Do interest rates for home equity fluctuate?

If so, is there a trend/season when they're better?

Are home equity loans higher rates than refi?

Re: Do interest rates for home equity fluctuate?

When we got our HELOC, it was 1.99% for 2 years then prime forever after the 2 years. This was in May 2014. We used TFCU and they were very easy to work with and the whole thing went quickly.

Re: Do interest rates for home equity fluctuate?

Thank you! What do you mean prime? P

Do interest rates for home equity fluctuate?

yes interest rates for any type of loan will fluctuate. It is not seasonal it is depending on what the feds set the rate at.

Re: Do interest rates for home equity fluctuate?

Posted by Dani

Thank you! What do you mean prime? P

Re: Do interest rates for home equity fluctuate?

Posted by mommy2be716

Posted by Dani

Thank you! What do you mean prime? P

prime means the going rate at the time. For example, if you did a 300k HELOC at 1.99% and withdrew 25k from it, you typically only have 2 years to pay it off at the 1.99% rate. If after 2 years the going rate is 3%, you would just be paying off that 25k you withdrew at a slightly higher rate.

To answer your other question: typically a HELOC is a much better idea than a renovation loan, but not necessarily better than a refi. Depending on the mortgage rate you have now, you could qualify for a pretty decent cash out refinance, and have the cash to pay for whatever house work you want without having a loan to pay. Island FCU has a $499 refinance deal going on. It includes all of the closing costs and everything. I would check it out

Do interest rates for home equity fluctuate?

Prime rate is the lowest interest rate that money can be borrowed, in commercial (business) settings. The HELOC rate is usually prime for a certain period of time and then prime + _____ (whatever your contract says) for the rest of the loan term. So yes, your interest rate will fluctuate, with whatever prime rate is. But, you are usually only paying interest on the amount of the HELOC that you actually use (if you take a HELOC for $100K but only use $25K, you pay interest on the $25K).

With a refi, you can do a fixed rate (just like a regular mortgage)- so your payment will not change during the term of the loan. You pay interest on the entire amount from day 1. You can get an adjustable rate mortgage (refi) which will have a certain interest rate for a given amount of time (1 yr, 5 yr, 7 yr etc) - and what the rate will adjust to after that will depend on other factors (could be prime rate based adjustment), that will be in the contract (mortgage commitment)