Compare HELOC rates in Nevada.

Introduction to HELOC Rates

If you’re thinking about how to get equity out of your home in Nevada and searching for the best home equity line of credit interest rates, we have you covered. Below you’ll find key points to consider when exploring HELOCs, plus information on how to cultivate the credit score HELOC lenders are looking for.

But first: let us explain what is a home equity line of credit so you can make sure this is the right financing option for you.

What Is a HELOC?

A HELOC is like a credit card with a credit limit that’s based on the home equity that you have built up paying off your home loan each month. You can borrow up to 90% of your home’s value minus your mortgage. Because it’s a credit line, not a lump sum loan, you can borrow as you need money and you only pay interest on the amount of the credit line you actively use. And because borrowers use their home as collateral, a HELOC often has a lower interest rate than many other types of borrowing.

A HELOC has a variable interest rate (meaning it can change during the course of the term), and it also has two phases: draw and repayment. Understand the difference.

The Draw Period

During the draw period of a HELOC, which typically lasts a decade, you can access funds up to your credit limit, make payments to lower your balance, and borrow the money again. Borrowers are usually required to make interest payments during this period, but payments toward the principal may be optional. Using a HELOC interest only calculator can help you determine the potential minimum monthly payment during the draw period.

The Repayment Period

During a HELOC’s 10- to 20-year repayment period, borrowing ends and the principal is repaid with interest. Interest is paid only on the borrowed amount, not the entire credit limit. The variable interest rate can continue to increase (or decrease) during this time.

Where Do HELOC Interest Rates Come From?

HELOC interest rates are tied to the prime rate and can be influenced by broad economic and housing market factors. The prime rate is the benchmark interest rate that banks charge their most creditworthy customers. Federal Reserve policy decisions regarding interest rates can influence the prime rate. Not every borrower gets the prime rate, of course, and lenders adjust the rates they offer HELOC applicants in Nevada based on other factors that we will get to below.

How Interest Rates Impact HELOC Affordability

Interest rates can significantly affect the affordability of a HELOC. When it’s time to repay a $60,000 HELOC, having an interest rate of 6.00% over a 20-year term would equal a monthly payment of $430. A rate of 7.00% would be a payment of $465. Over the entire term, the customer with the 7.00% rate would pay almost $8,500 more in interest. The more you borrow and the higher the interest rate, the larger these numbers get.

HELOC Interest Rate Trends

Fluctuations in the prime interest rate may give you a sense of which direction HELOC rates are headed. It’s helpful to have a sense of the average prime rate’s recent trends if you’re looking at current rates. Since 2018, the prime rate has ranged from a low of 3.25% in 2020 to a high of 8.50% in 2023. The chart and graphic below will give you a sense of how much the prime rate typically swings.

Historical Prime Interest Rate

Historical U.S. Prime Rates

Factors Influencing HELOC Rates

A number of factors can influence HELOC rates, including home equity, credit score, and income. You’ll want to understand the details before you submit an application.

Home Equity

Having substantial equity in your home is important with HELOCs and all different types of home equity loans. For a HELOC, homeowners typically need at least 15% to 20% equity in their property to qualify, and the more equity you have, the better interest rate you may be offered.

Credit Score

Maintaining a favorable credit score (680 or higher) is of utmost importance when seeking a HELOC at a good interest rate. Some lenders prefer a score exceeding 700. A higher credit score serves as a reliable indicator of reduced risk, thereby enhancing your prospects of qualifying for highly competitive rates on your home equity line of credit.

Stable Income

A lender will look at your overall income, but how consistent that income is will matter as well. A stable income serves as a strong indicator of a lower risk of default. If your income varies, you may be asked to provide more income documentation during the application process.

Loan-to-Value Ratio

Lenders usually require a combined loan-to-value (LTV) ratio of 90% or less for a HELOC. Your combined LTV ratio is the amount you owe on your mortgage plus the amount you wish to borrow with a HELOC, divided by the estimated value of your home. (For this purpose it’s fine to use a home value estimate from a real estate web site; eventually a lender will ask for an appraisal.)

Variable vs Fixed Interest Rates

As noted above, HELOC rates are usually variable, meaning they are subject to fluctuation over the course of the repayment period. They can adjust up or down depending on prime rates, and usually there will be some minimum and maximum adjustment level spelled out in your HELOC agreement. Fixed interest rates are one of the ways a home equity loan is distinguished from a HELOC.

