NEW YORK, NY — Homeowners looking for a large lump sum this September are finding home equity loans more appealing as a way to tap money already tied up in their houses. With about $11 trillion in borrowable home equity, the product is drawing attention from borrowers who need six-figure financing and want predictable monthly payments.
The average home equity loan rate is 8.14%, according to Money.com, which is below the cost of many personal loans and credit cards. That matters for households comparing borrowing options, especially with the possibility of a Federal Reserve rate hike later this month and pressure from still-stubborn inflation.
Monthly payments on a $250,000 loan at today’s average rate
At the current average rate of 8.14%, a $250,000 home equity loan would cost qualified borrowers about $3,051.72 a month over 10 years. Stretching the loan to 15 years lowers the monthly bill to about $2,409.38.
The fixed-rate structure is one of the main reasons borrowers consider this option. Unlike a home equity line of credit, the payment does not move with the market, so households can budget with more certainty even if rates shift after the loan is opened.
That stability can be especially useful for borrowers who know exactly how much they need and want to spread repayment over a set period. Still, the loan is backed by the home itself, so the payment needs to fit comfortably within a household budget.
How the same loan cost in 2025 and in April 2024
The September figures are lower than what borrowers were paying earlier this year and last year. In 2025, a $250,000 home equity loan at 8.50% came with a 10-year payment of $3,099.64 and a 15-year payment of $2,453.06.
Back in April 2024, when rates were even higher, the same loan cost $3,130.48 a month over 10 years at 8.73% and $2,491.25 over 15 years at 8.70%. The comparisons show that even modest changes in rate can shift the monthly bill by dozens of dollars.
For homeowners planning a major expense or debt consolidation move, those differences can add up over time. The current figures are still substantial, but they are less expensive than the same borrowing would have been in the recent past.
Why a home equity loan can be cheaper than other borrowing
Money.com notes that home equity loans are currently much cheaper than many unsecured borrowing options. Personal loans are running above 12% and credit cards are above 20%, making home equity a lower-cost route for borrowers who qualify.
That price gap explains why some homeowners are looking at home equity loans for large needs such as renovations, major bills, or debt payoff. Because the loan is secured by the property, lenders can often offer a lower rate than they would on an unsecured product.
At the same time, that lower rate comes with added responsibility. If a borrower falls behind, the home serves as collateral, which makes the decision more serious than taking out an ordinary personal loan or charging purchases to a card.
Why borrowers are being urged to lock rates and shop around
The current rate environment is still uncertain, and that is one reason borrowers are being told to move carefully but not too slowly. If the Federal Reserve does raise rates later in September, home equity loan pricing could edge higher in response.
Because of that possibility, locking a rate sooner could protect a borrower from paying more later while also making the monthly bill easier to plan around. For households that already know how much cash they need, that certainty can be valuable.
Even so, borrowers are being encouraged to compare lenders rather than accept the first offer they see. An existing mortgage servicer may have a competitive deal, but online marketplaces and other shopping tools can reveal better terms before a homeowner decides where to apply.
What the numbers mean for homeowners weighing a six-figure loan
A $250,000 home equity loan is a major commitment even when rates are lower than they were a year or two ago. The monthly payment alone can top $3,000 on a 10-year schedule, which is why affordability has to come first.
The 15-year option reduces the payment, but it also keeps the debt in place longer. Borrowers have to balance a lower monthly bill against the extra time spent repaying a loan secured by their home.
The broader takeaway is that home equity is available, rates are still relatively favorable, and the fixed payment feature offers predictability. But homeowners are being reminded to borrow with a clear plan, compare offers, and make sure the loan fits their finances before signing.
More on what homes, rents and new builds are doing near you, on RHS Commoner.
