Current Home Equity Loan Rates in Murfreesboro, TN Today
MURFREESBORO HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in Murfreesboro, TN.
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 Murfreesboro.
Key Points
• Home equity loan rates are influenced by the Federal Reserve’s monetary policy, as well as the borrower’s credit score and debt-to-income ratio.
• A home equity loan is a good way to cover a large, one-time expense.
• Home equity loans tend to have fixed interest rates.
• The interest on home equity loans may be tax-deductible if you use the funds for home improvements.
• Compare rates and terms from multiple lenders to find the best option.
Introduction to Home Equity Loan Rates
This comprehensive guide to home equity loan rates in Murfreesboro, Tennessee, will help you understand how rates are shaped and what you can do to secure the best deal. Whether you’re considering a home renovation, paying down high-interest debt, or making a major purchase, you’ll come away with the knowledge to make informed decisions about borrowing. By the end of this guide, you’ll be well prepared to navigate the home equity loan market and find a loan that meets your needs.
How Do Home Equity Loans Work?
To understand the importance of home equity loan interest rates, it helps to have a grasp of what a home equity loan is in the first place. A home equity loan is a second mortgage. Once approved, the borrower gets a lump sum of money. They immediately begin repaying the loan, with interest, over a fixed term — typically between five and 30 years. Because the loan is secured by your home, you can generally get more favorable terms than you would with an unsecured personal loan. But this also means that if you don’t repay the loan, you risk foreclosure.
To qualify for a home equity loan, you typically need at least 20% equity in your home. Equity is the difference between your home’s value and how much you owe on your mortgage. For example, if your home is worth $500,000 and you owe $350,000, you have $150,000 in equity. A home equity loan calculator can help you see almost instantly how much you would likely be able to borrow.
Recommended: What Is a Home Equity Line of Credit?
How Home Equity Loan Interest Rates are Set
Rates on different types of home equity loans are influenced by a variety of factors, from the economic climate to your personal financial situation. Federal Reserve policies have a ripple effect on lending, and lenders’ rates tend to follow the prime rate. Your credit score and debt-to-income (DTI) ratio are pivotal; the higher the score and the lower the ratio, the more favorable your rates. Loan size and term also come into play.
How Interest Rates Impact Home Equity Loan Affordability
The interest rate you get will largely determine the affordability of your home equity loan, just as it did when you bought your home and took out your home loan. Even the slightest rate change, down or up, can translate to significant savings or costs. Consider a $100,000 loan with a 15-year term at 8.50% — that’s a $985 monthly payment and a total of $77,253 in interest. Now, bump that rate to 9.50% and your monthly payment jumps to $1,044, with total interest of $87,961. So it’s clear that nabbing a lower rate could have big benefits.
Here are other examples of loan rates and terms for different loan amounts. Note that the longer the term, the lower the monthly payments — but the more you will pay in interest 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
Predicting interest rate movements is like trying to forecast the weather — it’s not error-proof. But having a sense of the recent history of the prime rate can give you valuable perspective on current rates. The prime rate hit a low of 3.25% in 2020 and a high of 8.50% in 2023. These fluctuations have a direct impact on the rates you might see in Murfreesboro. To get the best deal, some borrowers try to time your application for when the prime rate is low. You may not be able to wait, but you can shop around to see what rates different lenders are offering.
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
Securing the most favorable home equity loan rate hinges on your financial standing. Lenders will scrutinize your credit score and DTI ratio to assess your application. Prepare for your application by taking these steps:
Maintain Sufficient Home Equity
To be eligible for a home equity loan, you’ll need at least 20% equity in your home. Give yourself an equity checkup by subtracting your mortgage balance from your home’s current value. (Look up your home value on a real estate web site.) For instance, if your mortgage balance is $400,000 and your home is estimated to be worth $550,000, your equity would be $150,000. To determine the percentage, divide your equity by the home value — in this case, you have 27% equity.
Build a Strong Credit Score
To get the most attractive home equity loan rates, a robust credit score is your ticket. Lenders usually favor scores of 680 or higher, with the 700 mark giving you access to better rates. The higher your score, the more financially prudent you appear, potentially translating to more appealing loan terms. If you have a track record of timely payments and judicious credit management, a lower interest rate could be in the cards. It’s a smart move to peruse your credit report for any glitches and address them before you apply.
Manage Debt-to-Income Ratio
Your DTI ratio is a critical piece of the home equity loan puzzle. Lenders generally look for a DTI below 50%, with 36% or lower being ideal. To calculate your DTI, divide your total monthly debt payments by your gross monthly income. The lower the ratio, the better your chances of securing a competitive rate. If your DTI is on the higher side, consider chipping away at existing debts or finding ways to boost your income. Not only will this improve your odds of approval, but it could also lead to a more favorable rate.
Obtain Adequate Property Insurance
Property insurance is a must-have for most home equity loans, especially in areas with a history of flooding. This insurance shields both you and the lender in the event of property damage. When you apply for a home equity loan, lenders will want to see proof of property insurance. Making sure you have the right coverage can not only help you secure the loan but also potentially influence the rates you’re offered.
Useful Tools & Calculators
Online tools can help you make decisions about the loan amount and loan type you’re going to choose. 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
In Murfreesboro, closing costs typically run from 2% to 5% of the loan. These fees can include the appraisal, credit report, document preparation, origination, notary, title search, and title insurance. When you compare offers from different lenders, don’t just look at interest rates — consider fees as well.
