Compare Home Equity Loan Rates and HELOC Rates
Review current home equity loan rates and HELOC rates for June 23, 2018
- Loan Type
Thank you for submitting your information!
Your mortgage quote request has been sent to our lending partners and you should receive emails from multiple lenders shortly. Comparing proposals from multiple lenders is the best way to save money on your mortgage!
Mortgage Rates by Loan Product
Mortgage Rate ReportSaturday, June 23, 2018
Mortgage rates dipped slightly this week after rising in response to the Federal Reserve's decision to raise interest rates at its June meeting last week. In its statement, the Fed pointed to a robust labor market, improving household spending, sustained business investment and accelerating inflation to support a 0.250% increase in the target Fed Funds rate to 1.750% to 2.000%. The Fed's removal of measured language from its statement as well as highly positive comments on the economy by Fed Chair Jerome Powell also improved the probability of two more increases rate moves this year and in 2019 as well.
Although June's quarter point rate surprised few, there were mixed opinions prior to the meeting over the number of increases to expect for the remainder of 2018, with moderate wage growth, lower than targeted inflation and potential international trade wars providing rationale for the Fed to pause or slow future rate hikes. Following meeting, however, there is greater certainty regarding the Fed's apporach for the second half of 2018.
While the increase in interest rates and the Fed's more hawkish outlook drove mortgage rates higher across the board last week, in good news for borrowers, we saw rates pullback for several programs this week. It appears that by effectively telegraphing its intentions, the Fed brought increased stability to the mortgage market, which positively impacted rates for certain programs.
The mortgage rate for a 30 year fixed rate loan slid 0.125% higher to 4.375% while the rate for a 15 year fixed rate mortgage remained at 3.875%. The interest rate on a 5/1 adjustable rate mortgage (ARM) was also steady at 3.875%. FHA mortgage rates stayed put at 3.875%, matching VA mortgage rates which held at 3.875%, with both programs remaining attractive to borrowers focused on low or no down payment programs, especially first time home buyers. Jumbo mortgage rates were stable 4.500% while non-owner occupied mortgage rates moved 0.125% lower to 4.625%.
Although the Fed's move to raise rates was widely expected, the mortgage market reaction to the news was better than expected. Rates increased less than expected initially and dropped slightly this week. We have seen rates gradually move higher this year in response to the Fed's forecast and expectations for future rate hikes were reinforced this week. While interest rates are impossible to predict, prospective borrowers looking to buy a home or refinance their mortgage may be able to lock in a lower rate by acting sooner rather than later. As lenders react differently to shifting market conditions, we have also seen the variation in mortgage rate pricing grow recently, which means borrowers benefit more by shopping multiple lenders.
Because rates fluctuate constantly, we continue to actively monitor the market for new developments. Borrowers should check the FREEandCLEAR mortgage rate tables regularly to review personalized, updated mortgage rates for lenders in their area. Our rate tables are free to use and require no personal information.
Why Select a Home Equity Loan or HELOC
Only Access the Amount of Money You Need.
A home equity loan or HELOC enables you to access the specific amount of money you need as compared to a full refinance of your mortgage. A smaller loan amount means that your monthly payment and total interest expense over the life of the loan are lower with a home equity loan or HELOC.
Flexible Financing Option.
Most lenders impose relatively few limits on how borrowers use the proceeds from a home equity loan or HELOC. You can use the money from a home equity loan or HELOC for any number of reasons including to pay-off expensive credit card debt, for home improvements or even school tuition. Although most lenders want to understand how you plan on using your loan proceeds, a home equity loan or HELOC provides you significant flexibility on how you use the equity in your home.
Less Expensive and More Efficient than a Refinance.
A home equity loan or HELOC is less costly and time-consuming compared to alternate ways of tapping the equity in your home including a cash-out refinance. Transaction expenses and fees for a home equity loan or HELOC are typically less than the closing costs to refinance your mortgage because the loan amount is smaller. Additionally, the application and closing process for a home equity loan or HELOC are shorter than the time frame for a refinance. Please note that home equity loan rates and HELOC rates are typically higher than first mortgage rates but the loan amount is smaller so your total interest expense is lower.
Increased Borrowing Capacity.
Lenders typically apply a higher borrower debt-to-income ratio for a home equity loan or HELOC than for a mortgage, which potentially enables you to borrower more money. For example, depending on multiple factors, the maximum debt-to-income ratio for a mortgage is typically 45% to 50% while the maximum debt-to-income ratio for a home equity loan or HELOC is usually 55% or possibly higher under certain circumstances. Using a higher debt-to-income ratio enables you to borrow more money. With a home equity loan or HELOC, to determine what size loan you qualify for lenders primarily focus on the value of your home and the combined loan-to-value (CLTV) ratio of your first mortgage plus your home equity loan or HELOC.
Why Borrowers Compare Home Equity Loan Rates and HELOC Rates on FREEandCLEAR
Comparing home equity loan rates and HELOC rates can save you thousands. Use our rate tables to find the lender offering the lowest rates and fees
Our rate tables put you in control. You can compare lenders anonymously plus you never need to provide your social security number
Review home equity loan rates and HELOC from leading lenders. Our lenders offer highly competitive terms to win your mortgage business
More FREEandCLEAR Mortgage Resources
Understand how a home equity loan works including interest rate, qualification requirements and other key loan terms
Review our comprehensive overview of of how a HELOC works including loan-to-value ratio limits, types of HELOC and other guidelines
Review our detailed comparison of a home equity loan and a HELOC to determine the financing option that is right for you
Review an informative explanation of the trade-offs between a home equity loan and a mortgage refinance