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Borrowing a large, six-figure sum of money always comes with a series of important considerations, the most critical being the ability to make monthly repayments. But this concern is magnified when borrowing money from your home equity, as you could lose your home to the lender if you fail to make your repayments as agreed on. And it can be difficult to do that with a variable interest rate product like a home equity line of credit (HELOC).
HELOC interest rates are variable and subject to change each month based on the rate climate and broader market conditions. This can be an advantage when rates are declining, as was seen in recent weeks when HELOC interest rates fell to an 18-month low. But it can also be a challenge since HELOC rates are unpredictable. So it helps to first calculate the costs tied to a series of realistic rate scenarios. Below, we’ll do the math for a $150,000 HELOC if applied for now, in early 2025.
Start by seeing how much home equity you could borrow here.
Here’s what a $150,000 HELOC will cost monthly in 2025
As of February 24, 2025, the average HELOC interest rate is just 8.28%, making it one of the least expensive ways to borrow money right now. That rate is lower than what can be secured with a home equity loan, credit card or personal loan. Here’s what monthly repayments would look like at that rate, tied to two common repayment periods on the assumption that the rate will remain constant:
- 10-year HELOC at 8.28%: $1,842.18 per month
- 15-year HELOC at 8.28%: $1,457.83 per month
And here’s what borrowers can expect to pay if that rate drops by 25 basis points later in 2025:
- 10-year HELOC at 8.03%: $1,822.29 per month
- 15-year HELOC at 8.03%: $1,436.08 per month
To be safe, borrowers should also know what those payments could look like if rates increase by the same margin:
- 10-year HELOC at 8.53%: $1,862.19 per month
- 15-year HELOC at 8.53%: $1,479.75 per month
While all of these rate calculations can give borrowers insight into the potential costs of a $150,000 HELOC withdrawn this year, they can’t be relied upon definitively. Rates on HELOCs were in the double digits as recently as early 2024, so rates could easily adjust by more than just 25 basis points, particularly over the extended 15-year period. Prospective borrowers should do the math using a series of realistic interest rates to more accurately determine their costs, both now and in the future.
See what HELOC interest rate you could secure here.
The bottom line
A $150,000 HELOC withdrawn right now will come with monthly repayments ranging from $1,458 to $1,843 for qualified borrowers. But those payments can and will change over time. And it’s crucial to remember that the lowest HELOC rates will be reserved for homeowners with the highest credit scores and cleanest credit histories. So, if you don’t have both, it may be worthwhile to focus on improving your credit before applying. That means refraining from applying for new credit, paying down existing debt and reviewing your credit report for errors or inaccuracies. With your home as collateral, you’ll want to secure the lowest interest rate possible and that will only be accomplished by applying with a clean credit profile.
