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Why home equity borrowing is cheaper than other options

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Your home may offer you a way to access significant sums of money at a low interest rate.

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Inexpensive borrowing options have been scarce in recent years. Thanks to a combination of high inflation and a series of interest rate hikes designed to keep it from rising further, consumers have been stuck paying significantly more. And few options have been exempt, with rates on mortgages, personal loans, credit cards and home equity loans considerably higher than they were just a few years ago. 

Home equity loans and home equity lines of credit (HELOCs), however, offer significantly lower interest rates than most alternatives, both before the latest inflation surge and right now. And there’s a significant chance that they could become even cheaper in the weeks and months to come. 

But why do these credit options come with lower interest rates — and, more importantly, how can you secure the cheapest one right now? We’ll break down answers to both questions below.

See what home equity loan interest rate you could secure here today.

Why home equity borrowing is cheaper than other options

There’s a simple reason why borrowing from your home equity is cheaper than borrowing in a myriad of other ways. Because your home serves as collateral in these circumstances, lenders consider you to be more likely to pay back what’s been borrowed than you may have been if you took out unsecured debt like a credit card or personal loan. 

With home equity borrowing, your debt is considered secured because your existing home is the source of funding. If you fail to pay back what you borrowed, you could lose your home in the process. Because of this structure, in which the chance of default tends to be lower, lenders generally feel more comfortable providing a lower interest rate than they do otherwise. 

That doesn’t mean that home equity borrowing is exempt from the larger rate climate, however. As rates adjusted upward in recent years, so did the cost of home equity loans and HELOCs. But because of their inherent structure, they’ve been much more cost-effective than personal loans (with average interest rates near 12% right now) and credit cards (with average rates of 21%). 

In comparison, today’s home equity loan and HELOC interest rates are both under 9% right now. And if inflation continues to fall, as it has in both April and May, a cut to the federal funds rate becomes more realistic, and rates on home equity loans and HELOCs would fall even further. 

Start exploring home equity loan rates and lenders online now.

How to get a cheap home equity loan now

There are multiple ways to secure a cheap home equity loan now, but it will take some work and patience on behalf of the homeowner. Here are three ways to pay less on your loan:

  • Shop around: Not every lender will offer the same rate and terms (and you can use a different bank than the one you have your mortgage with). So be sure to shop around to find the cheapest options available.
  • Skip a HELOC: While HELOCs can have lower rates than home equity loans, the latter has a slight edge right now. But, more importantly, that lower rate is fixed while HELOC rates are variable and subject to go up or down as the rate climate evolves. 
  • Boost your credit: While home equity borrowing is different from other credit options, it still operates the same way in that lenders will only offer the best deals to those with the highest credit scores and cleanest credit histories. So, if you want to pay less, first make sure to improve your credit as much as possible. 

The bottom line

In an evolving rate climate in which cuts look inevitable — but where rates are still high now — borrowers need to be judicious with how they borrow. Fortunately, home equity borrowing offers a relatively cheap way for homeowners to access extra cash. Because their home serves as collateral in these scenarios, lenders tend to offer lower rates than they would for other, unsecured borrowing transactions. But it’s still important to do your due diligence to secure the best option by shopping around, choosing a HELOC over a home equity loan and improving your credit as much as possible. Finally, because of the unique nature of home equity, make sure to only borrow exactly what you need so that you can easily pay it back and avoid the risk of losing your home in the process. 



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Rep. Mike Turner says all “candidates need to deescalate” after Trump assassination attempts

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Rep. Mike Turner, an Ohio Republican who chairs the House Intelligence Committee, responded Sunday to Eric Trump’s implication that his father’s Democratic opponents were responsible for the attempts on former President Trump’s life, saying the innuendo was “of course” inaccurate but political candidates on both sides of the aisle “need to deescalate” their rhetoric.

