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How much would a $75,000 home equity loan cost per month after rate cuts?
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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.
The International Brotherhood of Teamsters says workers at seven Amazon facilities will begin a strike Thursday morning in an effort by the union to pressure the e-commerce giant for a labor agreement during a key shopping period.
The Teamsters say the workers, who authorized walkouts in the past few days, are joining the picket line after Amazon ignored a Dec. 15 deadline the union set for contract negotiations. Amazon says it doesn’t expect any impact on its operations during what the union calls the largest strike against the company in U.S. history.
The Teamsters say they represent nearly 10,000 workers at 10 Amazon facilities, a small portion of the 1.5 million people Amazon employs in its warehouses and corporate offices.
Amazon is ranked No. 2 on the Fortune 500 list of the nation’s largest companies.
At a warehouse in the New York City borough of Staten Island, thousands of workers who voted for the Amazon Labor Union in 2022 and have since affiliated with the Teamsters. At the other facilities, employees – including many delivery drivers – have unionized with them by demonstrating majority support but without holding government-administered elections.
The strikes happening Thursday are taking place at an Amazon warehouse in San Francisco and six delivery stations in southern California, New York City, Atlanta and the Chicago suburb of Skokie, Illinois, according to the union’s announcement. Amazon workers at the other facilities are “prepared to join” them, the union said.
“Amazon is pushing its workers closer to the picket line by failing to show them the respect they have earned,” Teamsters General President Sean M. O’Brien said in a statement.
“If your package is delayed during the holidays, you can blame Amazon’s insatiable greed. We gave Amazon a clear deadline to come to the table and do right by our members. They ignored it,” he said.
The Seattle-based online retailer has been seeking to re-do the election that led to the union victory at the warehouse on Staten Island, which the Teamsters now represent. In the process, the company has filed a lawsuit challenging the constitutionality of the National Labor Relations Board.
Meanwhile, Amazon says the delivery drivers, which the Teamsters have organized for more than a year, aren’t its employees. Under its business model, the drivers work for third-party businesses, called Delivery Service Partners, who drop off millions of packages to customers everyday.
“For more than a year now, the Teamsters have continued to intentionally mislead the public – claiming that they represent ‘thousands of Amazon employees and drivers’. They don’t, and this is another attempt to push a false narrative,” Amazon spokesperson Kelly Nantel said in a statement. “The truth is that the Teamsters have actively threatened, intimidated, and attempted to coerce Amazon employees and third-party drivers to join them, which is illegal and is the subject of multiple pending unfair labor practice charges against the union.“
The Teamsters have argued Amazon essentially controls everything the drivers do and should be classified as an employer.
Some U.S. labor regulators have sided with the union in filings made before the NLRB. In September, Amazon boosted pay for the drivers amid the growing pressure.
NEW YORK — The Teamsters union is launching a strike against Amazon at numerous locations across the country, including in Maspeth, Queens.
The Teamsters are calling it the largest strike against Amazon in United States history, and it’s set to begin at 6 a.m. Thursday. In addition to New York City, workers will be joining picket lines in Atlanta, Southern California, San Francisco and Illinois.
In a video announcement released Wednesday night, workers voiced their frustrations.
“Us being strike ready means we’re fed up, and Amazon is clearly ignoring us and we want to be heard,” one worker says in the video.
“It’s really exciting. We’re taking steps for ourselves to win better conditions, better benefits, better wages,” another worker in the video says.
The union says it represents about 10,000 Amazon employees and that Amazon ignored a deadline to come to the table and negotiate. The $2 trillion company doesn’t pay employees enough to make ends meet, the union asserts.
At the height of the holiday season, many are wondering what this means for packages currently in transit.
Teamsters President Sean O’Brien said, “If your package is delayed during the holidays, you can blame Amazon’s insatiable greed.”
Amazon says Teamsters are misleading the public
An Amazon spokesperson says the Teamsters are misleading the public and do not represent any Amazon employees, despite any claims.
“The truth is that the Teamsters have actively threatened, intimidated, and attempted to coerce Amazon employees and third-party drivers to join them, which is illegal and is the subject of multiple pending unfair labor practice charges against the union,” the spokesperson said in a statement.
An Amazon representative says the company doesn’t expect operations to be impacted.
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