There have been a series of encouraging economic news items in recent weeks. Inflation fell again in September after hitting a 3-year low in August. Unemployment also ticked down in the month as employers added more jobs than anticipated. And the federal funds rate was cut in the month, too, marking the first such reduction in more than four years.
But these positive developments haven’t negated much of the economic pain Americans have felt in recent years when inflation soared to its highest level in decades and interest rates followed the same path. Understandably, then, many Americans may still find themselves looking for ways to make ends meet. And, right now, a home equity loan can provide that solution.
With the average homeowner currently in possession of more than $300,000 worth of equity, a small loan for $15,000 would allow them to maintain most of their equity for future use while still allowing them to cover a series of small expenses now. Before getting started, however, borrowers should calculate their potential monthly costs so they know exactly what to expect and how to budget for these costs. But how much does a $15,000 home equity loan cost per month now that rates have been cut? That’s what we’ll calculate below.
See what home equity loan interest rate you’re eligible for here.
How much does a $15,000 home equity loan cost monthly now that rates were cut?
The average home equity loan interest rate as of October 15 is 8.37%, but it’s a little higher for two common repayment periods. Here’s what qualified borrowers could expect to pay monthly, then, tied to those two specific periods:
- 10-year home equity loan at 8.46%: $185.66 per month
- 15-year home equity loan at 8.37%: $146.57 per month
As can be seen, a home equity loan for $15,000 comes with monthly payments under $190 right now and under $150 if you lock in a longer term. And those payments (and the rates they’re tied to) could become even cheaper in November if the Fed proceeds with an expected 25 basis point rate cut.
While home equity loan rates may not fall in tandem, it helps to know what those payments could potentially look like if they do. Here’s what they’d be:
- 10-year home equity loan at 8.21%: $183.66 per month
- 15-year home equity loan at 8.12%: $144.39 per month
So while payments will likely fall on a $15,000 home equity loan later this year, the drop isn’t likely to be so dramatic that it’s worth delaying action. Instead, tackle your expenses now and apply for home equity loan when you need it most (since you could always refinance in the future).
Get started with a home equity loan online now.
The bottom line
Home equity loans come with lower interest rates than most alternatives now, hence the reason why so many borrowers have turned to this unique credit option this year. For a $15,000 loan, you’ll pay between $147 and $186 per month if opened at today’s rates. That noted, home equity borrowing isn’t risk-free. Your home functions as collateral in this borrowing exchange, so you should be confident that you can repay all that you’ve borrowed. Otherwise, it may be worth exploring alternatives, even if that means pursuing a product with a higher rate.
Have more questions? Learn more about the best home equity loans available here today.
Matt Richardson is the managing editor for the Managing Your Money section for CBSNews.com. He writes and edits content about personal finance ranging from savings to investing to insurance.