2 cheap ways to borrow $100,000 worth of home equity right now

With inflation cooling, unemployment numbers strong and interest rates on the decline, the economy is trending in a positive direction. But after years of high inflation and elevated costs for many everyday purchases, it will take some time for Americans to regain their financial footing. To help make ends meet, then, it may be worth exploring some borrowing options. 

For those who need a large, six-figure sum, however, there are few cost-effective options available. Personal loans, for example, come with interest rates of around 13% right now while credit cards are near a record high of 23%. Homeowners, however, have multiple ways to access $100,000 via their home equity – and they can do so at interest rates significantly lower than those attached to popular alternatives. And these options could become even cheaper as the Federal Reserve continues its interest rate cut campaign. Below, we’ll break down two of the cheapest ways to borrow $100,000 worth of home equity right now.

Start by seeing how low of a home equity loan rate you could secure here.

2 cheap ways to borrow $100,000 worth of home equity right now

Need to borrow $100,000 worth of home equity now but don’t want to pay a ton to access it? Here are two of the cheapest ways to get it right now:

Home equity loans

Unlike cash-out refinancing, which will require you to exchange your current low mortgage rate for a higher one, home equity loans let you borrow from your home while leaving your existing mortgage terms alone. Home equity loans are one of the least expensive ways to access your equity with an average rate of just 8.36% right now — approximately five points cheaper than personal loans and about three times less expensive than credit cards. And rates on home equity loans are on the decline and could fall further as the Fed issues additional rate reductions in November and December.

So, what would a $100,000 home equity loan cost per month now that rates have been cut? Around $1,232 monthly if it’s repaid over 10 years and just $977 if you choose a 15-year repayment term. And those rates are locked, meaning that even if rates rise again in the future, you’ll be protected with the lower, fixed rate.

Get started with a home equity loan online now.

Home equity lines of credit (HELOCs)

A HELOC comes with a slightly higher interest rate currently (8.69% versus the home equity loan’s 8.36%). But that could soon be a moot point as the HELOC has a variable rate subject to change over time. And with interest rates on the decline, rates on this product could fall multiple times in the months to come. You also won’t need to refinance to secure that lower rate, as you would with a home equity loan, as HELOC rates change independently each month. 

So, what would a $100,000 HELOC cost per month now that rates have been cut? Around $1,250 if paid back in 10 years and approximately $996 if repaid in 15 years. But that’s an estimate as HELOC payments will change as rates do. And with rates falling, your monthly HELOC payments are likely to drop as well.

The bottom line

If you’re looking for a way to borrow $100,000 worth of home equity (or more), home equity loans and HELOCs are two of the cheapest ways to do so. They have lower rates than personal loans and credit cards and come with fewer caveats and restrictions than cash-out refinance loans and reverse mortgages. As is the case with all home equity borrowing products, however, it’s critical that you only borrow an amount that you can comfortably afford to repay or you could risk losing your homeownership in the process.

Learn more about your best home equity borrowing options here now.