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Is a HELOC still a good idea amid growing inflation?
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Inflation ticked up again in February with prices that were 0.4% higher than those in January. And, a similar trend occurred in January when inflation unexpectedly increased month-over-month. That’s important data to consider if you’re thinking about taking out a home equity line of credit (HELOC) (or borrowing money for another purpose).
Right now, the Federal Reserve’s benchmark rate is paused at a 23-year high. And while there have been widespread expectations that the Fed would start cutting rates in mid-2024, if inflation continues to tick up in the future, it could threaten to delay those cuts.
And, since the federal funds rate forms the foundation for consumer interest rates, that could be bad news for borrowers. So does it still make sense to take out a HELOC amid growing inflation?
Compare your top HELOC options online now.
Is a HELOC still a good idea amid growing inflation?
Despite the issues with stubborn inflation, it may still be a good idea to tap into your home equity with a HELOC right now. Here’s why:
Rates are still lower than other popular options
Because HELOCs use your home equity as collateral, they tend to come with competitive interest rates, as there’s less risk to the lender. That’s especially true when compared to other borrowing options.
For example, the average credit card rate is currently 21.47% — and the average rate on personal loans is currently 12.10%. But today’s average HELOC interest rate is just 8.98%, so in many cases, it’s cheaper to borrow money with a HELOC than another type of lending product.
Take advantage of competitive HELOC interest rates now.
Rate cuts may still come this year
The Federal Reserve began increasing rates in response to COVID-era inflation — during which the annual inflation rate climbed above 9%. So while the inflation rate ticked up in February, growing 3.2% year-over-year, there has still been a significant improvement in the inflation rate compared to the highs experienced in mid-2022.
And, while economists have revised their forecasts to push back rate cut expectations, they still expect the Fed to start cutting rates later this year. That’s good news for those who open a HELOC now, as the variable nature of HELOC rates means that borrowers could benefit from future rate cuts.
HELOCs offer unique tax benefits that others don’t
Competitive interest rates aren’t the only benefit HELOCs offer; they may also come with tax benefits. For example, if you use the proceeds from your HELOC for home repairs or renovations, you may be able to deduct the interest you pay on the loan.
However, to qualify for this tax deduction, you’ll have to use the loan to repair or renovate the home you’re borrowing against. If you use the proceeds from a home equity loan to repair or renovate a different property, your interest may not be tax deductible.
“Interest on home equity loans and lines of credit are deductible only if the borrowed funds are used to buy, build, or substantially improve the taxpayer’s home that secures the loan,” the IRS states online. “The loan must be secured by the taxpayer’s main home or second home (qualified residence), and meet other requirements.”
Don’t miss out on the benefits of a HELOC. Compare your options now.
The bottom line
A HELOC may be a wise choice right now, even amid growing inflation. After all, HELOC interest rates are still competitive when compared to rates on other lending options — and rate cuts may still be on the table for later this year. Plus, these loans come with potential tax benefits that could allow you to write off some of the interest on your taxes. Compare your HELOC options now to find out how affordable these loans can be.
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CBS News
Kamala Harris will speak with “60 Minutes” tomorrow. Here’s what to know for the interview.
Voters will get the chance to hear from Vice President Kamala Harris on Monday as she presents her case for why she should be president in a “60 Minutes” election special.
For decades, “60 Minutes” has featured both Republican and Democratic nominees for presidents, but this year, former President Donald Trump backed out after previously indicating he would be on the show. Correspondent Scott Pelley, who’d been set to interview Trump, will instead travel to Arizona’s Maricopa County, home to more than 60% of Arizona’s voters and a critical battleground in a key swing state.
One thing is certain about the election; with the U.S. deeply involved in both the wars in Ukraine and the Middle East, whoever wins on Nov. 5 will become a wartime president.
What Harris will discuss
Israel’s war started one year ago after Hamas launched a surprise terror attack and correspondent Bill Whitaker will discuss the ongoing war with Harris.
Harris will also discuss the economy, immigration, her record as vice president and the differences between herself and Trump.
Democratic vice presidential candidate Gov. Tim Walz will also appear.
Whitaker joined the Democratic ticket on the campaign trail this week to gain insight into their platform’s priorities and values, and what the candidates believe voters should know.
Why Trump pulled out of the “60 Minutes” interview
Leading up to the candidate hour, Trump, through campaign spokespeople, was the first candidate to accept the “60 Minutes” request to be interviewed for the special, according to CBS News. It had been agreed that both candidates would receive equal time during the broadcast.
Trump last sat down with 60 Minutes in 2020. He walked out during the interview with Lesley Stahl. Trump referenced the incident on Tuesday night at a Milwaukee press conference when asked about his decision not to participate in the Oct. 7 “60 Minutes” election special.
“Well, right now, I went to – they came to me and would like me to do an interview, but first I want to get an apology, because the last time I did an interview with them, if you remember, they challenged me on the computer,” Trump said. “They said the ‘laptop from hell’ was from Russia, and I said it wasn’t from Russia. It was from Hunter, and I never got an apology, so I’m sort of waiting. I’d love to do ’60 Minutes.’ I do everything.”
The Republican nominee for president emphasized that he felt he was owed an apology from “60 Minutes.”
“Let’s see if they do it. I wouldn’t mind doing 60,” Trump continued. “I’ve done ’60 Minutes’ a lot.”
In a statement on Tuesday, Trump campaign communications director Steven Cheung said that Trump’s team had not agreed to an interview.
“Fake News,” Cheung said in a post on X. “60 Minutes begged for an interview, even after they were caught lying about Hunter Biden’s laptop back in 2020. There were initial discussions, but nothing was ever scheduled or locked in. They also insisted on doing live fact checking, which is unprecedented.”
Previous Trump, Harris appearances on 60 Minutes
Trump previously sat down with “60 Minutes'” Mike Wallace in 1985, Pelley in 2015 and Lesley Stahl twice in 2016, first in July of that year and then again in November of 2016. He also spoke with Stahl again in 2018 and 2020.
Harris previously sat down with Whitaker last year. She also was interviewed by Norah O’Donnell, “CBS Evening News” anchor and “60 Minutes” contributing correspondent, in 2020.
