CBS News
How much does a $25,000 HELOC cost monthly now that rates were cut?
Getty Images/iStockphoto
Home equity borrowing has been one of the cheapest ways to borrow large sums of money in recent years. Whether with a home equity loan or home equity line of credit (HELOC), borrowers were able to secure interest rates significantly lower than those offered with credit cards and personal loans. And, now, with one interest rate cut issued in September and additional ones looming for when the Federal Reserve meets again in November and December, home equity borrowing is poised to become even cheaper soon.
This is especially true for those who pursue a HELOC. These come with variable interest rates subject to change each month. That may have been a disadvantage when interest rates were climbing but it’s a major benefit now with interest rates on the decline. With the average homeowner having approximately $330,000 worth of equity to utilize now, a $25,000 HELOC can help borrowers cover some major expenses while still maintaining a large amount of equity to potentially use in the future. Before getting started, however, borrowers should calculate their potential monthly payments. So, what will a $25,000 HELOC cost monthly now that rates have been cut?
See how low of a HELOC interest rate you could qualify for here.
How much does a $25,000 HELOC cost monthly now that rates were cut?
When calculating your potential HELOC monthly payments it’s critical to remember that rates on this product are variable. In other words: the payment you calculate today is unlikely to be the same one in a few months or over the full repayment period of 10 or 15 years. That noted, here’s what qualified borrowers can expect to pay monthly for a $25,000 HELOC at today’s interest rate:
- 10-year HELOC at 8.73%: $313.05 per month
- 15-year HELOC at 8.73%: $249.57 per month
While HELOC rates are unlikely to fall (or increase) in direct proportion to the federal funds rate, it helps to know what they could look like if they drop by 25 basis points from today’s average:
- 10-year HELOC at 8.48%: $309.70 per month
- 15-year HELOC at 8.48%: $245.89 per month
And here’s what they’d be if they fall by half a percentage point from today’s 8.73%:
- 10-year HELOC at 8.23%: $306.37 per month
- 15-year HELOC at 8.23%: $242.24 per month
As demonstrated, a $25,000 HELOC comes with affordable monthly payments now and those payments are likely to become even cheaper in the months ahead. And, unlike home equity loans, borrowers won’t need to refinance to secure a lower rate as the HELOC will simply adjust each month on its own.
Get started with a HELOC here.
What about home equity loans?
If you’re looking for the lowest rate on a home equity product, home equity loans are the better choice. They come with an average of 8.36% now, more than 25 basis points lower than HELOCs. But, unlike HELOCs, that rate will be fixed and borrowers won’t be able to exploit any future rate drops without refinancing to secure that lower rate. And that refinance will come at a cost (typically 1% to 5% of the total loan amount). So weigh the lower home equity loan rate currently available versus what can soon be accessible with a HELOC to better determine which one works best for you now.
The bottom line
A $25,000 HELOC comes with monthly payments between $250 and $313, approximately, right now. And those payments are likely to drop in the months to come as the larger rate climate cools. But don’t let those lower payments tempt you to overborrow, either. Your home serves as collateral in these borrowing circumstances so it’s critical to withdraw only an amount that you can comfortably afford to pay back or you’ll risk your homeownership in the process.
CBS News
China school knife attack kills at least 8, wounds 17, days after fatal car attack killed dozens
Eight people were killed and 17 others wounded Saturday in a knife attack at a vocational school in eastern China, and the suspect — a former student — has been arrested, police said.
The attack took place in the evening at the Wuxi Vocational Institute of Arts and Technology in the city of Yixing in Jiangsu province, police in Yixing said in a statement, confirming the toll.
This was the second incident of fatal violence in China in a matter of days.
Earlier this week, a 62-year-old man killed 35 people and wounded more than 40 more when he rammed his small SUV into a crowd in the southern city of Zhuhai. The suspect was discovered in the car with a knife, with wounds to his neck thought to be self-harm injuries, according to the police.
Police said the suspect in the knife attack was a 21-year-old former student at the school who was meant to graduate this year, but failed his exams.
“He returned to the school to express his anger and commit these murders,” police said, adding that the suspect had confessed.
In Yixing, police said emergency services were fully mobilized to treat the wounded, and provide follow-up care for those affected by the attack.
Violent knife crime is not uncommon in China, where firearms are strictly controlled, but attacks with such a high death toll are relatively rare.
In recent months, there has been a spate of other attacks.
In October in Shanghai, a man killed three people and wounded 15 others in a knife attack at a supermarket.
And the month before, a Japanese schoolboy was fatally stabbed in the southern city of Shenzhen, which borders Hong Kong.
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
CBS News
Oklahoma attorney general says state schools superintendent cannot mandate students watch prayer video
The Oklahoma attorney general’s office responded after the state’s education superintendent sent an email this week to public school administrators requiring them to show students his video announcement of a new Department of Religious Freedom and Patriotism. In the video, he prays for President-elect Trump.
Ryan Walters, a Republican, announced the new office on Wednesday and on Thursday sent the email to school superintendents statewide. The new department will be within the state’s Department of Education. Walters said it would “oversee the investigation of abuses to individual religious freedom or displays of patriotism.”
“In one of the first steps of the newly created department, we are requiring all of Oklahoma schools to play the attached video to all kids that are enrolled,” according to the email. Districts were also told to send the video to all parents of students.
In the video, Walters says religious liberty has been attacked and patriotism mocked “by woke teachers unions,” then prays for the leaders of the United States after saying students do not have to join in the prayer.
Sue Ogrocki / AP
“In particular, I pray for President Donald Trump and his team as they continue to bring about change to the country,” Walters said.
The office of state Attorney General Gentner Drummond issued a statement Friday saying Walters has no authority under state law to issue such a mandate.
“Not only is this edict unenforceable, it is contrary to parents’ rights, local control and individual free-exercise rights,” said the attorney general’s office spokesperson Phil Bacharach.
Multiple school districts have also said they had no plans to show students the video.
Walters, a former public school teacher elected in 2022, ran on a platform of fighting “woke ideology,” banning books from school libraries and getting rid of “radical leftists” who he claims are indoctrinating children in classrooms. He already faces two lawsuits over his June mandate that schools incorporate the Bible into lesson plans for students in grades 5 through 12. Several school districts have previously stated that they will disregard the mandate.
One of the lawsuits also notes that the initial request for proposal released by the State Department of Education to purchase the Bibles appears to have been tailored to match Bibles endorsed by now President-elect Donald Trump that sell for $59.99 each.
Earlier this week, Walters announced he had purchased more than 500 Bibles to be used in Advanced Placement government classes. The education department that the 500 Bibles are “God Bless the USA Bibles” and were ordered Thursday for about $25,000. They will arrive “in the coming weeks,” the department said.