Tax Deductibility of Home Equity Loan Interest
The interest on a home equity loan could be tax deductible if it’s used to improve your home. For those who are married and file jointly, you can deduct interest on loans up to $750,000; for single filers, that’s up to $375,000. Just remember, you need to itemize your deductions to claim this benefit so a consultation with a tax advisor might be in order.
Alternatives to Home Equity Loans
There are other ways to borrow based on your home equity, so before you set your sights on a home equity loan, it’s worth exploring a home equity line of credit (HELOC) and a cash-out refinance. All three tap into your home’s equity, but each comes with its own set of features and requirements.
Home Equity Line of Credit (HELOC)
A HELOC is similar to a credit card in that you have a certain limit you can borrow up to. You only pay interest during the draw period (a HELOC interest-only calculator can be helpful at this time). Then after some time, typically 10 years, you’ll pay back the principal and interest (this is when a HELOC monthly payment calculator is handy).
To qualify, you typically need a credit score of 680 or higher (700 is preferred) and a debt-to-income ratio of less than 50% (36% is the ideal). When you consider a HELOC vs. a home equity line of credit, HELOCs tend to be best for people who aren’t sure exactly how much they will need to borrow or for expenses that will be covered over time instead of all at once.
Cash-Out Refinance
A cash-out refinance replaces your existing mortgage with a larger one, providing you with a lump sum based on your home equity. As you consider a cash-out refinance vs. a home equity line of credit, these are some differences: Qualifying for a cash-out refinance is often more accessible than for home equity loans or HELOCs, typically requiring a credit score of 620 or higher and a debt-to-income ratio under 43%. Rates can be fixed or variable, and unlike with a home equity loan or HELOC, you’ll have just one payment to manage.
Here’s a look at how the three options stack up:
| 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 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
Home equity loans are a powerful resource for homeowners seeking to leverage the equity in their property. Cultivating a robust credit standing, managing your DTI ratio, and having a solid base of home equity can lead to more favorable loan terms. Alternatives like a HELOC or cash-out refinance present different benefits. Always weigh your options, comparing lenders and loan products to pinpoint the best match for your circumstances.
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?
You can use the funds from a home equity loan for any purpose. Some borrowers fund major home improvements or pay for a child’s college education. Others consolidate higher-interest debts. Before signing on to a home equity loan, make sure how you’re using the money supports your long-term financial plan and run the numbers to ensure that you’re able to make the monthly payments.
What do 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 term. For instance, a 20-year fixed-rate loan at 8.00% interest would mean approximately $418 per month. At a 7.00% rate, payments would be $388.
What’s the monthly payment on a $100,000 HELOC?
A $100,000 HELOC often comes with a variable interest rate. During the draw period, you might only need to pay interest on the funds you use. Once the draw period concludes, you’ll pay both the principal and interest. If you were repaying the full $100,000 over a period of 20 years and the interest rate held steady at 8.00%, your monthly payment would be $836.
What might prevent you from securing a home equity loan?
There are a few things that could stand in the way of securing a home equity loan. Lenders often look for a minimum credit score of 680, and a DTI ratio below 50%. And if you don’t have at least 20% equity in your home, a home equity loan could be out of reach.
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-Q225-353
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 Greenville, SC Today
GREENVILLE HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in Greenville, 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 Greenville.
Key Points
• Home equity loan rates are influenced by Federal Reserve policies, local market conditions, and borrower profiles.
• Comparing rates from different lenders can help you find the most competitive terms.
• Even an interest rate that’s a fraction of a percentage point lower can translate to substantial savings in the long run.
• To secure the most favorable rates, aim for a credit score of 700 or above and a debt-to-income ratio of 36% or less.
• The interest on home equity loans may be tax-deductible if funds are used for home improvements.
Introduction to Home Equity Loan Rates
Home equity loans are a smart way for homeowners to get equity out of their home. We will examine current home equity loan rates in Greenville, South Carolina, and explain how lenders decide what rate you will be offered, so that you can find the best deal for your situation.
Along the way we will explain what a home equity loan is and how it differs from other methods of borrowing. By the end of this guide, you will be well equipped to shop for a home equity loan and make the best financial decision for your needs.
Recommended: Different Types of Home Equity Loans
How Do Home Equity Loans Work?
A home equity loan is a second mortgage that leverages the value of your home. You’ll receive a lump sum, which you’ll immediately begin to repay in fixed monthly installments over a period of five to 30 years. Because these loans are secured by property, they often come with lower interest rates than unsecured personal loans. They also offer a fixed interest rate, which is an attractive feature for many borrowers because payment amounts are predictable.
To qualify, most lenders will look for you to have at least 20% equity in your primary residence. A home equity loan calculator can help you determine what you might be able to borrow. It’s important to have a plan in place for repaying the loan, because if you miss payments your home could be at risk of foreclosure.
Note that a home equity loan is different from a home equity line of credit. We’ll explain a HELOC vs. a home equity loan below.
The Origin of Home Equity Loan Interest Rates
Home equity loan rates are determined by several factors, including economic conditions and your own qualifications as a borrower. The Federal Reserve’s policies can have a big impact on the lending market, specifically the prime rate, and many home equity loan rates are tied to this rate. Lenders are guided by the prime rate, but each individual borrower’s credit score and debt-to-income (DTI) ratio will also play a role in the rate you’re offered. Generally speaking, higher loan amounts and longer repayment terms come with higher interest rates.