Tools & Calculators

One way to assess your comfort level with variable interest rates is to plug possible rate numbers into an online calculator. You’ll be able to see what your monthly payment might be and how much your borrowing may cost in interest over the long term. Here are three useful calculators:

How to Qualify for a Competitive HELOC Rate

To qualify for the most competitive HELOC rates available in Nevada, it is crucial to focus on improving your credit score and maintaining a low debt-to-income ratio, among other things. Here’s your to-do list:

Take Good Care of Your Credit Score

By making payments on time and keeping your credit card balances below the max, you can significantly enhance your credit score, which will help you qualify for the most favorable HELOC rate in Nevada.

Assess Your Home Equity

Regular mortgage payments help in building home equity over time. Home equity can be enhanced through renovations that boost the property’s value. Increased home equity can lead to better terms and higher amounts when applying for a home equity line of credit. To ensure you have at least 15% equity in your home, subtract the amount you owe on your mortgage from your home’s estimated value, then divide by the estimated value.

Calculate Your Debt-to-Income Ratio (DTI)

Your debt-to-income (DTI) ratio, calculated by dividing your monthly debt payments by your gross monthly income, serves as a good indicator of your ability to make payments on a HELOC. Typically, home equity lenders prefer a DTI below 50%, though some like a ratio that’s lower still: 36% or less.

Application Process for a HELOC in Nevada

The application process for a home equity line of credit (HELOC) in the state of Nevada involves a series of specific steps. Take them one by one and doublecheck everything for accuracy as you go, and you can help ensure a smooth application process.

Step 1. Run the Numbers

Check that your credit score is at least 680 and that your DTI ratio is under 36%. Assess your home equity to understand — it should be a minimum of 15%. Some lenders offer online prequalification tools that are useful at this stage.

Step 2. Compare Lenders

When seeking the best HELOC rates in Nevada, compare interest rates, qualification requirements, fees, and loan limits. Look at how long the draw and repayment periods are at each lender.

Step 3: Gather Your Documents

Organize all your documents in advance. This typically includes proof of income (such as W2 forms and at least one tax return), and property documents such as proof of insurance. If you’re self-employed, lenders may ask for a profit-and-loss statement and two years’ tax returns.

Step 4: Submit Your Application

You’ll submit your HELOC application online or in person, or even by phone, depending on the lender. Be sure to attach all requested documents at this stage.

Step 5: Get an Appraisal

A home appraisal plays a major role in determining eligibility for a HELOC. If the appraised value of your home exceeds the outstanding balance of your mortgage, you may qualify for a HELOC. The lender will guide you through the appraisal process.

Step 6: Prepare for Closing

Before accessing your home equity line of credit funds, complete the process by signing documents and paying any required fees. Some lenders make funds available as quickly as three business days following the signing.

Tax Benefits and Considerations

Homeowners can deduct HELOC interest if the borrowed funds are used for buying, building, or significantly improving their primary residence. Interest deductions are limited to interest on the first $375,000 of the mortgage principal for individual taxpayers ($750,000 for married couples filing jointly). A tax advisor can help you make sure you qualify for this deduction.

Closing Costs and Fees

HELOC closing costs are lower than those for home buying or refinancing. Key costs include appraisal, application, origination, and administrative fees. Some lenders charge annual maintenance, transaction, inactivity, or early termination fees. Understanding these fees is crucial when considering a home equity line of credit.

Alternatives to HELOCs

HELOC alternatives include home equity loans, cash-out refinancing, and personal loans. If you’re not yet 100% on a HELOC (or even if you are), it’s worth spending some time to compare options to find the best fit for your needs.

Home Equity Loan

Home equity loans offer a fixed lump sum (vs. a line of credit like a HELOC) and are repaid at a fixed interest rate (as opposed to a HELOC’s variable rate). In the HELOC vs. home equity loan comparison, it’s worth noting that homeowners can typically access up to 85% of their equity with a home equity loan. With a HELOC, lenders generally allow up to 90%.

Cash-Out Refinance

Homeowners can use this special type of mortgage refinance to access home equity by refinancing for more than they owe, paying off their first mortgage, and taking the difference in cash.

As you consider a cash-out refinance vs. a home equity line of credit, one major difference is that a refinance gets you a whole new loan, with a new interest rate. If your interest rate on your original mortgage is lower than current rates, you’ll want to look carefully at whether it makes sense to refinance. Another difference? With a refi you, have one monthly payment, while with a HELOC or home equity loan, you’ll have two.

Personal Loan

A personal loan is repaid in regular monthly payments over a set term that can range from two to seven years. It usually comes with a higher interest rate than a HELOC because it is not secured, but some borrowers prefer this because they aren’t comfortable with the idea of using their home as collateral.

Credit Cards

Credit cards come with higher interest rates than HELOCs, which make it costly to carry a large balance from month to month. While credit cards offer flexibility for smaller purchases, a HELOC is often more suitable for larger expenses such as home improvements or debt consolidation.

