If you’re considering a home equity loan, this could be an ideal time to explore your options. After all, homeowners have seen significant growth in their home equity over the past year and the average homeowner has about $327,000 in equity currently. Plus, with the Federal Reserve cutting its benchmark rate by 50 basis points recently, borrowing against that equity has become more affordable. So, for many, taking out a home equity loan now could be a cost-effective way to fund renovations, pay off high-interest debt or manage other large expenses.

Because home equity loans are secured by the value of your home, lenders are typically able to offer lower rates compared to other loan types — and the rates on home equity loans are fixed, providing you with predictable monthly payments, too. And when you factor in the recent rate reduction, you may be able to lock in an even better deal on this type of loan than normal, as home equity loan rates have dropped in recent weeks. 

However, it’s important to carefully evaluate the monthly payment obligations tied to any home equity loan you take out, particularly now that rates have been adjusted. So, how much would a $75,000 home equity loan cost per month in the current environment? 

Ready to tap into your equity? See what home equity loan rate you could qualify for here.

How much would a $75,000 home equity loan cost per month after rate cuts?

The monthly cost of a $75,000 home equity loan depends primarily on two factors: the interest rate you qualify for and the length of the repayment period. The rates you’re offered can vary depending on your credit score, debt-to-income (DTI) ratio and other factors, but there are two common repayment terms for home equity loans: 10 years and 15 years. 

The average 10-year fixed home equity loan rate stands at 8.50% currently, while the average rate for a 15-year loan is slightly lower at 8.41%. Based on the current average rates and terms, here’s what you might expect to pay each month on a $75,000 home equity loan:

• 10-year fixed home equity loan at 8.50%: $929.89 per month
• 15-year fixed home equity loan at 8.41%: $734.60 per month

These figures illustrate the trade-off between shorter and longer repayment terms. While the 10-year loan offers a higher monthly payment, it allows you to pay off the debt more quickly and potentially save on total interest over the life of the loan. Conversely, the 15-year option provides lower monthly payments, which may be more manageable for some borrowers, but results in paying more interest over time.

Find out what home equity loan rates are available to you here.

The impact of future Fed rate cuts

While today’s home equity loan rates are attractive overall, there may be potential for even greater savings soon. Analysts expect that if inflation continues to remain low or decrease, the Federal Reserve could implement additional rate cuts later this year — one in November and one in December. If these rate cuts occur, we could see home equity loan rates fall even further, leading to even more affordable borrowing costs.

For example, if a 25-basis-point rate cut occurs in November and home equity loan rates were to decrease by the same amount, bringing the rate for a 10-year loan down to 8.25%, the monthly payment on a $75,000 loan would decrease to $919.89, saving you about $10 per month compared to what you would pay at today’s rates. 

Similarly, if a 15-year loan rate dropped by 25 basis points to 8.16%, your monthly payment would fall to $723.68. That would result in monthly savings of $10.92 and total savings of about $1,980 in interest over the loan term. 

Now let’s say that home equity rates were to fall by 50 basis points in total, dropping the average 10-year home equity loan rate to 8.00% and the average 15-year home equity loan rate to 7.91%. That would lower the monthly payment on a 10-year home equity loan to $909.96, while the monthly payment on a 15-year home equity loan would fall to $712.85.

While the potential savings are worth considering, waiting for additional rate cuts could be risky, as predicting future rate movements is not an exact science — and any number of factors outside of Fed rate cuts can have an impact on where rates head. Given the risks, it could make more sense to secure a loan at today’s favorable rates rather than gamble on further reductions.

The bottom line

The recent interest rate cuts have made home equity loans more attractive than they’ve been in recent years, with a $75,000 loan potentially costing between about $735 and $930 per month, depending on the repayment term and current interest rates. However, it’s crucial to remember that home equity loan rates can vary significantly from one lender to another, so if you’re considering tapping into your home equity, it’s typically smart to shop around, compare offers from multiple lenders and be prepared to act quickly when you find a rate that aligns with your financial goals and budget constraints. 

Two men are in the custody of the Drug Enforcement Agency after Coast Guard officials seized nearly 400 pounds of cocaine from a boat in Puerto Rico. 

The crew of a Coast Guard aircraft spotted a suspicious vessel in international waters on Sept. 28. The vessel was steering towards Rincón, a beach town on Puerto Rico’s western coast, the agency said in a news release on Wednesday. The Joseph Tezanos, a 154-foot fast response cutter craft ported in San Juan, Puerto Rico, was diverted to intercept the vessel.

The Joseph Tezanos stopped and searched the vessel, officials said, and Coast Guard crew members found 142 “brick-sized packages of suspected contraband” inside the boat.

Those packages tested positive for cocaine, the Coast Guard said, with an estimated value of $4.3 million.

The two men who were aboard the ship were arrested and transferred to the custody of the DEA. Both men are United States citizens, and face federal charges including possession to with intent to distribute a controlled substance aboard a vessel subject to the jurisdiction of the United States, the Coast Guard said. The charges carry a minimum sentence of 10 years in prison and a maximum sentence of life in prison. 

“I congratulate the United States Coast Guard personnel for this successful interdiction of an international drug smuggling venture,” said United States Attorney W. Stephen Muldrow in the news release. “We greatly appreciate the U.S. Coast Guard’s unwavering support and dedication to keeping Puerto Rico and our nation safe.”

The seizure was made as part of the Caribbean Corridor Strike Force, which brings together task forces from multiple agencies to stop the flow of illicit substances in the region. The DEA, FBI, Coast Guard, Homeland Security, and ICE are all represented in the task force. 

It’s one of several large caches of cocaine seized by officials in recent months. Federal officials seized $33 million worth of cocaine left on a beach in Puerto Rico in early September. The 3,600 pounds of drugs were left on a beach on the popular tourist island of Vieques in the pre-dawn hours and the people who smuggled the drugs fled the area, officials said. 

In August, two men from the Dominican Republic were arrested after they were found aboard a boat carrying more than 660 pounds of cocaine near Puerto Rico. In July, federal agents arrested two U.S. citizens and seized $4.6 million worth of cocaine west of the island. 

Puerto Rico is considered a transit point for drugs being smuggled to the U.S. mainland and other countries.