Latest news with #HELOC
Yahoo
16 hours ago
- Business
- Yahoo
HELOC rates today, June 27, 2025: Still moving lower
HELOC rates fell a little bit today. The stock market, particularly the S&P 500, is close to a record high, so the mood on Wall Street is upbeat. When Wall Street is happy, bankers are happy — and depository institutions are the bigger providers of home equity products. The average home equity borrower has over $300,000 in value in their home, according to a new analysis by Cotality, a real estate data firm. That's $120,000 more than they had just five years ago. A home equity line of credit provides access to that cash. Now, let's check today's HELOC rates. According to Zillow, today's rates on a 10-year HELOC are lower by three basis points to 6.57%. The same rate is also available on 15- and 20-year HELOCS. Interest rates on VA-backed HELOCs dropped by six basis points to 6.12%. Homeowners have a staggering amount of value tied up in their houses — more than $34 trillion at the end of 2024, according to the Federal Reserve. That's the third-largest amount of home equity on record. With mortgage rates lingering in the high 6% range, homeowners are not going to let go of their primary mortgage anytime soon, so selling a house may not be an option. Why let go of your 5%, 4% — or even 3% mortgage? Accessing some of that value with a use-it-as-you-need-it HELOC can be an excellent alternative. Dig deeper: Is a HELOC a good idea? Pros and cons to consider. HELOC interest rates are different from primary mortgage rates. Second mortgage rates are based on an index rate plus a margin. That index is often the prime rate, which today is 7.50%. If a lender added 1% as a margin, the HELOC would have a rate of 8.50%. However, you will find reported HELOC rates are much lower than that. That's because lenders have flexibility with pricing on a second mortgage product, such as a HELOC or home equity loan. Your rate will depend on your credit score, the amount of debt you carry, and the amount of your credit line compared to the value of your home. And average national HELOC rates can include "introductory" rates that may only last for six months or one year. After that, your interest rate will become adjustable, likely beginning at a substantially higher rate. You don't have to give up your low-rate mortgage to access the equity in your home. Keep your primary mortgage and consider a second mortgage, such as a home equity line of credit. The best HELOC lenders offer low fees, a fixed-rate option, and generous credit lines. A HELOC allows you to easily use your home equity in any way and in any amount you choose, up to your credit line limit. Pull some out; pay it back. Repeat. Meanwhile, you're paying down your low-interest-rate primary mortgage like the wealth-building machine you are. Today, FourLeaf Credit Union is offering a HELOC rate of 6.49% for 12 months on lines up to $500,000. That's an introductory rate that will convert to a variable rate later. When shopping lenders, be aware of both rates. And as always, compare fees, repayment terms, and the minimum draw amount. The draw is the amount of money a lender requires you to initially take from your equity. The power of a HELOC is tapping only what you need and leaving some of your line of credit available for future needs. You don't pay interest on what you don't borrow. Rates vary so much from one lender to the next that it's hard to pin down a magic number. You may see rates from nearly 7% to as much as 18%. It really depends on your creditworthiness and how diligent a shopper you are. For homeowners with low primary mortgage rates and a chunk of equity in their house, it's probably one of the best times to get a HELOC. You don't give up that great mortgage rate, and you can use the cash drawn from your equity for things like home improvements, repairs, and upgrades. Of course, you can use a HELOC for fun things too, like a vacation — if you have the discipline to pay it off promptly. A vacation is likely not worth taking on long-term debt. If you take out the full $50,000 from a line of credit on a $400,000 home, your payment may be around $395 per month with a variable interest rate beginning at 8.75%. That's for a HELOC with a 10-year draw period and a 20-year repayment period. That sounds good, but remember, it winds up being a 30-year loan. HELOCs are best if you borrow and pay back the balance in a much shorter period of time.
