Home equity calculator | Home equity loan rates
 
Quick links: Bank ratings | Graph rates | 100 High Yield CDs

Home Equity Basics
Print E-mail
home equity
Pros and cons of equity debt
By Bankrate.com

Taking out a home equity loan: Pros
  • In most cases, borrowers can deduct the interest on loans up to $100,000 on their taxes.
  • The loans carry lower interest rates than credit cards and unsecured personal loans.
  • They can be used for lots of things: debt consolidation, home improvements, tuition, medical costs, emergencies and big-ticket items.

 

Taking out a home equity loan: Cons
  • If you default, you could lose your home, your biggest asset.
  • Such loans can be a risky spending tool for younger homeowners who are not established in their careers and have less experience owning a home and managing money.
  • The loans can be risky for older homeowners who would be tapping their nest egg close to retirement.
  • Credit lines have variable interest rates, so monthly payments can rise, even if your income doesn't.
  • If your home's value drops, you can end up owing more than the house is worth -- a bad situation if you need to sell the house.
  • Using an equity loan to pay off debt might make monthly payments cheaper but could cost you more in the long haul, because you're taking much more time to pay off the debt.
  • You might not be able to lease your home during the term of your loan.

 

advertisement

Posted: April 1, 2005
Mortgage Rates
High Yield CD and MMA Rates
Other Rates
Start Here
Type of Loan:
Home Description:
Credit Profile:
Property Location:
* Please select a "Property Location"
Get up to Four Loan Offers in Minutes!
Compare low rates from the nation's top lenders and local brokers
  • Fill out our simple, secure form
  • Receive up to 4 loan offers
  • Choose the program that best fits your needs
Compare Home Equity Rates



About our rates
advertisement
About this index
Home Equity Averages
Product Rate +/- Last week
30K HELOC
5.27%
5.26%
30K Home Equity Loan
8.23%
8.24%
50K HELOC
4.99%
4.98%
75K Home Equity Loan
7.94%
8.01%
View rates in your area:
ByDon Taylor, Ph.D., CFA, CFP
Ask Dr. Don»
home equity
Don't tap emergency cash
Credit card debt may trump a home equity loan for a couple planning a home improvement project. 
View more Bankrate Advisers »
advertisement
Home Equity Quick Links
advertisement

Rates can change at a moment's notice.

Let us keep an eye on them with customized alerts.

Sign up now! It's simple. »
Subscribe:RSS Feeds