The Takeaway

Securing the best HELOC rates in Nevada involves comparing offers from multiple lenders and understanding the factors that influence interest rates. By maintaining a good credit score, keeping your debt-to-income ratio low, and ensuring they have substantial home equity, borrowers can access competitive current HELOC rates in Nevada.

SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.

FAQ

What is the monthly payment on a $50,000 HELOC?

The monthly payment for a $50,000 HELOC can fluctuate based on the interest rate and repayment terms. Assuming a 10-year term, here’s the payment amount at several interest rates: $555 (6.00%); $568 (6.50%); $581 (7.00%); $594 (7.50%); $607 (8.00%).

Is a HELOC a smart move for you?

Whether a home equity line of credit (HELOC) is a smart financial decision depends on your specific financial circumstances. You can use a HELOC repayment calculator and plug in low and high interest rates. A HELOC has a variable interest rate. So if you feel you can handle the payments at the low end as well as if they rise, and if you want a flexible borrowing method (vs. a lump sum loan), then a HELOC may be the right move.

What is the monthly payment on a $100,000 HELOC?

Assuming you draw the full amount, secure an 8.50% interest rate, and choose a 20-year repayment term, your monthly payment should be about $868. If your draw amount, term, or interest rate change, the payment amount will change as well.

What are the benefits of a HELOC?

HELOCs offer several benefits, including flexibility in borrowing and repayment. A home equity line of credit allows you to access funds as needed, making it ideal for ongoing projects or unexpected expenses. Additionally, HELOCs often come with lower interest rates compared to other types of loans, making them a cost-effective borrowing option.

Do you need an appraisal for a HELOC?

An appraisal is typically required for HELOCs to determine the current value of your home. This helps lenders assess the amount of equity available and set the borrowing limit for your home equity line of credit. The appraisal process ensures that the loan amount is based on accurate and up-to-date information about your property’s value.

What disqualifies you from getting a home equity loan?

Several factors can disqualify you from getting a home equity loan, including poor credit history, high debt-to-income ratio, and insufficient home equity.

How difficult is it to get a HELOC?

Whether you hit roadblocks in obtaining a home equity line of credit is contingent upon your financial circumstances. Lenders look at various factors, including credit scores, available home equity, and stability of income. By preparing documents carefully and acquiring a good understanding of the application process, individuals can significantly enhance their chances of qualifying for a HELOC.

Does HELOC affect credit score?

HELOCs can impact your credit score in several ways. Applying for a HELOC may result in a hard inquiry, which can temporarily lower your score. Additionally, using a significant portion of your available credit can increase your credit utilization ratio, potentially affecting your score. However, making timely payments on your home equity line of credit can help build a positive credit history over time.

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.

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.

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 .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOHL-Q424-038

Compare HELOC rates in Wisconsin.

Introduction to HELOC Rates

if you’re looking to learn how to get equity out of your home with a HELOC, this guide will accelerate and inform your process of applying, plus help you get a competitive interest rate. You’ll learn about the key factors that influence HELOC rates in Wisconsin. You’ll also find out how to use this information so you can put your best financial foot forward and make informed decisions when you convert your home equity into cash. Let’s start with the basics:

What Is a HELOC?

HELOCs enable homeowners to borrow against their home equity. You can borrow up to 90% of your home’s value, less what you owe on your mortgage. But a HELOC works somewhat like a credit card, meaning that you don’t have to borrow the entire amount all at once, and that is one difference in a HELOC vs. a home equity loan. You can borrow the money as you need it, in increments. But because a HELOC is secured by your home, it usually offers a better interest rate than a credit card or a personal loan.

HELOCs have two separate phases: a draw period followed by a repayment period. It’s important to understand the difference between the two.

The Draw Period

During the draw period (usually 10 years), you can access your HELOC funds up to your credit limit, make payments to pay down your balance, and borrow the money all over again. Borrowers are usually required to make interest payments during the draw period, but paying down the principal may be optional. This gives you control over your finances during the HELOC draw period.

The Repayment Period

The repayment period lasts 10–20 years, and during it, you must repay the HELOC principal with interest. A HELOC repayment calculator can help you understand what your monthly payments and overall interest paid could look like. Since HELOCs carry the risk of foreclosure if borrowers default, it’s important to understand what payments you’ll be required to make, and to research HELOC rates in Wisconsin to ensure you get a competitive deal.

Where Do HELOC Interest Rates Come From?

HELOC rates are influenced by lenders’ prime rate, the benchmark interest rate for their most creditworthy customers. Additional factors influence what individual applicants are offered. We’ll cover those later, but first, you need to understand how big of a deal an interest rate can be.