How Interest Rates Impact Home Equity Loan Affordability
You probably recall that when you purchased your home, your home loan interest rate was critical. The same is true of a home equity loan. Even a small percentage difference can add up to a significant amount over time. For instance, take a $100,000 home equity loan with a 15-year repayment term. At 8.50% interest, your monthly payment would be approximately $984, with total interest of $77,253. But at 9.50%, your monthly payment jumps to around $1,044. A monthly difference of $60 may not seem so substantial, but over the life of the loan, it means paying an additional $10,000-plus in interest costs.
Take a look at another example, this time for a $75,000 loan repaid over 20 years:
| 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
Predicting interest rate movements is like trying to forecast the weather — there are many variables at play. But a look at the prime rate’s history can give you a sense of perspective on the numbers you’re seeing in the current market. The rate dropped to 3.25% in 2020 and then climbed to 8.50% by 2023. These changes can have a big impact on home equity loan rates.
Some borrowers try to time their application to take advantage of favorable conditions. If you can’t afford to wait, you can secure a more competitive rate by shopping around and getting quotes from multiple lenders before deciding on the rate and terms for your loan.
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
The prime rate is out of your control but focusing on caring for your credit score, keeping your DTI ratio low, and ensuring you have ample home equity can help your case when you’re pursuing a home equity loan. Take these steps before submitting any applications:
Maintain Sufficient Home Equity
You’ll want to ensure you have at least 20% equity in your home so that you are eligible for a home equity loan. Calculating your equity is a breeze — just subtract your mortgage balance from your home’s current value, then divide the product by the home value to arrive at a percentage. You can achieve a robust equity level by making additional payments toward your mortgage principal or doing renovations.
Build a Strong Credit Score
To lock in the most favorable home equity loan rates, set your sights on a credit score of 700 or higher. Lenders consider this a sign of your financial prudence and thus that you are at lower risk of default. To nurture your score, make a habit of timely payments, keep credit card balances in check, and steer clear of unnecessary credit inquiries. Periodically check your credit report for inaccuracies and request a correction to any you find.
Manage Debt-to-Income Ratio
Your DTI ratio is an important indicator of your financial health, and lenders typically look for a DTI below 50%, with the most favorable rates going to customers with a 36% or lower DTI. To improve your DTI, consider paying down your debts, finding ways to boost your income, or both. Calculate your DTI by adding up your monthly debt payments and dividing by your gross monthly income.
Obtain Adequate Property Insurance
Property insurance is a must-have for most home equity loans. This coverage reassures the lender that the collateral on the loan (your home) is paid for in the event of a disaster. Make sure your insurance policy meets your lender’s requirements to avoid any hiccups in the loan process.
Useful Tools & Calculators
A home equity loan calculator can help you estimate the amount you can borrow. But it’s not the only useful thing in the toolbox. Here are a few you might need during your borrowing journey.
Run the numbers on your home equity loan.
-
Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Closing Costs and Fees
Closing costs for home equity loans in Greenville run between 2% and 5% of your loan amount. Typical fees cover the appraisal, credit report, document preparation, origination, notary, title search, and title insurance.
Tax Deductibility of Home Equity Loan Interest
Here’s a potential bonus: The interest you pay on a home equity loan may be tax-deductible if the funds are used for significant renovations. As of 2025, married couples filing jointly can deduct interest on up to $750,000 of qualified home equity loans, while single filers can deduct interest on up to $375,000. To claim this deduction, you must itemize your deductions on your tax return. The tax break can be a significant benefit, potentially offsetting some of the costs associated with borrowing. However, consult a tax advisor to understand how this applies to your specific financial situation.
Alternatives to Home Equity Loans
While home equity loans are a popular choice, there are other options to consider, such as a home equity line of credit (HELOC) and a cash-out refinance. By comparing these alternatives, you can find the best fit for your situation.
Home Equity Line of Credit (HELOC)
A HELOC is similar to a credit card in that you have a certain limit you can borrow up to. You borrow funds as you need them and only pay interest during the HELOC’s draw period (a HELOC interest-only calculator can be helpful at this time). Then after some time, typically 10 years, you’ll pay back the principal and interest (this is when a HELOC monthly payment calculator is handy).
To qualify, you’ll generally need a credit score of 680 or higher (700 is preferred) and a debt-to-income ratio of less than 50% (36% is the ideal). HELOCs tend to be a smart pick for people who aren’t sure exactly how much they will need to borrow or for expenses that will be incurred over time.
Cash-Out Refinance
A cash-out mortgage refinance replaces your existing mortgage with a larger one, providing you with a lump sum based on your home equity. As you consider a cash-out refinance vs. a home equity line of credit, these are some difference: Qualifying for a cash-out refinance is often more accessible than for home equity loans or HELOCs, typically requiring a credit score of 620 or higher and a debt-to-income ratio under 43%. Rates can be fixed or variable, and unlike with a home equity loan or HELOC, you’ll have just one payment to manage.
The Takeaway
If you’re mulling over a home equity loan in Greenville, you’ll want to take a good look at your credit score and DTI ratio and make sure your property insurance is up to snuff. These are the keys to unlocking the best home equity loan rates. Use online calculators to wrap your head around the costs of borrowing. And remember that a HELOC or a cash-out refinance could also be an option. Seek out rates from multiple lenders along the way — it’s the best way to snag the most competitive terms and rates.
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?
The money you borrow with a home equity loan can be used for home improvements, educational expenses, medical bills, or debt consolidation. These loans provide a lump sum with fixed-rate interest, which can make budgeting for repayment easier. In some cases, the interest on a home equity loan may be tax deductible if the funds are used for home improvements.
What’s the monthly payment on a $100,000 HELOC?
