductions when you file your tax return to claim this benefit.
Alternatives to Home Equity Loans
In addition to home equity loans, there are other ways to tap into your home’s equity. These include a home equity line of credit, home equity conversion mortgage, and a cash-out refinance. Each of these options has its own unique features and eligibility requirements, so it’s important to carefully consider and evaluate your choices before making a decision. These alternatives provide homeowners with different ways to access the equity they’ve built up in their home to meet their financial needs and goals.
Home Equity Line of Credit (HELOC)
A HELOC is a bit like a credit card, but the credit line you’re borrowing against is your home’s equity. You can borrow up to a certain amount, and you’ll only pay interest on the amount you’ve borrowed. As you think about a HELOC vs. a home equity loan, consider that while a home equity loan’s interest is typically fixed, the interest rate on a HELOC is variable, which means it can go up or down based on an index. This can cause your payments to increase, which is something to consider when deciding if a HELOC is right for you.
Home Equity Conversion Mortgage (HECM)
If you’re 62 or older, a government-backed HECM reverse mortgage could be the key to unlocking your home’s value. It offers you the flexibility to receive payments as a lump sum, regular disbursements, or a line of credit. The best part? You don’t have to make payments until you leave your home. (While SoFi does not offer HECMs at this time, we do offer home equity loans and HELOCs.)
Cash-Out Refinance
A cash-out refinance is a special type of mortgage refinance. It’s a bit like hitting the reset button on your mortgage, but with a bonus. You take out a new, larger loan that pays off your existing mortgage and leaves you with some extra cash in hand.
As you consider a cash-out refinance vs. home equity line of credit or a home equity loan, remember that a cash-out refi is just that: a refinance. So if you have a really sweet interest rate on your current loan, it might not make sense to refinance into a higher rate. A HELOC or home equity loan could be a better bet.
The Takeaway
Understanding home equity loan rates in Massachusetts and what influences the rate you’ll be offered can help you decide on when you apply for a loan and ensure that you present the best possible financial picture to a prospective lender. By comparing lenders, keeping a strong credit score, and exploring all your options, including a HELOC, you can find the best rates and repayment plan for your financial goals.
Unlock your home’s value with a home equity loan from SoFi.
What’s the monthly payment on a $50,000 home equity loan?
If you borrow $50,000 with a home equity loan and pay it back over 10 years, the monthly payments could range from $530 to $607, depending on your interest rate (this range is from 5.00% to 8.00%). But remember: The two main factors that will affect your payments are the interest rate and the loan term, so changes in either of these will change your payment.
What is the monthly payment for a $100,000 HELOC?
If you’ve maxed out your HELOC and are paying it back over 20 years at a rate of 7.00%, you can expect to pay $775 per month. Of course this is just an example. You can use a HELOC repayment calculator to compute the number for your exact interest rate.
What is the payment on a $25,000 home equity loan?
Borrow $25,000 with an interest rate of 8.00% and a term of 5 years, and you’re looking at a monthly payment of $507. Change either the interest rate or the term (or both) and your payment amounts will change as well.
How about a $30,000 home equity loan? What would that cost?
The monthly payment on a $30,000 home equity loan will depend on the interest rate and the loan term, but a 10-year term and 8.00% interest rate would mean a monthly payment of $364.
What might disqualify you from getting a home equity loan?
There are a number of factors that can prevent you from getting a home equity loan. These can include having a low credit score, having a high debt-to-income ratio, lacking 20% equity in your home, or not having enough insurance on your property.
What are the benefits of a HELOC?
HELOCs have a variety of benefits, including flexible borrowing, lower interest rates than many credit cards, and the ability to pay interest on only the amount of the credit line that you’ve used. These benefits make HELOCs a great financial tool for homeowners who need a flexible and cost-effective credit solution that fits their unique financial needs and long-term goals.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945. All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee. Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice. Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
This content is provided for informational and educational purposes only and should not be construed as financial advice.
• Home equity loans allow homeowners to borrow against the equity in their homes for large expenses like home renovations or debt consolidation.