How Interest Rates Impact HELOC Affordability

Your interest rate makes a big difference when you borrow with a HELOC. If you spend a little time with a HELOC repayment calculator, it can help you understand the influence that rate will have on affordability. Here’s a look at three possible HELOC credit limits with different interest rates and terms:

HELOC Interest Rate Trends

Looking at a history of the average prime rate can give you insight into current HELOC rate trends. As you can see in the chart below, the prime rate has fluctuated notably in the last few years, reaching a low of 3.25% in 2020 and a high of 8.50% in 2023. If you’re working on understanding what is a home equity line of credit and wondering if a 4.00% rate might be in your future, this chart will provide valuable perspective (such low rates are a rarity).

Historical Prime Interest Rate

Historical U.S. Prime Rates

Factors Influencing HELOC Rates

The prime rate is important, but it isn’t the only thing that influences HELOC interest rates in Wisconsin. Factors that are specific to individual borrowers also matter. Understanding them can help you secure the most favorable rates for your line of credit.

Home Equity

If you have a sizable amount of equity in your residential property, it makes you an attractive prospect for lenders and may score you a more attractive interest rate. Homeowners typically need a minimum of 15% equity to qualify for a HELOC.

Credit Score

A credit score of 680 or higher is a great thing when it comes to securing a HELOC. Many lenders look for borrowers with credit scores over 700.

Stable Income

Lenders look hard at the money you earn. They are going to carefully evaluate your ability to repay the HELOC, so income stability is important to them. It’s a good idea to use a HELOC monthly payment calculator to make sure you’ll be able to make your monthly payments.

Loan-to-Value Ratio

Most lenders will require a combined loan-to-value ratio (CLTV) of 90% or less. Compute your CLTV by adding your existing mortgage balance to the amount you hope your line of credit might be, then divide by your home’s appraisal value. Here’s an example:

   Your property is currently valued at $500,000. You still owe $300,000 on your mortgage. You have decided to apply for a $120,000 HELOC.

   $300,000 + $120,000 = $420,000

   $420,000 / $500,000 = .84

   Your 84% CLTV puts you in the right range for many lenders.

Variable vs Fixed Interest Rates

As you just read, HELOCs tend to carry variable interest rates, which are subject to change over the line of credit’s duration. Variable interest rates are often lower to begin with, when you compare them to fixed rates. But by design, they increase or decrease as the market fluctuates.

Tools & Calculators

Online tools can be handy. They will save you time and assist you in calculating approximate payments, or the interest you’ll pay, on a HELOC. Our favorites include a HELOC interest-only calculator, which will help you determine the payments you’ll have to make during the draw period.

How to Qualify for a Competitive HELOC Rate

A “to do” checklist can get you started in your preparation to secure a competitive rate on your HELOC. These tasks will help you think about the factors lenders scrutinize when they determine your eligibility and interest rate. A solid financial standing will enhance your ability to secure different types of home equity loans and credit lines.

Cultivate Your Credit Score

In the past, when you applied for your home loan, your credit score was top priority. It’s just as important now, as you prep to apply for a HELOC. You can build your credit score over time by paying your bills on or before the dates when they’re due. Reducing or eliminating credit card debt is also wise. Review your credit report often, and address errors promptly.

Assess Your Home Equity

Homeowners build home equity with timely mortgage payments. Renovations enhance your equity, too — they not only make your home happier, but also boost its value. If your home equity is in the single digits or teens, getting HELOC approval from a lender may be difficult.

Calculate Your Debt-to-Income Ratio (DTI)

Your DTI ratio is how much you pay each month on the debt you carry (student loans, car loans, personal loans, etc.), divided by your gross monthly income. Home equity lenders tend to look for a DTI below 36%. Some allow up to 50%. Calculating your DTI ratio can help you determine your eligibility for a HELOC, and is an important factor in whether you’ll qualify for desirable terms.

Application Process for a HELOC in Wisconsin

The HELOC application is fairly straightforward, but a clear understanding of each step can help you complete the process efficiently and successfully.

Step 1. Run the Numbers

Check your credit scores and calculate your DTI. You should also get a good estimate of your home equity before you start an application for a HELOC. Some lenders offer online prequalification tools that will help you streamline this process.

Step 2. Compare Lenders

Look into what offers you might be able to qualify for when it comes to interest rates. Also compare lenders’ qualification requirements, credit line minimums and maximums, fees, length of draw and repayment periods, and other details.

Step 3: Gather Your Documents

Pull together paperwork including your proof of income, a detailed employment history, your credit reports, and current documentation of your home’s value.