A home equity line of credit (HELOC) is a very flexible way to borrow, and monthly payments can change with variable interest rates. During the draw period, which can last 5, 10, or even 20 years, you may only need to pay interest on the amount you’ve borrowed, which isn’t necessarily going to be the full $100,000. If you did use the entire credit line of $100,000, your interest rate for repayment would likely be variable. At an average of 8.00% and a repayment term of 20 years, you would pay $836 per month.
What is the payment on a $30,000 home equity loan?
The monthly payment on a $30,000 home equity loan is affected by the home equity loan interest rate and the repayment term. For a 15-year fixed-rate loan at 7.50%, the monthly payment would be about $278. If you choose a 30-year term at the same rate, the monthly payment would be roughly $210. These payments include both principal and interest. Longer terms offer lower monthly payments but increase the total interest paid over the life of the loan.
What might prevent you from securing a home equity loan?
There are a few things that could prevent you from getting a home equity loan. For example, most lenders require a minimum credit score of 680, a debt-to-income ratio of 50% or less, and at least 20% equity in your home. Additionally, inadequate property insurance, particularly in flood zones, could be a disqualifying factor.
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-Q225-352
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 St. Louis, MO Today
ST. LOUIS HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in St. Louis, MO.
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 St. Louis.
Key Points
• Home equity loan rates in St. Louis are influenced by the prime rate and each borrower’s financial metrics.
• Home equity loans tend to have fixed rates, which means monthly payments are predictable.
• Borrowers with a good credit score and low debt-to-income ratio can secure better rates.
• The interest paid on a home equity loan could be tax-deductible if funds are used to make significant home improvements.
• It’s recommended to compare offers from multiple lenders to ensure a good deal.
Introduction to Home Equity Loan Rates
This guide to home equity loan rates will provide you with the information you need to understand the current home equity loan rates in St. Louis, Missouri, and what factors influence them. We’ll cover the benefits and potential risks of home equity loans, as well as alternative options for how to get equity out of your home. Armed with this information, you’ll be better prepared to get the best available loan option and rates for you.
How Do Home Equity Loans Work?
Before you think about applying for a home equity loan, it’s important to understand what a home equity loan is in the first place. A home equity loan is a second mortgage that uses your home as collateral (assume you are still paying off your original home loan).
If approved, you get a lump sum to use however you wish, and you immediately begin repaying the loan, with interest, in equal monthly payments over five to 30 years. Because your home secures the loan, interest rates are typically lower than unsecured personal loans. To qualify for a home equity loan, you typically need at least 20% equity in your primary residence. A home equity loan calculator can help you figure out what you might qualify for.
Recommended: What Is a Home Equity Line of Credit
Where Do Home Equity Loan Interest Rates Originate?
A key driver of the cost of a home equity loan is its interest rate. The Federal Reserve sets the stage for lending rates because its decisions drive the prime rate, which is the rate lenders typically follow. But lenders adjust the rate they offer consumers based on each applicant’s financial characteristics. So your credit score and debt-to-income (DTI) ratio will play a role in the rate you’re offered. The amount you borrow and the term you choose will also affect your rate. Each lender makes its adjustments independently and has different fees, so it’s important to get quotes from different lenders before committing to a home equity loan.
How Interest Rates Impact Home Equity Loan Affordability
Getting rate quotes and comparing them takes some time and effort. But it pays off if you can secure the lowest available rate for your home equity loan. Even a fraction of a percentage point can make a big difference in how affordable that loan is over time, as you can see from this example of a $75,000 home equity loan repaid over 20 years.
| 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
Some borrowers keep close tabs on the prime rate for insight into where home equity loan rates might be going. Predicting interest rate movements is no easy feat, given the multitude of factors at play. The chart and graphic will provide some perspective on rates in recent years, which hit a low of 3.25% in 2020. You may not be able to time your application to snag a more favorable rate. But you can improve your own qualifications and shop around to find rates from multiple lenders.
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, you’ll want to tidy up your financial life before trying to borrow money. Take these steps before you file your first application:
Maintain Sufficient Home Equity
As noted above, you’ll want to have at least 20% equity in your home. Crunch the numbers by subtracting your outstanding mortgage balance from your home’s estimated value. (Find the latter on an online real estate site.) Let’s say your mortgage balance is $300,000 and your home’s value is $550,000. That leaves you with $250,000 in home equity. Divide your equity number by the home value to arrive at a percentage — in this case, 45%.
Build a Strong Credit Score
Lenders usually look for a credit score of 680 or higher when considering home equity loans, and many prefer a score of 700 or above. A strong credit score demonstrates financial responsibility and can lead to more favorable rates. To build a strong score, focus on making timely payments, keeping credit card balances low, and avoiding new debt. Regularly check your credit report for errors and dispute any inaccuracies.
Manage Debt-to-Income Ratio
Your DTI ratio is a critical piece of the home equity loan puzzle. To determine yours, divide your monthly debts (car loan, student loan, credit card debt, etc.) by your gross monthly income. Lenders typically look for a ratio under 50%, but the sweet spot is 36% or less. The lower your DTI, the better your chances of securing a more competitive rate. To enhance your DTI, consider paying down existing debts and exploring opportunities to boost your income.
Obtain Adequate Property Insurance
Property insurance is often a must-have for home equity loans. Lenders want to be sure that your property, which is the collateral for the loan, is protected. Before you apply, make sure to check with your insurance provider to ensure that your coverage is up to date.
Recommended:Different Types of Home Equity Loans?
Useful Tools & Calculators
Using an online calculator can help you make smart decisions about home equity loans and other types of borrowing. Before you apply, a calculator can help you make sure you’re financially prepared and that the loan fits your budget.