“No, of course not,” Turner said in his latest appearance on “Face the Nation with Margaret Brennan,” after being asked whether he believes there was truth to claims made by the former president, his son Eric, and his vice presidential running mate, Sen. JD Vance, at a rally where each either implied or suggested Democrats tried to kill him.

Trump returned Saturday to Butler, Pennsylvania, to speak to supporters gathered at the Butler Farm Show fairgrounds, the site of the July 13 assassination attempt against him. A gunman facing Trump on the podium at that rally opened fire into the crowd, grazing Trump’s ear, killing one attendee and injuring two others, according to authorities. The gunman was killed by a Secret Service sniper, officials said. 

Another apparent assassination attempt happened in September when a suspect pointed a gun in Trump’s direction on the Florida course where he was playing golf. The FBI has opened probes into both incidents. 

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Rep. Mike Turner on “Face the Nation with Margaret Brennan,” Oct. 6, 2024.

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Trump, his son and Vance all acknowledged the assassination attempt in Butler at Saturday’s campaign event.

“Over the past eight years, those who want to stop us from achieving this future have slandered me impeached me indicted me tried to throw me off the ballot and, who knows, maybe even tried to kill me,” said the former president, while Eric Trump claimed his father’s political opponents “tried to kill him, and it’s because the Democratic party, they can’t do anything right.”

Vance, in his remarks, addressed Trump’s Democratic challenger in the presidential race, Vice President Kamala Harris, and suggested that the Republican nominee “took a bullet for democracy.”

Brennan asked Turner: “You don’t mean to imply here anything that would suggest Eric Trump’s allegations that Democrats are trying to kill him?”

“No, of course not,” Turner responded. “But I do think that Vice President Harris needs to actively state and acknowledge that her administration is saying a foreign power, which would be an act of war, is actively trying to kill her opponent.”

The attempts on Trump’s life came after a citizen of Pakistan with ties to Iran was arrested and charged with allegedly planning a murder-for-hire scheme targeting Trump, among others. Although the timing of the charges coincided with the first attempt, there was no indication that the two incidents were related.

Turner criticized Harris for what he viewed as a failure to openly condemn the alleged plot.

“I think there’s certainly a role for her to play and for the president to play in this, in both identifying that there are threats against Donald Trump that need to be acknowledged and responded to, to deter,” he said. “I think all the candidates need to de-escalate, certainly in their language.”

But the congressman did acknowledge that a Biden-Harris Justice Department official, Matthew Olsen, the head of the national security division, said the U.S. government has been “intensely tracking Iranian lethal plotting efforts targeting former and current U.S. government officials — and that includes the former president.”

“I would say that we are very concerned — gravely concerned — about Iranian plotting,” Olsen told CBS News in a recent interview.



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Maps show track of Hurricane Milton as forecasters predict landfall in Florida this week

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South Florida prepares for heavy rainfall, flooding in wake of Tropical Storm Milton


South Florida prepares for heavy rainfall, flooding in wake of Tropical Storm Milton

04:09

Hurricane Milton rapidly intensified into a Category 1 storm on Sunday, and it has set its path on Florida’s Gulf Coast.

Forecasters predict Milton will make landfall around the Tampa Bay area on Wednesday, bringing with it upwards of 120 mph winds and drenching an area still reeling from Hurricane Helene.

As of 2 p.m. ET on Sunday, Milton was centered about 290 miles west-northwest of Progreso, Mexico, and about 815 miles west-southwest of Tampa. It had maximum sustained winds of nearly 80 mph and was inching north-northeast at 6 mph.

Path of Hurricane Milton

A map from the National Hurricane Center shows Milton continuing to strengthen into a major hurricane as it approaches Florida’s western coast.

“Milton is forecast to rapidly intensify during the next couple of days and become a major hurricane on Monday,” forecasters said.

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The projected path of Hurricane Milton as of Oct. 6, 2024

NOAA/National Hurricane Center


The storm is expected to remain north of Mexico’s Yucatan peninsula, with heavy rainfall expected as Milton makes its way northeast toward Florida. Tropical storm watches are currently in effect from Celestun to Cancún, Mexico.