Yahoo
17 hours ago
- Business
- Yahoo
HELOC rates today, June 28, 2025: The home equity line of credit rate sees a slight decrease
HELOC interest rates sagged slightly today, allowing home equity line of credit borrowers a little cushion of time to shop for the best rate. HELOCs are a popular second mortgage option. Home equity borrowing in the first quarter of this year hit nearly $25 billion, up 22% compared to the same time last year — and the highest quarterly volume since 2008, according to the Mortgage Research Network. One reason may be aggressive pricing by lenders. "The average introductory rate on second lien HELOCs has declined by 2.5 percentage points in recent quarters, dropping below 7.5% in March," noted a study by Intercontinental Exchange Mortgage Technology. Now, let's dig into today's HELOC rates. Dig deeper: HELOC vs. home equity loan: Tapping your equity without refinancing This embedded content is not available in your region. According to Zillow, the rate on a 10-year HELOC dropped seven basis points to 6.50% today. The same rate is also available on 15- and 20-year HELOCS. Meanwhile, VA-backed HELOCs rose by three basis points to 6.15%. Homeowners have a staggering amount of value tied up in their houses — more than $34 trillion at the end of 2024, according to the Federal Reserve. That's the third-largest amount of home equity on record. With mortgage rates lingering in the high 6% range, homeowners are not going to let go of their primary mortgage anytime soon, so selling a house may not be an option. Why let go of your 5%, 4% — or even 3% mortgage? Accessing some of that value with a use-it-as-you-need-it HELOC can be an excellent alternative. HELOC interest rates are different from primary mortgage rates. Second mortgage rates are based on an index rate plus a margin. That index is often the prime rate, which today is 7.50%. If a lender added 1% as a margin, the HELOC would have a rate of 8.50%. However, you will find reported HELOC rates are much lower than that. That's because lenders have flexibility with pricing on a second mortgage product, such as a HELOC or home equity loan. Your rate will depend on your credit score, the amount of debt you carry, and the amount of your credit line compared to the value of your home. And average national HELOC rates can include "introductory" rates that may only last for six months or one year. After that, your interest rate will become adjustable, likely beginning at a substantially higher rate. You don't have to give up your low-rate mortgage to access the equity in your home. Keep your primary mortgage and consider a second mortgage, such as a home equity line of credit. The best HELOC lenders offer low fees, a fixed-rate option, and generous credit lines. A HELOC allows you to easily use your home equity in any way and in any amount you choose, up to your credit line limit. Pull some out; pay it back. Repeat. Meanwhile, you're paying down your low-interest-rate primary mortgage like the wealth-building machine you are. This embedded content is not available in your region. Today, FourLeaf Credit Union is offering a HELOC rate of 6.49% for 12 months on lines up to $500,000. That's an introductory rate that will convert to a variable rate later. When shopping lenders, be aware of both rates. And as always, compare fees, repayment terms, and the minimum draw amount. The draw is the amount of money a lender requires you to initially take from your equity. The power of a HELOC is tapping only what you need and leaving some of your line of credit available for future needs. You don't pay interest on what you don't borrow. Rates vary so much from one lender to the next that it's hard to pin down a magic number. You may see rates from nearly 7% to as much as 18%. It really depends on your creditworthiness and how diligent a shopper you are. For homeowners with low primary mortgage rates and a chunk of equity in their house, it's probably one of the best times to get a HELOC. You don't give up that great mortgage rate, and you can use the cash drawn from your equity for things like home improvements, repairs, and upgrades. Of course, you can use a HELOC for fun things too, like a vacation — if you have the discipline to pay it off promptly. A vacation is likely not worth taking on long-term debt. If you take out the full $50,000 from a line of credit on a $400,000 home, your payment may be around $395 per month with a variable interest rate beginning at 8.75%. That's for a HELOC with a 10-year draw period and a 20-year repayment period. That sounds good, but remember, it winds up being a 30-year loan. HELOCs are best if you borrow and pay back the balance in a much shorter period of time.