Run the numbers on your home equity loan.
-
Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Closing Costs and Fees
Closing costs for home equity loans typically range from 2% to 5% of the loan amount. These costs cover everything from appraisals and credit reports to the paperwork and notary services. It’s worth shopping around to compare costs and to factor them in when looking at different interest rate offers.
Tax Deductibility of Home Equity Loan Interest
If you’re using your home equity loan to fund significant improvements, or to buy or build a home, the interest you pay could be tax-deductible. In 2024, married couples filing jointly can deduct interest on up to $750,000 of qualified home equity loans, while single filers can deduct interest on loans up to $375,000. To claim this perk, you must itemize your deductions on your tax return rather than taking the standard deduction. It’s a bit of a dance, but a tax advisor can help.
Alternatives to Home Equity Loans
Home equity loans are a solid choice, but it’s always good to know your options. A home equity line of credit (HELOC) and a cash-out refinances are two other ways to borrow against your home equity. Let’s take a closer look at each:
Home Equity Line of Credit (HELOC)
A HELOC is a bit like a credit card. You can borrow in increments, as needed, up to a certain limit (which is based on your home equity). During the draw phase of the HELOC, usually 10 years, you’ll only pay interest on the amount that you draw. A HELOC interest-only calculator can give you a sense of what these payments might look like.
After the draw phase ends, the repayment phase begins and you’ll repay all that you owe with interest, in monthly payments. When thinking about a HELOC vs. a home equity loan remember that HELOC interest rates are variable, so they can increase over time, potentially raising your costs. You can use a HELOC repayment calculator to see how changing interest rates would affect payments.
To qualify for a HELOC, you’ll generally need a credit score of 680 or higher (700 is even better) and a debt-to-income ratio of no more than 50% (36% is ideal). HELOCs are best for those who need to borrow money over time, in increments, and for those who aren’t sure exactly how much they might need to cover a project such as a renovation.
Cash-Out Refinance
A cash-out refinance is a special kind of mortgage refinance that allows you to borrow more than you owe on your existing mortgage, pocketing the difference to use as you wish. Lenders typically allow borrowing up to 80% of your equity for this. You’ll want to aim for a credit score of at least 620 and a debt-to-income ratio under 43%. The cherry on top? Because it’s a totally new loan, you get to choose between fixed or variable rates. Another bonus: A refi leaves you with just one monthly payment to keep track of.
Here’s a quick guide to a cash-out refinance vs. a home equity line of credit and a home equity loan.
| 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 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 St. Louis, it’s essential to grasp the factors that drive interest rates. Building a robust credit score, managing your DTI ratio, and ensuring you have the right property insurance are key steps. What’s more, using tools and calculators to estimate costs and shopping around with different lenders can help you secure the best rates and terms. By giving these aspects the careful consideration they deserve, you’ll be equipped to make a savvy decision about borrowing and seek out the best rates.
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?
Your payment on any HELOC will be based on the amount you have borrowed and the variable interest rate — as well as whether you are in the draw period (paying interest only) or the repayment phase (paying principal plus interest). Your best move is to use a HELOC interest-only calculator (during the draw period) or a HELOC repayment calculator to precisely compute what you owe.
What is the payment on a $25,000 home equity loan?
The monthly payment on a $25,000 home equity loan is determined by the interest rate and the loan term. Let’s say you’re looking at a fixed interest rate of 8.00% over a 15-year term. That would make your monthly payment around $239. Having a consistent payment like this can be a great way to keep your finances in check. But remember, the total interest paid over the term could be quite significant.
What could stop you from getting a home equity loan?
There are a few key factors that could stand in your way of securing a home equity loan. Lenders often look for a credit score of 680 or above, a minimum of 20% equity in your primary residence, and a debt-to-income (DTI) ratio no greater than 50%. If your credit score is low, your home equity is lacking, or your DTI ratio is too high, you may find yourself disqualified.
What are the advantages of a home equity loan?
Home equity loans are a good way to borrow a large sum of money at one time. They often come with lower interest rates than unsecured loans because your home is used as collateral. This makes them a smart choice for significant expenses like home improvements, education, or consolidating debt. Home equity loans’ fixed interest rates make for predictable monthly payments. Plus, if you use the funds for home upgrades, the interest you pay could be tax-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-Q225-351
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 Lexington, KY Today
LEXINGTON HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in Lexington, KY.
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 Lexington.
Key Points
• Home equity loan rates are influenced by your credit score and debt-to-income ratio, but also by economic policy and the prime rate.
• Home equity loans usually have fixed rates so monthly payments are always the same.
• Aim for a credit score of 700 or higher and a debt-to-income ratio below 36% for the best rates.
• You’ll need thorough property insurance coverage for most home equity loans.
• Online calculators can help you see how much you could borrow and what your payments might be.
Introduction to Home Equity Loan Rates
Home equity loans are a valuable financial tool if you’re a homeowner looking to get equity out of your home in Lexington, Kentucky. This article will explain how these rates are influenced by both economic trends and personal financial factors. We’ll also provide practical advice on how to qualify for the lowest rates and explore the various uses and alternatives to home equity loans. First step: Make sure you understand what a home equity loan is.
How Do Home Equity Loans Work?
A home equity loan is a second mortgage (assuming you are still making payments on your original home loan). It uses your home as collateral, providing a lump sum of money for a variety of uses. People often use these loans to cover home renovations, education expenses, or to consolidate higher-interest debt. The loan amount is disbursed all at once and is repaid in fixed monthly installments over a period of five to 30 years. You begin the repayment process immediately. Because the loan is secured by your home, interest rates are typically lower than with unsecured personal loans. But the upshot is, if you don’t make your payments, your home could be at risk of foreclosure.
