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Why you should choose a higher HELOC rate over a home equity loan now
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Interest rates on borrowing products have surged in recent years thanks to the pandemic, inflation and multiple hikes to the federal funds rate. But the interest rate climate is evolving again, with recent reports showing a further cooling in the inflation rate (already dramatically lower than June 2022’s 9.1% rate). Inflation hovers just around 3% now and, if it continues to fall, the Federal Reserve could issue its first interest rate cut of 2024.
So borrowers could soon see relief on everything from mortgages to student and personal loans.
Current homeowners in need of extra cash may also consider turning to their existing home equity. With a home equity loan or home equity line of credit (HELOC), owners can gain access to substantial sums of money, often at a much lower interest rate than many popular alternatives. But the interest rates on both products differ, with the average home equity loan rate at 8.60% as of July 10 and HELOCs sitting at 9.17%. And while home equity loans may, on paper, seem like the advantageous option, there’s a compelling argument for choosing the higher HELOC rate now, instead. Below, we’ll break down why.
Start by seeing what HELOC rate you could secure online today.
Why you should choose a higher HELOC rate over a home equity loan now
If you borrowed $50,000 worth of equity with a home equity loan, you’d pay $622.61 each month for 10 years. A HELOC would cost $637.99 monthly, or just over $15 more, during that same period. While that’s not ideal, especially when compounded annually and over the lifespan of the loan, a HELOC could still be worth pursuing now, even with the higher rate. Here’s why:
HELOC rates are variable
HELOC interest rates are variable and set to change, perhaps as often as monthly, depending on your lender and the terms agreed to. This means that rates could adjust upward or downward until you’ve paid back all that you borrowed. While this is a drawback in a climate in which rates are heading upward, it can be a benefit this summer and into 2025, particularly now, when the average homeowner has hundreds of thousands of dollars worth of equity to tap into.
See how much home equity you could use with a HELOC here.
HELOC rates could drop soon
While multiple cuts to the federal funds rate were anticipated this year, thus lowering the rates lenders offer to borrowers, it now appears likely that just one rate cut will be issued in 2024. But that could result in your HELOC dropping, perhaps significantly if the Federal Reserve issues a major cut. So while today’s HELOC rate may be higher than a home equity loan, it could be lower as the rate climate evolves.
Home equity loans will need to be refinanced
An improved rate climate will undoubtedly benefit home equity loans, too. But if you took out a home equity loan in July and rates drop in September or October, you’ll need to refinance your home equity loan – and pay the costs of refinancing – to lock in that new, lower rate. Refinancing costs could add up quickly and may even negate any savings you can obtain with the lower rate. To avoid this scenario, then, a HELOC may be your better choice this July.
The bottom line
Borrowers looking for inexpensive ways to access money will need to evolve with the rate climate. For homeowners, this may involve substituting a home equity loan with a HELOC instead. Thanks to their variable rate, the likelihood of rate cuts to come and the added expense of having to refinance a home equity loan to secure the rate a HELOC would adjust to independently, now is a rare time when a higher rate HELOC may be better than a home equity loan. Just be sure to carefully crunch the numbers and consider the pros and cons of both products before acting, as you could jeopardize your homeownership if you fail to pay back all that you have borrowed.
Some residents east of Atlanta were evacuated while others were told to shelter in place to avoid contact with a chemical plume after a fire at a chemical plant.
Rockdale County Fire Chief Marian McDaniel told reporters that a sprinkler head malfunctioned around 5 a.m. Sunday at the BioLab plant in Conyers. That caused water to mix with a water-reactive chemical, which produced a plume of chemicals. The chief said she wasn’t sure what chemicals were included.
A small roof fire was initially contained, but reignited Sunday afternoon, Sheriff Eric Levett said in a video posted on Facebook as gray smoke billowed into the sky behind him. He said authorities were trying to get the fire under control and urged people to stay away from the area.
People in the northern part of Rockdale County were ordered to evacuate and others were told to shelter in place with windows and doors closed. Sheriff’s office spokesperson Christine Nesbitt did not know the number of people evacuated.
The federal Environmental Protection Agency and the Georgia Environmental Protection Division were both on site, county Emergency Management Director Sharon Webb said. The agencies are monitoring the air “to give us more of an idea of what the plume consists of.”
McDaniel said crews were working on removing the chemical from the building, away from the water source. Once the product is contained, the situation will be assessed and officials will let residents know whether it is safe to return to their homes, she said.
An evacuation center was opened at Wolverine Gym in Covington.
Washington — Sen. JD Vance and Minnesota Gov. Tim Walz will face off on Tuesday in the first and only vice presidential debate of the cycle, as the two candidates look to prop up the Republican and Democratic tickets with fewer than 40 days until Election Day.
