Home equity borrowing has traditionally been one of the most cost-effective ways to access extra money. But, in recent years, it's been one of the only ways to do so. With inflation surging and interest rates soaring in response, borrowing costs rose accordingly, sometimes in an exponential fashion as homebuyers saw with mortgage interest rates.
Rates on home equity loans and home equity lines of credit (HELOCs) , while not quite immune from this trend, tended to stay in the single digits. And they're coming down again now that the Federal Reserve issued a rate cut in mid-September. For those homeowners looking for a relatively modest sum of $25,000 , then, it makes sense to start crunching these potential costs.
Just note that some lenders will require a larger sum to approve your application. But even if you find a lender who will offer this loan amount, it doesn't mean that you should act without doing the math first. To that end, below we'll calculate exactly how much a $25,000 home equity loan will cost monthly now that interest rates have been reduced.
See how low of a home equity loan rate you could secure online now . Here's what a $25,000 home equity loan costs monthly now that rates were cut The average home equity loan interest rate as of October 2 is 8.39%, but it's a bit higher for two common repayment terms: 10-year and 15-year loans.
Here's what a $25,000 home equity loan would cost with the average rates tied to those repayment terms: 10-year fixed home equity.
