How much would a $30,000 HELOC cost per month?

In today's elevated interest rate climate, home equity borrowing may be one of the most cost-effective ways to secure the financing you need. Both home equity loans and home equity lines of credit (HELOCs) come with significantly lower interest rates than other popular credit options. And they provide access to considerably more money than you could otherwise borrow with a personal loan or credit card, for example. But they're not free, either, and the rates on both borrowing types are higher than they were just a few years ago. 

Understanding this, homeowners considering this option may first want to calculate the potential costs of borrowing. With the average homeowner having hundreds of thousands of dollars to tap into right now, a $30,000 withdrawal can still leave them with a safe amount of equity for the future while allowing them to make ends meet right now. But what would this cost per month, particularly if accessed via a HELOC? That's what we will calculate below.

See how much home equity you could access with a HELOC here now.

How much would a $30,000 HELOC cost per month?

Two factors will determine what a $30,000 HELOC costs per month: the interest rate and the repayment terms (10 or 15 years). However, unlike home equity loans, the rates that HELOCs come with are variable and subject to change over time. So the rate you open the account with is unlikely to be the same one a year from now – or the one you finish paying the line of credit off with. So it's critical to understand that any HELOC calculations you do now will evolve in the future. 

That all noted, here's how much a $30,000 HELOC will cost per month, assuming today's average 9.16% HELOC rate remains the same:

• 10-year HELOC at 9.16%: Your monthly payment would be $382.63, with $15,915.59 in total interest paid for an overall amount of $45,915.59.
• 15-year HELOC at 9.16%: Your monthly payment would be $307.14, with $25,285.56 in total interest paid for an overall amount of $55,285.56. 

Ready to access your home equity with a HELOC? See what interest rate you could secure here.

Other HELOC considerations

While today's HELOC rates are averaging slightly above home equity loans, the variable nature of the former could be beneficial for some borrowers. If inflation continues its downward trend, the Federal Reserve may follow suit by cutting interest rates. And while the Fed doesn't directly dictate rates, lenders do follow their moves. 

So if you open a HELOC now and rates go down later in the year, so will your monthly payment. Compare that to home equity loans which have fixed rates that will need to be refinanced to take advantage of any beneficial rate climate activity. 

Because HELOCs function as lines of credit – versus loans -– you will only need to pay interest on the amount they utilized, not the full credit line you were approved for. And, if you use those funds for qualifying home repairs and projects, you may be able to deduct the interest you paid on the HELOC when you file your taxes. 

The bottom line

With an interest rate under 10% and monthly payments in the $300 range when borrowing $30,000, a HELOC can be beneficial for a wide variety of homeowners in need of money right now. And, considering that the variable rate nature of the HELOC could result in lower payments in the future and the fact that you'll only pay interest on what you use – and that the interest may be tax deductible, a HELOC may be the cost-effective borrowing option you've been looking for.

Have more questions? Find out more about your HELOC options here now.