• Home equity loan interest rates are influenced by the prime rate, prevailing economic conditions, the borrower’s credit score, loan-to-value ratio, lender policies, and the property location.
• Fixed interest rates on home equity loans provide stability and predictability in monthly payments, making it easier to budget and plan.
• Closing costs and fees associated with home equity loans can range between 2% and 5% of the loan amount and may include an appraisal, credit report, origination fee, title and insurance.
• Interest on home equity loans is generally tax-deductible if the loan proceeds are used for home purchase, construction, or improvements.
Introduction to Home Equity Loan Rates
If you’re a homeowner in North Dakota, this guide will help you understand home equity loans and the interest rate you can expect to be offered. We’ll walk you through determining your equity level, and how to qualify for the best available rate. By the end, you’ll be well-equipped to decide if a home equity loan is the right financial move for you.
A home equity loan is an installment loan that’s repaid over 5 to 30 years, much like your mortgage — in fact, a home equity loan is considered a second mortgage. It’s a smart way to get equity out of your home at a lower interest rate than you’d get with a personal loan. And the interest rate is typically fixed, which makes budgeting easier.
To qualify, you’ll need at least 20% equity in your primary residence. And you can use the loan for pretty much anything: home improvements, college tuition, medical expenses, or debt consolidation.
If your biggest question is, what’s the difference between a HELOC vs a home equity loan, we’ll get into that in detail below. For now, just remember this: A home equity loan gives you a lump sum, while a HELOC offers a revolving line of credit, much like a credit card.
Where Do Home Equity Loan Interest Rates Originate?
Home equity loan interest rates are influenced by a variety of economic factors, including the prime rate. The prime rate is the interest rate that banks charge their most creditworthy customers. Federal Reserve policy decisions regarding interest rates can also influence home equity loan rates. Understanding the factors that influence home equity rates can enable borrowers to anticipate rate fluctuations and make informed decisions about when to take out a home equity loan.
How Interest Rates Impact Home Equity Loan Affordability
The interest rate you secure can have a significant impact on your ability to afford your loan over the long term. For instance, over 20 years, a 1% difference in the interest rate can translate to an additional $11,000 in interest over the duration of the loan, as illustrated in the table below:
Interest Rate
Monthly Payment
Total Interest Paid
8.00%
$627
$75,559
7.50%
$604
$70,007
7.00%
$581
$64,554
Home Equity Loan Rate Trends
The prime interest rate’s ups and downs are a crystal ball of sorts for North Dakota’s home equity loan rates. By keeping an eye on changes, you’ll be in the know about when to pounce on a great rate. Don’t let the fluctuations stress you out — instead, use them to your advantage. When the time is right, you’ll be ready to lock in the best rate and terms for your home equity loan.
Historical Prime Interest Rates
Since 2018, the U.S. prime rate has fluctuated significantly, with a low of 3.25% in 2020 and a high of 8.50% in 2023. These changes have had a major impact on borrowing costs and investment decisions. For homeowners, changes in the prime rate impact the interest rates and terms available for home equity loans.
The homeowner’s financial profile can also influence their home equity loan rate. These factors are weighed differently depending on the lender, so it’s important to shop around and compare loan offers. Because of this, home equity loan rates in North Dakota can vary.
Credit Score
Borrowers who have a history of making payments on time are more likely to be offered a lower interest rate. Most lenders require a minimum credit score of 680 for a home equity loan, but the best rates are usually given to those with scores of 700 or above. A higher credit score shows that you have a history of responsible borrowing and are more likely to manage your finances well, which makes you a more attractive candidate.
Home Value
Lenders often use independent appraisals to determine a home’s market value. These appraisals are also used to determine your equity position, which is the difference between what your home is worth and how much you owe on it. This is important because lenders use this to determine the maximum loan amount they’re willing to approve. Accurate appraisals are important for both lenders and borrowers.