The debate, hosted by CBS News at the CBS Broadcast Center in New York City, will be moderated by “CBS Evening News” anchor and managing editor Norah O’Donnell and “Face the Nation” moderator and CBS News chief foreign affairs correspondent Margaret Brennan.
Here’s what to know about how the candidates are preparing for the debate:
How JD Vance is preparing for the VP debate
The Ohio Republican has been preparing for the debate for more than a month, a source directly involved told CBS News, including with “murder board” sessions with a small team that includes Vance’s wife and his advisers, along with senior Trump adviser Jason Miller.
Among Vance’s main focuses during the preparation has been studying Walz’ debate style and policy record, the source said, noting that Vance will attempt to highlight what he sees as the Minnesota governor’s left-wing views during the debate.
Vance told reporters last week that his plan is to break down what the Trump-Vance administration would do to make “life better” and connect that to policy.
“So, we’re studying up as much as we can on the issues that matter to the American people, and I’m looking forward to it,” Vance said.
House Majority Whip Tom Emmer, a Minnesota Republican, is standing in for Walz during Vance’s debate prep, four sources familiar with the preparations told CBS News. Emmer and Walz have deep roots in Minnesota and are close in age.
Emmer told ABC’s “This Week” on Sunday that he’s known Walz for decades and has spent the last month working to “get his phrases down, his mannerisms.”
“My job was to be able to play Tim Walz so JD Vance knows what he’s going to see,” Emmer said.
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How Tim Walz is preparing for the VP debate
Walz has been preparing for the debate with a close team of advisers, a source familiar with the preparations told CBS News. Some of the people involved also helped Vice President Kamala Harris take on former President Donald Trump, among others, like a long-time aid to Walz who worked with him during his bids for governor.
For Walz, whose name recognition was until recently limited outside of Minnesota, the focus is on continuing to introduce himself to the American people, according to the source. He’ll also work to highlight Harris’ vision for the nation’s path forward.
“You’ll hear me talk like I have about things that impact Americans, making sure they have the opportunity to thrive, making sure that we’re being factual in how we talk about that,” Walz told MSNBC’s Rachel Maddow of the debate earlier this month. “And so I’m looking forward to it. I’ll work hard, that’s what I do.”
During debate prep, Transportation Secretary Pete Buttigieg is standing in for Vance, a campaign official familiar with the preparation told CBS News. The former mayor of South Bend, Indiana, also assisted Harris during her debate prep in 2020, and is close in age to Vance.
When and how to watch the presidential debate
Debate coverage on CBS News 24/7 begins at 4 p.m. ET, with the debate getting underway at 9 p.m. ET on Oct. 1.
The 90-minute debate will be streamed on CBS News 24/7 and Paramount+ across all available platforms and CBSNews.com. The debate will also be simulcast across other broadcast and cable networks.
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Actor John Ashton, best known for his role as the by-the-book detective in the “Beverly Hills Cop” franchise, has died, his publicist Alan Somers confirmed to CBS News on Sunday. He was 79.
Ashton died Thursday in Ft. Collins, Colorado, after a battle with cancer.
“John was a loving husband, brother, father, and grandfather who will be deeply missed by all who knew him,” a statement said.
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Ashton was born in Springfield, Massachusetts on Feb. 22, 1948, and raised in Enfield, Connecticut. He received a Bachelor of Arts from the University of Southern California.
Throughout his 50-year career in show business, Ashton appeared in nearly 100 movies after making his debut in 1973’s “The Psychopath.”
He was probably best known for his role as Det. Sgt. John Taggart in the first two installments of the “Beverly Hills Cop” series alongside Eddie Murphy and Judge Reinhold. He reprised his role in 2024’s “Beverly Hills Cop: Axel F.”
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Other film credits include “Some Kind of Wonderful,” “She’s Having a Baby,” “Midnight Run,” “Little Big League” and “Gone Baby Gone.”
On television, he played Willie Joe Garr on several episodes of “Dallas” and made an appearance on such shows like “Columbo,” “Police Squad!” “Hardball” and others.
“John devoted his career to honing his craft and bringing characters to life on the screen. His presence will be greatly missed,” Somers said.
Ashton is survived by his wife Robin Hoye, three children, three step-children and a grandson. He also leaves behind two sisters and a brother.
“John leaves behind a legacy of love, dedication, and service. His memory will forever be treasured by his wife, children, grandchildren, as well as his brother, sisters, his extended family and all who loved him,” Somers said. “John’s impact on the world will be remembered and celebrated for generations to come.”
The family requests any donations in Ashton’s memory be made to Pathways Hospice Care
Residents in Georgia ordered to evacuate or shelter in place after fire at chemical plant
Israeli airstrikes kill dozens across Lebanon as Hezbollah confirms a 7th top commander was killed
Residents told to evacuate or take shelter after Georgia chemical plant fire