Step 4: Submit Your Application

You can usually fill out and transmit your HELOC application online. Lenders will also likely let you fill it out by phone or in person. Ensuring that all information you provide is both accurate and complete will prevent delays in your application’s processing.

Step 5: Get an Appraisal

After you submit your application, you’ll need to follow up with a home appraisal to establish your home’s current market value. If the appraisal indicates a value exceeding your outstanding mortgage balance, the lender may approve your HELOC application.

Step 6: Prepare for Closing

Before you can access your HELOC funds, you will need to sign loan documents and most likely pay some fees. (Make sure you fully comprehend all terms and conditions before signing anything, of course.) Some lenders may make funds available in as few as three days following your closing on a HELOC.

Tax Benefits and Considerations

Homeowners can deduct HELOC interest if the funds borrowed are used to buy, build, or significantly improve their primary residence. Interest deductions on the first $375,000 of the HELOC principal are allowed for individual taxpayers ($750,000 is the limit for married couples filing jointly). Consult a tax advisor to help you navigate specific tax implications and confirm eligibility for HELOC-related deductions.

How Much Does a HELOC Cost?

What you’ll pay to establish a HELOC is typically lower than the costs of a home loan or mortgage refinance, which can range from 2 to 5% of the loan amount. The most significant HELOC cost is the appraisal fee, which can be as much as $500. Other costs, like application and administrative fees, will likely be added. Lenders may also charge annual maintenance, transaction, inactivity, and early termination fees. In some cases, they may reduce or waive fees but increase your interest rate. Be sure to compare offers from several lenders.

Alternatives to HELOCs

Other ways to get equity out of your home exist, too, including home equity loans and cash-out refinancing. Personal loans are another option if you prefer an unsecured loan. Carefully consider advantages and disadvantages of each option to choose the one that best meets your requirements.

Home Equity Loan

Unlike a HELOC, a home equity loan can provide a lump sum amount, and you’ll pay it back at a fixed interest rate. Borrowers can usually access up to 85% of the equity they’ve built in their home. Use a home equity loan calculator to estimate your borrowing capacity.

Here’s a quick comparison:

Recommended: What Is a Home Equity Loan?

Cash-Out Refinance

If you’re debating between a cash-out refinance vs. a home equity line of credit, know this: Cash-out refinancing lets homeowners refinance a mortgage for more than what’s owed, and receive the difference in cash. This option suits those needing a large lump sum, and gives you a single monthly payment.

Personal Loan

Personal loans don’t require collateral, so they are a good option for borrowers without significant home equity. A personal loan can get you a lump sum of $1,000–$100,000 that you pay back in regular payments with interest over a set term of 2–7 years. These loans can be used for almost anything, including home improvements, debt consolidation, and other large expenses.

Credit Cards

Credit cards and HELOCs are both forms of revolving debt. Instead of a lump sum of money, you receive access to a credit line, and you can then tap it as needed. Credit cards do, however, come with higher interest rates than HELOCs. That can make them much more expensive if you carry a large balance month after month. While credit cards offer flexibility for smaller purchases, a HELOC can provide a more cost-effective solution for larger expenses like home improvements or debt consolidation.

The Takeaway

A HELOC is a flexible way to tap into your home equity. It’s useful if you need to borrow but aren’t sure exactly how much you’ll ultimately need. You will only pay interest on the amount of the credit line you use at any given time. With good preparation and close attention to your credit score and debt levels, you can present an application that will get you an optimal rate in Wisconsin.

SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.

FAQ

What’s the monthly payment on a $50,000 HELOC?

With an 8.00% interest rate and 10-year term, you’ll pay about $607 monthly. But exactly how much you’ll pay overall will depend on your interest rate and loan term. The same 8.00% interest rate over a 20-year term will cost you $418 per month, but you’ll pay a lot more interest in total.

Is a HELOC a smart move for you?

Whether a HELOC is a good idea now depends on your financial scenario and goals. HELOCs can be ideal for improving your home, consolidating debt, or paying off other large expenses. It’s important, however, to consider interest rates, fees, and the potential impact on your home equity before you make a decision.

What’s the monthly payment on a $100,000 HELOC?

A $100,000 HELOC’s monthly payment depends on both the interest rate and the repayment term you’ve chosen. At 6.00% interest over 20 years, the payment would be $716 per month. An interest rate of 8.00% with the same term would require a monthly payment of $836.

What are the benefits of a HELOC?

A HELOC is a flexible borrowing option. Rather than taking out a lump sum, you can borrow in increments that meet your shorter-term needs, and at a rate that’s likely lower than you’d get with a credit card. The best thing is, you pay interest only on what you borrow at any given time.

Do you need an appraisal for a HELOC?