Loan-to-Value (LTV) Ratio
The loan-to-value (LTV) ratio is another factor in determining the maximum amount lenders will permit for a home equity loan. In North Dakota, most lenders will allow a maximum combined LTV (your mortgage balance plus loan amount divided by your home value) of 85%. Let’s say you currently owe $300,000 on your mortgage and you want to borrow $75,000 for a renovation project. Your home is appraised at $450,000:
$300,000 + $75,000 = $350,000
$375,000 / $450,000 = 83%
With a 83% combined LTV, there is a good chance a lender will approve this home equity loan.
Home Value Stability
The stability of home values can significantly impact the amount of equity homeowners can potentially access and utilize. When home values are on the rise, lenders may be more inclined to approve larger loan amounts, as the increasing value of the property mitigates some of the associated risk. Conversely, when home values decline, the lender’s risk increases, potentially leading to stricter lending criteria and reduced loan amounts.
Property Location
Depending on what area of North Dakota you live in, you might see higher interest rates. Lenders may see certain regions as riskier because of the potential for natural disasters or extreme weather events like storms, flooding, and wildfires.
Lender Policies
When you’re on the hunt for a home equity loan, individual lender policies can affect the interest rates they offer. The key to getting a competitive rate is to shop around, comparing interest rates, fees, and closing costs from several lenders. By doing your homework and considering other options like a HELOC, you could land some sweet terms for your financing deal.
To qualify for the lowest home loan rates in North Dakota, you’ll want to make sure you have a strong credit score, a low debt-to-income ratio, adequate property insurance, and enough home equity. If you can stick to these financial best practices, you’ll be in a great position to secure the most competitive rates available.
Build a Strong Credit Score
In the world of personal finance, a higher credit score can open doors. By building a robust credit history and demonstrating responsible borrowing habits, you can set yourself up to receive more attractive interest rates on a home equity loan, potentially saving you a significant amount over the loan’s lifetime. Favorable conditions can make a real impact on your financial outlook.
Manage Debt-to-Income Ratio
This ratio, which compares your gross monthly income against your monthly debt commitments, is a major factor in whether you’ll qualify. In North Dakota, lenders often look for a DTI ratio below 36%, though some lenders will go as high as 50% for home equity loans. It’s a way to gauge your capacity to handle your current debts and take on the added monthly payments of a home equity loan.
Obtain Adequate Property Insurance
In the world of home equity loans, property insurance is often a requirement, especially in areas that are prone to flooding. This insurance is designed to protect both you and the lender from financial loss in the event of property damage. It’s a win-win: You get peace of mind and the lender knows their investment is secure.
Maintain Sufficient Home Equity
In North Dakota, you must have at least 20% equity in your home to take out a home equity loan. This is an important rule that helps protect you and your lender. It also ensures you’re not borrowing more than you can afford to pay back. A home equity loan calculator can help you determine your equity position.
Fixed vs. Variable Interest Rates
Home equity loans in North Dakota typically come with fixed interest rates. This means you’ll enjoy the same interest rate and monthly payment for the entire life of your loan. While fixed rates can sometimes start out a little higher than variable rates, many homeowners appreciate the peace of mind that comes with knowing exactly what to expect from month to month.
Tools & Calculators
Many user-friendly tools and calculators are at your disposal, ready to help you estimate your home equity loan payments. These resources are designed to give you a comprehensive understanding of how different interest rates and loan terms can impact your financial obligations, empowering you to make well-informed decisions about your home equity loan. Here, in addition to the home equity loan calculator, you’ll find a HELOC repayment calculator and HELOC interest only calculator.
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 you take out a home equity loan, you can expect to pay closing costs that typically range from 2% to 5% of the loan amount. These costs can include an appraisal, credit report, title search, and insurance.
Loan origination fees can range from 0.5% to 1%. Title insurance can cost between 0.5% and 1% of the loan balance. Appraisals generally cost between $300 and $500. Because these costs can vary, it’s important to shop around and compare offers from multiple lenders.