Forbes
2 days ago
- Business
- Forbes
How Lenders Can Prepare For A Renovation Boom
Mike de Vere is CEO of Zest AI. Forget the house hunt—America is picking up the hammer instead. With mortgage rates stuck between 6% and 7% and many homeowners locked into low rates from the pandemic years, they're choosing to stay put and invest in where they are. Today's housing market isn't about expansion, it's about transformation—fueling what some experts anticipate could be a 5% gain in remodeling activity in 2025. And who can blame them? Home prices keep rising. The median home-sale price in the U.S. as of April 2025 was $414,000, according to the National Association of Realtors (NAR). That's an all-time high for the month of April and marks the 22nd consecutive month of year-over-year home-price increases, according to Bankrate. It's no wonder people are thinking, 'Why buy new when we can improve what we already have?' At the same time, budgets are tight. With inflation still biting, rising unemployment and a staggering 70% of Americans living paycheck to paycheck, homeowners are looking for smarter, more affordable ways to borrow. Enter home equity lines of credit (HELOCs): cost-effective lifelines that can offer quick access to cash when it's needed most. And with summer here—the busy season for home projects—the race is on. Currently, there is about $35 trillion in nationwide home equity, with 30% of banks and 62% of credit unions citing home equity loans as a high priority in 2025. The question isn't whether demand exists, but whether financial institutions have the agility to capture it responsibly. In this high-stakes season, only the lenders that can move quickly, adjust intelligently and make confident decisions will win, all without compromising risk. The Cost Of Sitting On The Sidelines In Uncertain Times In times like these, playing it safe is playing to lose. Lenders who delay updating their strategies risk not only missing out on market share but also letting down the communities they serve. The most successful institutions aren't the ones that slam the brakes on lending when times get tough. They're the ones who have their hands on the steering wheel, adapting intelligently to maintain control over policies and make quick adjustments. These institutions are especially prepared to tackle surging demand, especially during peak seasons. Artificial intelligence (AI) in lending isn't new. Machine learning underwriting models have been helping lenders make smarter, more efficient decisions for years, but what lenders need from AI today is very different than even just a few years ago. What's critical now is actual performance, intelligence with actionable insights, transparency and ongoing monitoring. • Do we have enough intelligence to make impactful changes, confidently? • Do we have inherent and direct control over our policies and cutoffs? • Can we take action quickly, or are we slow movers who adjust policies after delinquencies emerge? • Are our credit and risk teams empowered by meaningful data and model performance? • Do we have the kind of deep intelligence that allows us to plan, not just react? AI-powered lending solutions are helping answer these questions, increasing loan processing efficiency by up to 70% in some cases, while providing the insights needed for strategic decision-making. This isn't just about speed, it's about responsible lending that protects both institutions and borrowers. In this economy, intelligent agility is your superpower. AI is a tool that can help unlock it. A Checklist For Lenders For Renovation Season With renovation season heating up, lenders need more than speed. They need smart, swift decision-making. Here's lenders' three-step renovation season gut check: Check your agility: How quickly can you adjust lending policies when conditions change? Go beyond the basics: Do your tools provide actionable insights beyond basic approval/denial decisions? Scale with confidence: Is manual underwriting slowing you down? Can AI-automated underwriting help you make more accurate, consistent decisions at scale? Institutions that nail this trifecta won't just weather the storm, they'll be positioned to thrive during the coming renovation surge. In today's economic roller coaster, control is your seat belt. However, not every lender has the tech horsepower or in-house data scientists ready to build a safe and sound ride. Instead, they can consider partnering with companies to access tools like AI-automated underwriting, lending intelligence and fraud protection. These AI tools can help maintain portfolio health while extending responsible financing options to homeowners looking to upgrade their nests. The Path Forward: Balancing Caution With Opportunity Let's be real: 2025 won't be smooth sailing. Overly cautious? You'll leave opportunities unexplored and customers underserved, while inadequate risk assessment jeopardizes institutional stability. Not cautious enough? You'll invite risk. But lenders who balance this caution with clarity will be set to come out ahead. For lenders committed to serving their communities responsibly through uncertain times, the message is clear: Equip your team with tools that enable quick, confident decision-making. Your institution's resilience and your customers' financial well-being depend on it. The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation. Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
Forbes
2 days ago
