How much will a $150,000 home equity loan cost per month now that rates are falling?

Homeowners currently have a valuable asset at their disposal: their home equity. With home values rising steadily over the last few years, homeowners now have a lot of equity to tap into — about $327,000 on average. The amount of accessible equity — which is the total that can be borrowed against while maintaining a 20% equity cushion — now amounts to $214,000. That high amount of equity, coupled with the recent interest rate cut by the Federal Reserve, has made this an opportune moment to consider a home equity loan.

Home equity loans are generally one of the most cost-effective borrowing options, as these loans are secured by the equity in your home, meaning that the rates are typically lower compared to options like credit cards and personal loans. And the recent 50 basis point reduction in the Fed’s benchmark rate pushed home equity loan rates down further, making them even more attractive. So, if you’ve been planning to borrow money from your home’s equity, this could be a good time to make your move.

Before you take out a home equity loan, though, it’s important to understand the monthly costs associated with this type of borrowing. So, how much would a $150,000 home equity loan cost today now that rates have fallen? Below we’ll break down what those payments could look like based on today’s rates.

Home equity loan rates can change quickly. Compare your top rates and lock one in today.

How much will a $150,000 home equity loan cost per month now that rates are falling?

Unlike home equity lines of credit (HELOCs), which offer variable rates that can change with the wider rate environment, most home equity loans come with fixed rates, so the rate you start your loan with is the rate you’ll end with (unless you refinance your home equity loan at some point). That keeps your payments consistent from month to month. 

With a home equity loan, the cost of your monthly payments depends heavily on the loan term and the interest rate you’re offered. There are two common home terms to choose from: 10-year and 15-year loan terms, with today’s 10-year loan terms offering average rates of 8.50% and 15-year loan terms offering average rates of 8.41%. Here’s what the monthly payments would look…