Most home equity loans have fixed interest rates, which means your interest rate and monthly payments will remain the same throughout the life of the loan. To qualify, you generally need at least 20% equity in your home. For example, if your home is valued at $500,000 and your mortgage is $350,000, you have $150,000 in equity. Many lenders offer loans of up to 85% of equity, which would be $127,500 in this example. A home equity loan calculator can help you figure out how much you might be able to borrow.
Where Do Home Equity Loan Interest Rates Originate?
The Federal Reserve plays a big part in interest rates on different types of home equity loans. Its policies have a ripple effect on the lending market, influencing the prime rate that lenders use as a baseline for the rates they offer customers. But your financial profile is important, too. Each lender will adjust the interest rate it offers based on your credit score, debt-to-income (DTI) ratio, and the amount and term of your loan. This is why it’s important to shop around when looking for a loan and get rate and term information from a variety of lenders.
How Interest Rates Impact Home Equity Loan Affordability
The interest rate you secure for your home equity loan can make a world of difference in its affordability over time. Even a seemingly small variation in rates can add up to significant savings or expenses. Consider a $100,000 home equity loan with a 15-year repayment term at 8.50% interest. It would have a monthly payment of $984, and total interest of $77,253. But bump that rate up to 9.50%, and you’re looking at a monthly payment of $1,044, with total interest paid rising to $87,961. That’s $10,700 more over the life of the loan.
Here’s another example of a $75,000 loan repaid over 20 years:
| 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
Predicting interest rate movements with absolute certainty is no easy task, given the multitude of factors at play. However, a glance at the recent history of the prime rate can provide some useful perspective. The prime rate dipped to a mere 3.25% in 2020 and rose to a hefty 8.50% by 2023. You might consider timing your loan application to coincide with favorable economic conditions, but this isn’t always possible. Focus instead on making sure your personal qualifying factors, such as your credit score, are in good shape before you seek a loan.
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 favorable home equity loan rates in Lexington, Kentucky, there are a few things you can do before you file your application to ensure you present the best possible face to a lender. Here are four to-dos:
Maintain Sufficient Home Equity
To be eligible for a home equity loan, you must have at least 20% equity in your home. Calculating your equity is simple: Just subtract your mortgage balance from your home’s current value, then divide the product by the current value to arrive at a percentage. If you’re close to 20% but not quite there, wait until you’ve made some more mortgage payments.
Build a Strong Credit Score
For the most favorable home equity loan rate, set your sights on a credit score of 680 or higher. Many lenders even like to see a 700 or above. A high score shows you’re a responsible borrower. Keep your credit score shining by making timely payments, keeping your credit card balances low, and steering clear of new credit inquiries in the months leading to your loan application. Periodically review your credit report and request corrections on any inaccuracies. A history of financial prudence will have lenders lining up to offer you the best deals.
Manage Debt-to-Income Ratio
Your debt-to-income (DTI) ratio is a crucial number when it comes to qualifying for home equity loans and getting lower rates. Lenders typically look for a DTI ratio of 50% or less, but the magic number to aim for is 36% or lower. To manage your DTI, you can focus on paying down current debts, increasing your income, or both. A lower DTI can not only help you get approved, but it can also help you get better loan terms.
Obtain Adequate Property Insurance
Property insurance is a must-have for most home equity loans, especially if you live in an area prone to natural disasters. It’s a win-win: You’re protected, and so is your lender, ensuring your home remains a solid investment. When you apply for a home equity loan, your lender will check that you’ve got the right coverage. If there’s any question about what type of coverage you need, feel free to ask the lender for details.
Useful Tools & Calculators
Before you take the leap and apply for a home equity loan, you can use online calculators to get a sense of your potential borrowing power and what your monthly payments might look like. 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
Closing costs for home equity loans usually fall between 2% and 5% of the loan amount. These fees take care of a variety of services, such as the home appraisal, credit reports, document preparation, and title insurance. While no-closing-cost loans are an option, they often come with higher rates.
Tax Deductibility of Home Equity Loan Interest
The interest on your home equity loan could be tax-deductible if you use the funds for significant home improvements, or to build or buy a home. As of 2025, married couples filing jointly can deduct interest on up to $750,000 of qualified home equity loans, while single filers can deduct interest on up to $375,000 worth of loans. To claim this deduction, you must itemize your deductions on your tax return, so you might want to speak with a tax advisor.
Alternatives to Home Equity Loans
Homeowners in Lexington have options when it comes to tapping the equity in their home. A home equity line of credit (HELOC) and a cash-out mortgage refinance are worth considering before you make a firm decision about your borrowing plan.
Home Equity Line of Credit (HELOC)
A HELOC is similar to a credit card in that you have a certain limit you can borrow up to. You only pay interest during the draw period (a HELOC interest-only calculator can be helpful at this time). Then after some time, typically 10 years, you’ll pay back the principal and interest (this is when a HELOC monthly payment calculator is handy).
To qualify, you’ll likely need a credit score of 680 or higher (700 is preferred) and a debt-to-income ratio of less than 50% (less than 36% is ideal). When you consider a HELOC vs. a home equity loan, HELOCs tend to be best for people who aren’t sure exactly how much they will need to borrow or for expenses that will be incurred over time.