Tax Deductibility of Home Equity Loan Interest
The interest you pay on home equity loans may be tax-deductible, but only if you use the funds for home improvements. If you’re married and filing jointly, you can deduct interest on loans up to $750,000. Single filers can deduct interest on loans up to $375,000. Just remember, you’ll need to itemize your deductions to claim this benefit. To make sure you’re getting the most out of your home equity loan come tax time, it’s always a good idea to chat with a tax advisor.
Alternatives to Home Equity Loans
Beyond the standard home equity loan, there are different types of home equity loansand lines of credit. These include HELOCs, home equity conversion mortgages (HECMs), and cash-out refinancing. Each of these options has its own features and requirements, so it’s important to carefully consider which one is the best fit for your financial situation and goals.
Home Equity Line of Credit (HELOC)
A HELOC is a versatile option that functions much like a credit card but with lower interest rates. You can access funds up to a predetermined limit and are charged interest only on the amount you use. Keep in mind that the variable interest rate changes with the market, potentially increasing your costs. Because it’s an area of confusion for many homeowners, here’s a comparison of home equity loans and HELOCs.
HELOC
Home Equity Loan
Type
Revolving line of credit
Installment loan
Interest Rate
Usually variable-rate
Usually fixed-rate
Repayment
Repay only what you borrow; you may have the option to make interest-only payments during the draw period.
Starts immediately at a set monthly payment.
Disbursement
Charge only the amount you need.
Lump sum.
Home Equity Conversion Mortgage (HECM)
If you’re 62 or older, you might want to consider an HECM, a government-backed reverse mortgage that allows you to receive payments from the lender based on your home’s value. The proceeds can be received as a lump sum, regular payments, or a line of credit. The beauty of an HECM is that you don’t have to make payments until you leave the home, unlike traditional home equity loans and HELOCs. (While SoFi does not offer HECMs at this time, we do offer home equity loans and HELOCs.)
Cash-Out Refinance
With a cash-out refinance, you take out a new mortgage that’s larger than your existing loan, and you receive the difference in cash. Our guide to Cash-Out Refinance vs Home Equity Line of Credit can give you more details.
The Takeaway
Understanding home equity loan rates and the factors that influence them is crucial to making the best financial decision for your situation. By comparing lenders in North Dakota, taking good care of your credit score, and keeping an eye on the market, you can get the best rates and terms for your home equity loan, and improve your financial outlook.
Unlock your home’s value with a home equity loan from SoFi.
Wondering about the monthly payment on a $50,000 home equity loan?
If you borrow $50,000 with a home equity loan and pay it back over 10 years, the monthly payments could range from $530 to $607, depending on your interest rate (this range is from 5.00% to 8.00%). The two main factors that govern your payments are the interest rate and the loan term, so changes in either of these will alter your payment.
What is the monthly payment on a $100,000 HELOC?
Remember that the monthly payment on a $100,000 HELOC is impacted by both the current interest rate and the amount you’ve used. If you draw the entire $100,000 and are paying it back over 20 years at a rate of 7.00%, you can expect to pay $775 per month.
What’s the payment on a $25,000 home equity loan?
Assuming a 10-year term, an interest rate of 8.00% would mean a $303 payment each month. An interest rate of 6.00% would mean a $278 monthly payment. To get an idea of what your payment might be, you can use a home equity loan calculator.
What would the payment be on a $30,000 home equity loan?
A $30,000 home equity loan with a rate of 8.00% and a 20-year term would cost you $251 each month. Changing the interest rate or the loan term will result in a different monthly payment.
What could disqualify you from getting a home equity loan?
Things like a sketchy credit history, not enough equity in your home, a high debt-to-income ratio, or inadequate property insurance can throw a wrench in your home equity loan application. But with a little foresight and proactive steps, you can often address these issues and get back on the path to loan approval.
What are the benefits of a HELOC?
HELOCs offer a number of advantages, including flexible borrowing options, lower interest rates compared to credit cards, and the ability to pay interest on only the amount you’ve borrowed. These features make HELOCs an attractive financial tool for homeowners who are looking for a cost-effective and versatile credit solution.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945. All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee. Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice. Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
This content is provided for informational and educational purposes only and should not be construed as financial advice.