- Business
- Forbes
Today's HELOC & Home Equity Loan Rates: June 27, 2025
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. Home equity loans and home equity lines of credit (HELOCs) allow homeowners to tap into the value of their homes. A home equity loan is a fixed-rate, lump-sum loan that allows homeowners to borrow up to 85% of their home's value and pay that amount back in monthly installments. A home equity line of credit is a variable-rate second mortgage that draws on your home's value as a revolving line of credit. Both options use your property as collateral for your payments, which means your lender can seize your property if you can't repay what you borrow. $100K HELOC Loan Rates Ideal for Medium-Sized Projects A $100K HELOC is suitable for more extensive renovation projects or other significant financial needs. Compare the rates and terms to find the best fit for your situation. $250K HELOC Loan Rates Access More Funds for Major Investments For larger projects or investments, a $250K HELOC provides the necessary funds with various LTV options. Explore these rates to determine the right balance between borrowing capacity and risk. $500K HELOC Loan Rates Maximize Your Borrowing Power If you have substantial equity in your home and need significant financing, a $500K HELOC offers a great deal of borrowing power. Evaluate these options to find the optimal rate and term for your goals. Pros and Cons of a HELOC PROS CONS You can expect an average interest rate that's lower than other loan types You can expect variable interest rates that change over time, which may make it difficult to manage your payments HELOCs let you access your funds as needed compared to a traditional loan that's paid as a lump sum Lenders use your property as collateral, which means you can lose your home if you default on your loan Interest payments may be tax deductible if you meet IRS guidelines and prove that you will use the funds to buy, improve or build a home HELOCs charge several loan fees that usually equal 2% to 6% of your overall loan amount fees HELOCs can be an excellent option to consolidate your other debt payments into one monthly payment and boost your credit score If the property value drops, you can owe more on your HELOC than your home is worth See More See Less 5-Year Home Equity Loan Rates (60 Months) A 5-year term offers a shorter repayment period with typically higher monthly payments. These products are suitable for borrowers looking for a quicker payoff. 10-Year Home Equity Loan Rates (120 Months) With a 10-year term, borrowers can enjoy a balanced monthly payment while still building equity quickly. 10-year home equity loans are ideal for medium-sized projects or financial needs. 15-Year Home Equity Loan Rates (180 Months) A 15-year term provides lower monthly payments compared to shorter terms, offering more affordability while still progressing toward your financial goals. 20-Year Home Equity Loan Rates (240 Months) Offering longer repayment and lower monthly payments, 20-year home equity loans are suitable for larger investments and long-term financial planning. 30-Year Home Equity Loan Rates (360 Months) The 30-year term maximizes affordability with the lowest monthly payments. These options are best for substantial borrowing needs and long-term investments. Pros and Cons of a Home Equity Loan PROS CONS You'll pay a fixed interest rate that remains consistent during your loan term You put your property at risk of foreclosure since your home secures your loan against defaulted payments If you have a big one-off expense or an investment opportunity, home equity loans distribute funds in lump-sum payments, unlike a credit card or a HELOC Home equity loans have strict requirements that can make them difficult to qualify for Home equity loans are unrestricted, meaning you can use them for almost any expense, including home renovations or auto repairs Home equity loan lenders tend to charge expensive fees that include origination fees, appraisal fees and closing costs Interest paid on your home equity loan might be tax-deductible if you itemize your deductions If your home's value decreases over time, you could end up with a loan balance that's higher than your property's value See More See Less What Is Home Equity? Home equity represents how much you own of your home compared to what the bank or mortgage lender owns. If you've paid off your home in full, you have 100% equity. You can utilize your home's equity without paying off your home in full, whether through a home equity loan or a home equity line of credit (HELOC). You can use your home's equity for home improvements, repairs, debt consolidation and educational costs, among other things. Why Is Home Equity Important? Home equity is important because it signifies how much wealth you have based on how much of your home you own. The more equity you have, the more wealth you've accumulated. If you ever need to utilize your home equity, you can tap into it with a home equity loan or home equity line of credit. You might also want to explore a cash-out refinance as an option to use your home's equity. What Is a HELOC? A home equity line of credit, often referred to as a HELOC, lets homeowners convert the equity in a residential property into cash through a revolving line of credit that's secured by your home. When you get a HELOC, you can take the money available in installments as you need it and pay interest only on what you use.