Cash-Out Refinance
A cash-out refinance replaces your existing mortgage with a larger one, providing you with a lump sum based on your home equity. As you consider a cash-out refinance vs. a home equity line of credit, these are some differences: Qualifying for a cash-out refinance is often more accessible than for home equity loans or HELOCs, typically requiring a credit score of 620 or higher and a debt-to-income ratio under 43%. Rates can be fixed or variable, and unlike with a home equity loan or HELOC, you’ll have just one payment to manage.
The Takeaway
When you’re looking for a way to borrow based on your home equity in Lexington, it’s important to understand the factors that can influence the rates you’re offered. Building a strong credit score, keeping your DTI ratio in check, and making sure you have enough property insurance are all important steps to getting the best rates. Using online calculators can help you get an idea of how a loan will affect your finances. And remember to seek out offers from multiple lenders to find the best interest rate and terms for your needs.
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?
Home equity loans are a smart way to finance a big purchase, cover the cost of a home renovation, or consolidate high-interest debt. Because the loan is secured by your home, interest rates are typically lower than they would be with an unsecured loan.
What’s the monthly payment on a $50,000 home equity loan?
The monthly payment on a $50,000 home equity loan can fluctuate with the interest rate and loan term. For instance, at a 7.00% interest rate over a 15-year term, you’re looking at around $449 per month. But if the interest rate bumps up to 8.00%, your monthly payment would rise to about $478. This is why it’s important to secure the best home equity loan interest rate you can.
What’s the monthly payment on a $30,000 home equity loan?
The payment on a $30,000 home equity loan is determined by the interest rate and loan term. For a 20-year fixed-rate loan at 8.00%, for example, the monthly payment would be approximately $251. If you had an interest rate of 9.50%, your monthly payment would rise to $280.
What is the monthly payment for a $100,000 HELOC?
The beauty of a home equity line of credit (HELOC) is its flexibility. During the draw period, which can last 5, 10, or even 20 years, you may only need to pay interest on what you borrow, which isn’t necessarily going to be the full $100,000. If you did use the entire credit line of $100,000, your interest rate for repayment would likely be a variable one. But at an average of 8.00% and a repayment term of 20 years, you would pay $836 per month.
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-Q324-348
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 Colorado Springs, CO Today
COLORADO SPRINGS HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in Colorado Springs, CO.
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 Colorado Springs.
Key Points
• Home equity loan rates are influenced by the borrower’s credit score, equity, and debt-to-income level.
• Comparing offers from multiple lenders is the smart way to find the best deal.
• Home equity loans’ fixed rates make for predictable payments, which is great for budgeting.
• Even a small rate difference can make a big difference in your overall interest costs.
• Keep your credit score at 700 or above and your DTI ratio under 36% to snag lower rates.
Introduction to Home Equity Loan Rates
Interest rates are an important consideration when you are thinking about how to get equity out of your home in Colorado Springs, Colorado. This article will help you understand how interest rates work and how to best prepare for the process of obtaining a home equity loan. We’ll cover the factors that affect your rate and provide tips for how you can get the best deal. By the time you finish reading, you should have a better idea of how to find the best option for your financial needs.
How Home Equity Loans Work
A home equity loan allows you to borrow against the difference between your home’s value and what you owe on your mortgage — also known as your equity. Many lenders will let you borrow up to 85% of your equity. If you qualify, you’ll receive the loan as a lump sum and immediately begin to repay it, plus interest. These loans typically come with fixed interest rates, and because the loan is guaranteed by your home, the rates are often lower than they would be with an unsecured loan. Another important part of what a home equity loan is: It’s a second mortgage. And that means if you fail to repay the loan, you could lose your home to foreclosure.
To qualify for a home equity loan, you’ll need to show that you have at least 20% equity, good credit, and a reasonable debt-to-income (DTI) ratio. You can figure out how much you might be able to borrow by using a home equity loan calculator.
Recommended: What Is a Home Equity Line of Credit?
The Source of Home Equity Loan Interest Rates
The interest rates on different types of home equity loans are a product of both the larger economic landscape and your personal financial picture. Lenders typically set their base interest rates by adding a margin to the prime rate, which is closely tied to actions of the Federal Reserve. But from there, they decide the rates they offer individual consumers based on the borrower’s credit score and DTI ratio, among other factors. In general, the higher your credit score and the lower your DTI number, the lower the interest rate you will be offered. Loan amount and loan term also affect the interest rate. Because lenders interpret these variables slightly differently, it’s important to get rate quotes from multiple lenders before making a decision about a loan.
How Interest Rates Impact Home Equity Loan Affordability
Just as the interest rate on your original home loan was a big deal, so the rate you obtain for a home equity loan can have a significant effect on the cost of borrowing. Even the slightest variation in rates can lead to significant differences in the total interest you’ll pay. For instance, a $100,000 loan at 8.50% over 15 years would mean a monthly payment of $985 and total interest of $77,253. But nudge that rate to 9.50%, and suddenly your payment is $1,044, with the total interest ballooning to $87,961. That’s an extra $10,700 in interest over the loan’s life.
| 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
Predicting the rise and fall of interest rates is no easy task, but if you’re in the market for a home equity loan, you can keep your eye on the prime rate to get a sense of where home equity loan rates may be going. Looking at the history of the prime rate can also help you understand whether current rates are high or low based on historical trends. Some homeowners in Colorado Springs may try to time their home equity loan application to a dip in rates, but it’s not always possible. Fortunately there are things you can do to help you get the best available rate, whenever you apply.
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 lowest available home equity loan rate from a lender, you’ll want to make sure your application is as strong as possible. Here are four things to do before you begin to apply.