You do, yes. The appraisal is a crucial step since it helps to establish the value of your home, which in turn determines the amount you’ll be able to borrow. Lenders want to be sure your loan is secured by enough equity in your home. Your lender will give you details about what is required for the appraisal.

What might prevent you from qualifying for a home equity loan?

Some factors will disqualify you from getting a home equity loan, including a bad credit score, a deficit of home equity, and a high level of debt relative to your income.

How hard is it to get a HELOC?

If you can meet lender requirements including a healthy credit score and reasonable debt levels, and you have the minimum equity — usually 15% — in your home, it shouldn’t be too hard to get a HELOC. The most challenging part for many would-be borrowers is compiling financial documents to submit with the application. Taking time to do that carefully and accurately will move the application process along.

How does a HELOC affect your credit score?

When you apply, the HELOC lender will perform a hard inquiry on your credit report. This could cause a temporary decrease in your credit score. Carrying a large balance on your HELOC could also negatively impact your credit utilization ratio, lowering your credit score. But if you make regular payments toward your HELOC, it will demonstrate your ability to use credit responsibly, and that should help you continue to build your score.

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.

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.

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 .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOHL-Q424-059

Compare HELOC rates in New Hampshire.

Introduction to HELOC Rates

A HELOC is a revolving line of credit that works like a credit card, but is secured by your home’s equity. HELOC interest rates are influenced by an array of factors, including economic conditions, the prime rate, and your financial profile as the borrower. Understanding each of these factors can help you navigate the market and get the best available terms on your home equity line of credit.

What Is a HELOC?

A HELOC, or what is known as a home equity line of credit, enables a homeowner to borrow against the equity they have built in their home. With a HELOC, you can borrow up to 90% of your home’s value, minus what you owe on your mortgage.

Because a HELOC works something like a credit card, you don’t need to borrow the entire amount at once. You can take money in increments, as you need it. The HELOC is secured by your home, and so offers you a better interest rate than a credit card or a personal loan.

A HELOC has two phases: the draw period and the repayment period. It’s important to understand the difference between them.

The Draw Period

During the HELOC’s draw period, which usually lasts 10 years, you can access funds up to your credit limit, make payments on your balance, and borrow the money all over again. You will usually make interest-only payments during the draw period. Payments toward the principal are often optional.

The Repayment Period

During the repayment period, lasting 10–20 years, borrowers must repay the principal with interest. A HELOC repayment calculator can help you understand what your potential monthly payments might look like, and the overall interest you’ll pay.

Where Do HELOC Interest Rates Come From?

HELOC rates start with lenders’ prime rates, the benchmark interest rate a lender will offer its most creditworthy customers. Not every borrower is offered this rate, and other factors also influence the terms of your HELOC.

How Interest Rates Impact HELOC Affordability

Interest rates have a significant impact on the cost of a HELOC. The difference in total interest that you’ll pay on a $100,000 HELOC at rates of 6.00% and 7.00% is about $14,000 over a 20-year term. A HELOC interest-only calculator can help you determine the total interest you might pay. This chart includes additional examples, with different principals, terms, and interest rates:

HELOC Interest Rate Trends

Interest rates on HELOCs closely follow a lender’s prime rate. Understanding and anticipating potential interest rate fluctuations can help you make the most informed decisions when applying for a HELOC.

Historical Prime Interest Rate

The prime rate fluctuates, and in recent years has ranged from a low of 3.25% in 2020 to a high of 8.50% in 2023. This rate has a direct influence on New Hampshire HELOC rates.

Historical U.S. Prime Rates

Factors Influencing HELOC Rates

Despite its importance, the prime rate isn’t the only thing influencing HELOC interest rates in New Hampshire. Factors specific to you as a borrower often come into play. Understanding these variables may help you land the most favorable rates for your line of credit.

Home Equity

If you have an impressive level of equity in your residential property, it will make you a safer prospect for lenders. Homeowners typically need 15%–20% equity, at a minimum, to qualify for a HELOC. The amount of equity you hold may also help you get a better interest rate.

Credit Score

To make sure you’ll get a favorable interest rate on your HELOC, you’ll want to maintain a credit score of 680 or higher. In fact, many lenders prefer a credit score of 700 or higher.

Stable Income

Lenders take a close look at your income in order to evaluate your ability to repay the HELOC. Demonstrating a steady income stream and financial stability is essential.

Loan-to-Value Ratio

Lenders tend to require that your combined loan-to-value ratio (CLTV) is 90% or less. You can use this equation to compute your CLTV: Take your existing mortgage balance and add it to the desired amount of your HELOC, then divide that sum by your home value. Here is an example:

   A homeowner owes $300,000 on their mortgage, and they want a $120,000 HELOC. Their property is valued at $500,000.

