Why you should choose a higher HELOC rate over a home equity loan now

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A higher HELOC interest rate now may be better than the lower home equity loan rate option. Here's why.

Interest rates on borrowing products have surged in recent years thanks to the pandemic, inflation and multiple hikes to the federal funds rate. But the interest rate climate is evolving again, with recent reports showing a further cooling in the inflation rate . Inflation hovers just around 3% now and, if it continues to fall, the Federal Reserve could issue its first interest rate cut of 2024. So borrowers could soon see relief on everything from mortgages to student and personal loans.

While this is a drawback in a climate in which rates are heading upward, it can be a benefit this summer and into 2025, particularly now, when the average homeowner has hundreds of thousands of dollars worth of equity to tap into.See how much home equity you could use with a HELOC here.


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