How much will a $150,000 home equity loan cost per month in 2025?
The more money you need to borrow, the more difficult the eligibility criteria tend to be. And if you're looking to borrow a six-figure sum of money via a personal loan or credit card, you can expect the process to be particularly arduous. Fortunately, homeowners have a viable and relatively simple way to borrow $100,000 or more by turning to their home equity.
With a home equity loan, in particular, borrowers can take advantage of their accumulated equity at an interest rate much lower than what's available with either of those other two options. And with the average home equity amount sitting around $320,000 now, a loan amount for around half of that will be relatively easy to obtain since it will still maintain the 20% equity threshold most home equity lenders prefer owners keep in their home.
Before getting started, however, prospective borrowers should carefully consider their potential costs, especially now that inflation is rising again and that hopes of an imminent interest rate cut have been delayed. In this climate, owners must know exactly what their future repayments will be. Fail to make monthly payments as agreed upon and owners could lose their home to the lender. So it's important to get the math right. But how much will a $150,000 home equity loan cost per month now, if opened in early 2025? Below, we'll break down the calculations.
See how much home equity you'd be eligible to borrow here.
How much will a $150,000 home equity loan cost per month in 2025?
The average home equity loan interest rate right now is 8.40%, but a bit higher tied to 10-year repayment periods (8.54%) and 15-year repayment periods (8.49%). Here, then, is what qualified borrowers with good credit scores can expect to pay monthly for a $150,000 home equity loan opened now, based on those three rates:
- 10-year home equity loan at 8.40%: $1,851.77 per month
- 15-year home equity loan at 8.40%: $1,468.33 per month
- 10-year home equity loan at 8.54%: $1,863.00 per month
- 15-year home equity loan at 8.49%: $1,476.23 per month
So borrowers can expect to pay between $1,477 and $1,852 per month for a $150,000 home equity loan opened now – assuming they have good credit. If they don't, these rates could be materially different, or home equity lenders may not approve the application in its entirety. Owners should first review their credit report and understand their current credit score before formally applying, then.
See what home equity loan interest rate you'd currently qualify for here.
What about a $150,000 personal loan?
To better understand the benefits of borrowing via a home equity loan, homeowners may find it helpful to compare the monthly costs of a $150,000 home equity loan to a personal one. And since the latter type doesn't use the home as collateral, it may be tempting to pursue a six-figure personal loan instead. But the difference in rates and, thus, monthly payments, is not insignificant.
Here's what a $150,000 personal loan would cost qualified borrowers monthly now if they repay it on the same timeline as their home equity loan:
- 10-year personal loan at 12.37%: $2,184.27 per month
- 15-year personal loan at 12.37%: $1,836.11 per month
Homeowners, then, will save hundreds of dollars per month by using a home equity loan instead of a personal one. If you're comfortable with using the home as collateral, then, a home equity loan becomes the clear better option.
The bottom line
A loan of $150,000 won't come with cheap monthly payments, even if you have great credit. But, if you do, you'll generally find more cost-effective rates and terms with home equity loans rather than personal loans, as illustrated above. Ultimately, however, the decision between the two is a personal one that should be made both carefully and strategically. By taking the time to calculate your potential monthly repayments now, in advance of formally applying, you'll maximize your chances of borrowing success both immediately and long term.