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The current wind field for Hurricane Milton as of Sunday, Oct. 6, 2024.

NOAA/National Hurricane Center


The hurricane center said hurricane and storm surge watches could be issued for parts of Florida later Sunday.

Florida officials prepare for more impact

Florida Gov. Ron DeSantis said Sunday that while it remains to be seen just where Milton will strike, it’s clear that Florida is going to be hit hard. “I don’t think there’s any scenario where we don’t have major impacts at this point,” he said.

“You have time to prepare — all day today, all day Monday, probably all day Tuesday to be sure your hurricane preparedness plan is in place,” the governor said. “If you’re on that west coast of Florida, barrier islands, just assume you’ll be asked to leave.”

Tropical Weather
This GOES-16 GeoColor satellite image taken at 4:50 p.m. EDT and provided by National Oceanic and Atmospheric Administration (NOAA) shows Tropical Storm Milton, center, off the coast of Mexico in the Gulf of Mexico, Saturday, Oct. 5, 2024.

NOAA via AP


DeSantis expanded his state of emergency declaration Sunday to 51 counties and said Floridians should prepare for more power outages and disruptions, making sure they have a week’s worth of food and water and are ready to hit the road. 

The Federal Emergency Management Agency, meanwhile, coordinated with the governor and briefed President Biden Sunday on how it has staged lifesaving resources.

“I highly encourage you to evacuate” if you’re in an evacuation zone, said Kevin Guthrie, executive director of the Florida Division of Emergency Management. “We are preparing … for the largest evacuation that we have seen, most likely since 2017, Hurricane Irma. “

As many as 4,000 National Guard troops are helping state crews to remove debris, DeSantis said.

“All available state assets … are being marshaled to help remove debris,” DeSantis said. “We’re going 24-7 … it’s all hands on deck.”



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American and U.K. climbers rescued after 2 days stranded on Himalayan mountains in India

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An American climber was rescued after she and another alpinist from the U.K. were stranded for two days at more than 20,000 feet in the Himalayan mountains.

Michelle Dvorak, 31, and Fay Manners, 37, went missing on Thursday after their equipment and food tumbled down a ravine while trekking up India’s Chaukhamba mountain, CBS News partner BBC reported.

The pair sent an emergency message but search and rescue teams were unable to find them.

Rescued British and U.S. climbers pose for a photo with rescuers in Joshimath, Uttarakhand
Rescued British and U.S. climbers pose for a photo with rescuers in Joshimath, Uttarakhand, India on October 6, 2024.

INDIAN AIR FORCE/Handout via REUTERS


Manners told the BBC they were “terrified” as they tried to make part of the descent down the treacherous mountains without supplies.

“I watched the bag tumble down the mountain and I immediately knew the consequence of what was to come,” she said. “We had none of our safety equipment left. No tent. No stove to melt snow for water. No warm clothes for the evening.”

The terrifying ordeal intensified when it started to snow. They took cover on a ledge while waiting for rescuers.

“I felt hypothermic, constantly shaking and with the lack of food my body was running out of energy to keep warm,” Manners said.

The rescue was made difficult because of the conditions, including bad weather, fog and high altitude.

“The helicopter flew passed again, couldn’t see us. We were destroyed,” Manners told the BBC.

British and U.S. climbers are rescued at the location given as Uttarakhand
British and U.S. climbers are rescued at the location given as Uttarakhand, India on October 6, 2024.

INDIAN AIR FORCE/Handout via REUTERS


On the second day, the pair began to cautiously abseil down the mountain. They spotted a team of French climbers coming toward them. Manners said they shared their equipment and food and contacted the helicopter company with an exact location.

“I cried with relief knowing we might survive,” she said.

The Indian Air Force said in a post on the X social media platform that their helicopter airlifted the climbers from 17,400 feet after “battling two days of bad weather.”

Chaukhamba is a mountain massif in the Garhwal Himalaya in northern India.



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