Maintain Sufficient Home Equity
To be eligible for a home equity loan, you’ll need to have at least 20% equity in your home. Give your equity a check: Subtract your mortgage balance from your home’s current value. Then divide the answer by the home value to arrive at a percentage of equity. If you’re near 20% but haven’t quite cleared the mark, consider making extra payments toward your mortgage principal or delaying your loan application until you have more equity under your belt.
Build a Strong Credit Score
Lenders usually look for a credit score of 680 or higher for home equity loans, with many favoring a score of 700 or above. A robust credit score is a testament to your financial prudence and can lead to more attractive home equity loan rates. To bolster your score, focus on making timely payments, maintaining low credit card balances, and steering clear of new debt. Regularly perusing your credit report and disputing any inaccuracies can also give your score a lift.
Manage Debt-to-Income Ratio
Your debt-to-income (DTI) ratio is a critical element in securing a home equity loan. This ratio, which compares your monthly debt commitments to your gross monthly earnings, is typically expected to be under 50%, with the sweet spot being below 36%. A lower DTI ratio shows your capacity to handle monthly payments and may lead to more favorable loan terms. To enhance your DTI, consider reducing your existing debts, boosting your income, or even better, both.
Obtain Adequate Property Insurance
Property insurance is a must-have for home equity loans, especially in areas vulnerable to natural disasters. In Colorado Springs, where the wildfire risk is real, having the right coverage not only secures your loan but can also impact the rate you’re offered.
Useful Tools & Calculators
Online calculators can help you get a handle on the costs of a home equity loan. Here are three you will likely find yourself returning to again and again during the borrowing process.
Run the numbers on your home equity loan.
-
Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Closing Costs and Fees
When it comes to closing costs for home equity loans, you’re typically looking at 2% to 5% of the loan amount. These fees include the cost of an appraisal, credit report, document preparation, origination, notary, title search, and title insurance. You’ll want to factor these costs into your decision when you’re comparing loan offers from different lenders. Some lenders offer “no closing cost” arrangements, but these loans may come with higher overall costs.
Tax Deductibility of Home Equity Loan Interest
Here’s a nugget of financial wisdom: The interest on home equity loans can be tax-deductible if the funds are used to improve the home. As of 2025, married couples filing jointly can deduct interest on up to $750,000 of qualified home equity loans, while single filers can deduct interest on loans up to $375,000. To claim this deduction, you must itemize deductions on your tax return rather than taking the standard deduction. Consult a tax advisor to understand how this applies to your specific financial situation.
Alternatives to Home Equity Loans
Home equity loans are popular in Colorado Springs, but there are other options to consider if you’re interested in taking advantage of the equity you’ve built up in your home. Here’s a closer look:
Home Equity Line of Credit (HELOC)
A HELOC functions much like a credit card but is backed by your home equity — and your equity also determines the credit limit you’ll be offered. During the HELOC’s “draw” period, you can borrow money as you need it, up to your limit, and you’ll only have to pay interest on the amount that you borrow. (A HELOC interest-only calculator can help you figure out what your monthly payments would be.)
After the draw period comes the repayment period, when you’ll repay what you have borrowed, with interest. A HELOC repayment calculator is useful then. The big difference between a HELOC repayment calculator is that HELOCs usually have variable interest rates, which means your costs could go up or down over time. To qualify, you’ll generally need a credit score of 680 or higher (though 700 is preferred) and a debt-to-income ratio below 50% (though ideally, you want to be below 36%). HELOCs are useful when you aren’t sure exactly how much you will need to borrow, or when your costs will be spread out over time.
Cash-Out Refinance
A cash-out refinance is a type of mortgage refinance that lets you replace your existing mortgage with a new, larger one and pocket the difference to use as you wish. The amount you can cash out is determined by your home equity, with most lenders allowing you to borrow up to 80%. Typically, you’ll need a credit score of 620 or higher and a debt-to-income ratio under 43% to qualify. The beauty of a cash-out refi is that you can choose between fixed or variable rates.
As you’re considering a cash-out refinance vs. a home equity line of credit or a home equity loan, examine your current mortgage rate. If you already have a low rate, you might find it’s better not to refinance.
The Takeaway
When you’re ready to consider a home equity loan in Colorado Springs, remember that a strong credit score, a low DTI ratio, and good property insurance coverage can help you secure the best rates. Use online calculators to estimate costs and payments. And, of course, explore alternatives like HELOCs and cash-out refinances to see what best fits your financial needs. Taking these steps and getting rates from multiple lenders can help you potentially save on interest charges.
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 a smart way to finance a large purchase, fund a home improvement project, or cover a debt consolidation. The flexibility of these loans makes them a popular choice for homeowners. However, it’s important to use the funds responsibly and ensure the loan aligns with your long-term financial goals. Before applying, consider how the loan will impact your monthly budget and overall financial health.
What’s the monthly payment on a $50,000 home equity loan?
The monthly payment for a $50,000 home equity loan changes 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. A home equity loan calculator can help you estimate these payments and plan your budget accordingly.
What is the monthly payment on a $25,000 home equity loan?
The payment on a $25,000 home equity loan depends on the interest rate and the loan term. For example, at an 8.00% interest rate over a 20-year term, the monthly payment would be $209. This fixed-rate loan means your monthly payment won’t change, which can be helpful for budgeting.
What might prevent you from qualifying for a home equity loan?
There are several factors that can disqualify you from getting a home equity loan. Lenders typically want to see that you have at least 20% equity in your home, a strong credit history, and a low debt-to-income ratio. A credit score below 620 or a DTI ratio above 50% might make it difficult to qualify.
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-Q225-346
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.
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