   $300,000 + $120,000 = $420,000

   $420,000 / $500,000 = .84 (or an 84% CLTV)

Variable vs Fixed Interest Rates

HELOCs often have variable interest rates, as noted above, and that means they are subject to change over the duration of the loan. Variable interest rates initially tend to be lower than fixed rates, but they increase or decrease with market conditions. The fluctuations are likely to have an impact on your HELOC payments, so spend some time plugging different rates into a HELOC monthly payment calculator to see how they could change if rates increase.

Tools & Calculators

Online calculators can be useful as you prepare to borrow against your home equity. They can help you get an idea of how much you may be able to borrow, and what your monthly payments might be. Try plugging different interest rates into the home equity loan calculator to see how a variable-rate loan could change your monthly bills down the road. You’ll find it here along with two other helpful calculators:

How to Qualify for a Competitive HELOC Rate

To secure the best HELOC rates in New Hampshire, you’ll want to make sure your credit score shines. Other things are important to consider, too. Here are some things you may want to do before you apply:

Take Care for Your Credit Score

Keep up with payments and chip away at credit card balances you may be carrying. You’ll not just tidy up your finances — you will nurture your credit score. Regularly review your credit reports for inaccuracies, and correct any you find. The higher your credit score, the more attractive a candidate you will be for a home equity line of credit.

Assess Your Home Equity

Make sure you have 15%–20% equity (or more) in your home. You can keep building equity by making timely mortgage payments, as well as by investing in improvements. Equity grows when your home’s value increases.

Calculate Your Debt-to-Income Ratio (DTI)

You can find your DTI ratio using a simple formula: your total monthly debt payments (car loan, student loan, etc.) divided by your gross monthly income. Many lenders look for a DTI that’s below 36%. Others require 50% or less. Lower is always better. This number is important in determining your HELOC eligibility and the terms you might be offered.

Application Process for a HELOC in New Hampshire

Applying for a HELOC in New Hampshire involves several steps. If you understand the process, your journey to an approval will be smooth and hopefully fruitful.

Step 1. Run the Numbers

Check your credit score, crunch your DTI ratio, and estimate your home equity before you begin applying for a HELOC. Some lenders allow you to prequalify for a HELOC online, streamlining the application process.

Step 2. Compare Lenders

Look at multiple lenders’ interest rates and compare qualification requirements, minimums and maximums, fees, and the lengths of the draw and repayment periods.

Step 3: Gather Your Documents

Pulling together your paperwork or digital documentation is a crucial step in applying for a HELOC. Typically, you’ll need to present proof of income like pay stubs and tax returns, documentation of your home’s value, and statements that verify your mortgage balance. Lenders may ask you for proof of your homeowner’s insurance policy, and a list of your current debts and assets, too.

A lender may ask self-employed applicants for a profit-and-loss statement, as well as two years’ worth of tax returns. Have these documents prepared. It can make the application process go faster and boost your chances of grabbing a competitive HELOC rate.

Step 4: Submit Your Application

If your potential HELOC lender offers an online application portal, it will make the process much more efficient. You can also likely submit by phone, or in person if the lender has a brick-and-mortar branch.

Step 5: Get an Appraisal

After you submit an application, the lender will most likely schedule a home appraisal. This is to determine your property’s current value. If your home appraises at a value higher than your outstanding mortgage balance, the lender may approve your HELOC. The appraisal process can take a few weeks.

Step 6: Prepare for Closing

Before you’ll be able to access and spend your HELOC funds, you will need to sign loan documents and pay some fees. Your lender may make funds available as quickly as three days after you close. Make sure you understand all of your loan’s terms and conditions before signing.

Tax Benefits and Considerations

Homeowners can deduct interest on a HELOC if they use the funds they borrow to buy, build, or significantly improve their primary residence. You can deduct interest on the first $375,000 of the HELOC principal for an individual taxpayer, or $750,000 for a married couple filing jointly. Ask a tax advisor to help you navigate specific tax implications, and confirm the eligibility of HELOC-related Interest deductions.

How Much Does a HELOC Cost?

HELOC costs tend to be lower than those of a typical home loan or mortgage refinance. With a HELOC, the appraisal fee can reach $500, and is the biggest line item. Application and administrative fees may be added. Some lenders bill for annual maintenance, as well as transaction, inactivity, and early termination fees. Alternatively, lenders may reduce or waive fees but charge a higher interest rate.

Alternatives to HELOCs

Every option for how to get equity out of your home offers advantages and disadvantages, so it’s wise to think through your financial objectives.

Below we take a closer look at different types of home equity loans, refinances, and unsecured loans.

