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How much would a $150,000 HELOC cost per month?
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With the Fed rate remaining locked at a 23-year high, home equity borrowing has been an attractive option for homeowners recently. When you borrow against your home’s equity, your home is used as collateral, which can result in more favorable interest rates compared to unsecured borrowing options. So, for many homeowners, home equity borrowing is one of the best and most affordable ways to access large sums of money — especially now that the average amount of home equity is closing in on $300,000.
Borrowing against your home equity could become even cheaper soon, too. Inflation has been cooling over the last four months, so the Federal Reserve is expected to make cuts to its benchmark rate as soon as September. When that happens, it is likely to cause interest rates across various lending products to decrease, including home equity loans and home equity lines of credit (HELOCs). That would be good news for homeowners who want to borrow money at the lowest rate possible.
But before you tap into your home’s equity, it’s important to understand the financial implications of doing so. For example, if you’re going to borrow $150,000 from your home’s equity with a HELOC, you need to know the monthly costs associated with it. Here’s what you can expect to pay for a HELOC in that amount based on current market conditions.
Find out what today’s best home equity borrowing rates are here.
How much would a $150,000 HELOC cost per month?
Right now, the average HELOC interest rate is 9.37%, which is significantly lower than the average credit card rate (which is closing in on 23%) and the average personal loan rate (which hovers near 12% currently). So for homeowners with $150,000 in available equity, a HELOC offers one of the most cost-effective borrowing solutions right now.
To illustrate, here’s a breakdown of the costs for both 10-year and 15-year HELOC repayment periods:
- 10-year HELOC at 9.37%: $1,930.30 monthly, totaling $81,636.35 in total interest paid
- 15-year HELOC at 9.37%: $1,554.59 monthly, totaling $129,826.54 in total interest paid
While a $150,000 HELOC would cost between $1,554.59 and $1,930.30 monthly if fully drawn now, it’s crucial to remember that HELOC rates are variable. They typically adjust monthly, so your costs may change over time.
The Federal Reserve is also expected to start cutting interest rates starting next month, with the first interest rate cuts anticipated to be 25 basis points. If HELOC rates decrease by 25 basis points to 9.12%, here’s how the monthly payments would look:
- 10-year HELOC at 9.12%: $1,909.89 monthly, totaling $79,187.02 in interest paid.
- 15-year HELOC at 9.12%: $1,532.13 monthly, totaling $125,782.74 in interest paid.
Keep in mind that these calculations assume you borrow the full $150,000 immediately and make consistent payments. In reality, HELOCs offer more flexibility than that. You can borrow only what you need, when you need it, potentially reducing your overall interest costs.
If interest rates continue to decline, which seems increasingly likely, both your monthly payments and the total interest paid on this HELOC could decrease further.
Learn more about the lowest HELOC rates you could qualify for here.
Are home equity loans the more affordable alternative?
With a current average rate of 8.52%, a $150,000 home equity loan with a term of 15 years would result in monthly payments of approximately $1,478.87. This amounts to a total interest payment of $116,196.31 over the life of the loan, making it slightly more affordable than a 15-year HELOC at today’s rates.
That said, affordability isn’t the only factor to consider. It’s important to also weigh the trade-offs between home equity loans and HELOCs, which include:
- Rate structure: The key difference between HELOCs and home equity loans is that home equity loans come with fixed interest rates. HELOC rates are variable and may decrease if market conditions change. This means HELOC borrowers could potentially benefit from future rate reductions without refinancing.
- Flexibility: HELOCs allow borrowers to draw funds as needed, potentially reducing overall interest costs. Home equity loans, in contrast, provide a lump sum upfront.
- Refinancing costs: If rates drop significantly, home equity loan borrowers would need to refinance to take advantage of lower rates. This process incurs closing costs, which can be substantial and may offset the benefits of a lower rate.
- Long-term considerations: While the fixed rate of a home equity loan provides certainty, it may become less competitive if market rates decline sharply. HELOC borrowers would automatically benefit from such declines.
The bottom line
In today’s economic landscape, both HELOCs and home equity loans can be affordable ways to borrow $150,000. Ultimately, though, the best choice between a HELOC and a home equity loan depends on your circumstances. If you prioritize payment stability and are comfortable with the current 8.52% rate, you might prefer a home equity loan. If you want to capitalize on future rate decreases and value flexibility, you might find a HELOC more suitable, despite the higher initial rate.
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Paul Whelan, freed in prisoner swap with Russia, tells other American detainees: “We’re coming for you”
Washington — Nearly seven weeks after the Russians handed over Paul Whelan on a tarmac in Ankara, Turkey, the Marine veteran stood on the steps of the U.S. Capitol with a message for other Americans who are held abroad.
“We’re coming for you,” he told reporters Tuesday night after he met with lawmakers. “It might take time, but we’re coming.”
Whelan said he spoke with lawmakers about how the government can better support detainees after they’re released.
“We spoke about how the next person’s experience could be better,” he said. “What the government could do for the next person that’s held hostage and comes home — the care and support that other people might need, especially people that are in a worse situation. There are people coming back that lived in the dirt without shoes for three years, people that were locked up in hideous conditions for 20 years. They need support.”
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The U.S. secured Whelan’s release in August in one of the largest prisoner swaps since the end of the Cold War. The complex deal came after months of sensitive negotiations between the U.S., Russia, Germany, Slovenia, Poland and Norway.
As part of the deal, Russia released 16 prisoners while the Western countries released eight Russians. Whelan was released alongside Wall Street Journal reporter Evan Gershkovich, Russian-American radio journalist Alsu Kurmasheva and Vladimir Kara-Murza, a U.S. green card holder and Kremlin critic.
Whelan, who had been the longest-held American detainee in Russia, was arrested in December 2018 when he traveled to the country to attend a friend’s wedding. He was convicted of espionage in a secret trial and sentenced to 16 years in prison in 2020.
Whelan, his family and the U.S. government vehemently denied that he was a spy and accused Russia of using him as a political pawn. The U.S. government considered him to be wrongfully detained, a rare designation that put more government resources toward securing his release.
But a deal to secure his freedom was long elusive. He remained behind bars as Russia freed Marine veteran Trevor Reed and women’s basketball star Brittney Griner — both of whom were detained after Whelan’s arrest — in prisoner swaps with the U.S.
The U.S. said it pushed for his inclusion in both exchanges, but Russia refused. It led to Whelan advocating for his own release from a remote prison camp, calling government officials and journalists to make sure that he wasn’t forgotten.
When the plane carrying Whelan, Gershkovish and Kurmasheva landed in Maryland on Aug. 1, Whelan was the first to disembark. He was greeted by President Biden, who gave Whelan his American flag pin, and Vice President Kamala Harris.
“Whether he likes it or not, he changed the world,” Rep. Haley Stevens, a Michigan Democrat, told reporters Tuesday.
Whelan’s case and his family’s constant pressure on the U.S. government brought more attention to the cases of Americans who are wrongfully detained by foreign governments.
Haley said Whelan is a reminder to other Americans considering traveling to Russia that “you have a target on your back.”
Whelan said it’s been an adjustment acclimating to life back in the U.S., especially learning the latest technology like his iPhone 15.
“I was in a really remote part of Russia,” he said. “We really didn’t have much. The conditions were poor. The Russians said the poor conditions were part of the punishment. And coming back to see this sort of thing now is a bit of a shock, but it’s a good shock.”