CBS News
2 days ago
- Business
- CBS News
3 times HELOC rates could fall this summer
HELOC interest rates could be positioned to decline again later this summer. Getty Images For a few months earlier this year, it felt like interest rates on home equity lines of credit (HELOCs) were on a permanent decline. After cooling for much of 2024, rates on the popular home equity borrowing product dropped to an 18-month low in January, a two-year low in February and another one in March. By early April, the average HELOC interest rate was comfortably below 8%, marking a remarkable two-plus percentage point drop in less than six months. And it seemed possible that rates could fall closer to 7% by the summer. But that possibility hasn't come to fruition, and HELOC rates have made a gradual but steady rise since then to 8.27%, where they currently reside. But since rates here are variable and subject to change monthly, both existing borrowers and prospective ones shouldn't worry too much either. Rates here are still much lower than what can be secured with alternatives like personal loans and credit cards. And they'll decline with no effort (or refinancing costs) on behalf of the borrower. That said, when exactly could HELOC rates fall again? Below, we'll examine three calendar dates when HELOC rates could fall again this summer. Start by seeing what HELOC rate you'd currently qualify for here. 3 times HELOC rates could fall this summer While predicting the future of interest rates is inherently impossible to do with precision, if recent history is any indication (and with an understanding of what drives HELOC rates), they could become cooler on one or more of the following dates this summer: July 15, 2025: The June inflation report release Inflation ticked up by a single basis point in May after falling for a few months prior. Now at just 2.4%, the rate is many percentage points lower than its June 2022 high of over 9%. And with the Federal Reserve's target goal of 2%, inflation is closing in on where the bank wants it to be. Should the next inflation reading released by the Bureau of Labor Statistics on this date show another decline or, potentially, the rate even nearing that 2% goal, it could give the Fed the motivation it needs to reduce rates while offering home equity lenders the data support they need to start preemptively lowering rates in anticipation of a formal cut. Compare your current HELOC rate offers here to determine affordability. July 29, 2025: The July Federal Reserve meeting Earlier this year, many economists and experts were all but guaranteeing that the central bank would reduce rates at their mid-summer meeting. And they still might, should economic conditions change in a way that encourages them to take action. If they do, HELOC rates may decline on or around this date. While not nearly as likely as once expected, the Fed can cut rates here. And, even if they don't, comments made post-meeting about any future rate reductions could be strong enough to cool the rate climate anyway, including those on HELOCs. September 17, 2025: The September Federal Reserve meeting Sure, this is the very end of the summer but this is arguably the most realistic date when borrowers could expect HELOC rates to change. On this date, the Federal Reserve will conclude its two-day September meeting and, with it, likely issue its first rate reduction since December 2024. Right now, the CME Group's FedWatch tool has a cut here listed at more than a 90% likelihood. Yes, economic factors could skew this outlook and, yes, HELOC rates may change before or after the meeting, but if you're trying to time your HELOC application or looking for relief in your current HELOC repayment structure, this is the top time to pay attention to this summer. The bottom line Market conditions are constantly evolving but there's reason for homeowners borrowing with a HELOC to be cautiously optimistic this summer. There are multiple dates in which rates could fall, either individually or collectively. That said, home equity loan rates right now are approximately the same as HELOCs and rates there are fixed. So, if you know you want to borrow home equity but don't want to have to continually monitor the market for changes that could impact your monthly repayments, a home equity loan may be the preferable option.