Home Equity Loan

What is a home equity loan? Unlike a HELOC, it offers a lump sum of money at a fixed interest rate. Homeowners can borrow up to 85% of their home’s equity with this loan type, and interest rates are usually comparable to those on HELOCs.

Carefully consider the differences between a HELOC vs. a home equity loan:

Cash-Out Refinance

One option that differs a little from a typical mortgage refinance is cash-out refinancing. This lets homeowners tap into their home equity by refinancing their existing mortgage for more than they currently owe, making extra cash available that they can use for any purpose.

Understanding the differences between a cash-out refinance vs. a home equity line of credit can help homeowners make the smartest decisions about their financial options. A cash-out refi will leave you with one monthly payment (a new mortgage) versus the two you’d have when choosing to carry both a mortgage and a HELOC or home equity loan.

It means, too, that you’ll have a new interest rate. If your current home loan provides a favorable rate, look closely at how much more you’ll end up paying in interest if you go with a refi.

Personal Loan

Personal loans are typically unsecured and so carry a higher interest rate than a HELOC or home equity loan. You repay this type of loan in regular payments over a 2- to 7-year period. You can use this option for almost any purpose and, unlike a home loan, it doesn’t require you to use your house as collateral.

Credit Card

Like a personal loan, a credit card comes with a higher interest rate. That aspect can make them much more expensive than HELOCs, especially if you need to carry a large balance from month to month. Credit cards do offer you flexibility for smaller purchases, but a HELOC can be a more suitable choice for larger expenses, including home improvements.

The Takeaway

A home equity line of credit can be a valuable financial tool for any homeowner seeking to capitalize on equity they’ve accumulated in their home. HELOCs provide competitive interest rates and flexible repayment options. Remember, though, that with a HELOC’s variable interest rate, monthly payments can increase unexpectedly. If you aren’t sure how much you’ll need for a major project, a HELOC is a good option to consider.

SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.

FAQ

What is the monthly payment on a $50,000 HELOC?

It depends on the interest rate and loan term, but you can use a HELOC monthly payment calculator to easily determine the monthly payment. Just plug in the rate and term, along with the maximum amount you plan to draw with the HELOC. For example, if you borrow the max on a $50,000 credit line at an interest rate of 7.50%, and your term is 20 years, your monthly payment would be $403.

Is a HELOC a good idea right now?

To determine if a home equity line of credit is a sound financial move, consider your specific circumstances. A HELOC is a flexible way to borrow since you take only what you need at the given moment, up to your approved credit line. You won’t pay interest on the portion of the credit line you don’t use. But HELOCs typically have variable interest rates, so if you prefer a steady monthly payment amount with no changes or surprises, a home equity loan might be more appealing to you. To see how the two might compare, you can play with a home equity loan calculator.

What is the monthly payment on a $100,000 HELOC?

The monthly payment on a $100,000 HELOC will depend on the interest rate and repayment term, plus how much of the credit line you use. If you’ve drawn just $30,000 of your $100,000 limit, the payment might only be a few hundred dollars. If you’ve cashed out the entire $100,000 credit line and are paying 8.00% interest over 20 years, the monthly payment would be $836.

What are the benefits of a HELOC?

A home equity line of credit is flexible. You withdraw only the amount of the credit line needed at any given time, and only pay interest on the amount you borrow. Because it’s secured by your property, a HELOC has a lower interest rate than a personal loan or a credit card. You are able to use the funds you borrow for almost anything. For many homeowners, an open credit line is a financial security blanket in case unexpected costs, such as big-ticket home repairs, come up.

Do you need an appraisal for a HELOC?

Yes. Appraisals are customarily required for HELOCs. Since it is a determination of value for your home, it will be a factor for the lender in deciding your eligibility to borrow, along with your maximum credit line for your home equity line of credit.

What disqualifies you from getting a home equity loan?

A poor credit history, insufficient home equity, or a high debt-to-income ratio can all knock you out of the running for a home equity loan.

How difficult is it to get a HELOC?

Assuming you have your financial ducks in a row and can easily gather the necessary documents (including tax returns, pay stubs, etc.), and that you meet all of the lender’s qualifications, it shouldn’t be hard to get a HELOC. The whole process takes 1–2 months, and it will move faster if you’re organized. Be efficient when deciding which lender you’d like to apply with, and swiftly allow access for the appraiser if a home visit is required.

Does HELOC affect credit score?

It can. Applying for a HELOC entails a hard inquiry, which can temporarily impact your credit score. Your score is also influenced by how you manage your debt, so make punctual payments, and stay on schedule. Otherwise, you really shouldn’t have anything to worry about.

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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.

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 .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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