Here's what a $90,000 home equity loan costs monthly now that rates are cut

The average credit card limit right now is approximately $30,000, according to Experian. The limit on a personal loan varies based on lender and borrower qualifications but is often capped at $100,000. But if you're a homeowner looking to borrow money, you're in luck. The average amount of accessible home equity right now is $214,000 – more than double than what can be borrowed with a personal loan and more than seven times higher than what you can get with a credit card, on average.

For those looking to borrow $90,000, then, a home equity loan makes a lot of sense right now. Not only can the average homeowner access this amount of money with relative ease today, but thanks to a recent rate cut and more likely to come, they can do so at an average rate significantly lower than credit cards (averaging above 20% now) and personal loans (close to 13%). 

Before borrowing this amount, however, owners should first calculate their potential monthly costs. Since your home serves as collateral in these circumstances, it's critical that you only withdraw an amount that you can easily afford to repay. So, how much will a $90,000 home equity loan cost monthly now that rates are cut? That's what we'll calculate below.

See how low of a home equity loan rate you could lock in here.

Here's what a $90,000 home equity loan costs monthly now that rates are cut

The average home equity loan rate is just 8.37% right now but it's slightly higher when tied to specific repayment periods, like the 10-year and 15-year terms. Here's what a $90,000 home equity loan would cost monthly if opened now, tied to rates for those two terms:

• 10-year home equity loan at 8.47%: $1,114.43 per month
• 15-year home equity loan at 8.38%: $879.95 per month

And while no one can predict with certainty what will happen to rates, many do expect the Federal Reserve to issue two additional 25 basis point reductions this year. Here's what monthly payments on a $90,000 home equity loan would be, then, if they fall directly in tandem:

25 basis points cut

• 10-year home equity loan at 8.22%: $1,102.44 per month 
• 15-year home equity loan at 8.13%: $866.85 per month 

50 basis points cut

• 10-year home equity loan at 7.97%: $1,090.52 per month 
  
• 15-year home equity loan at 7.88%: $853.86 per month 

So while you'll pay between $880 and $1,115 per month now to borrow $90,000 with a home equity loan, you may be able to save a bit if you wait for rates to fall. For multiple reasons, however, waiting may not be the best approach right now.

Lock in a low home equity loan rate online now.

Should you wait for rates to fall further?

While it may be tempting to wait for interest rates to fall further to save that extra bit of money, that could be a mistake. For starters, even half a percentage point reduction will only result in a marginal amount saved each month, no matter the loan term, as the above figures demonstrate. And that's assuming that rates even fall by the same amount that the federal funds rate does, which is unlikely to happen. 

Additionally, some of the possible rate reductions to come in the final months of 2024 may have already been priced in by lenders, meaning that there will be little material difference between what you're offered now and what you're offered in December. But waiting, however, means putting off paying for the expenses that you currently need the home equity loan for. So weigh the pros and cons of delaying action carefully.

The bottom line

A $90,000 home equity loan comes with monthly payments ranging between $880 and $1,115 right now. And although those payments could potentially decline as rates are cut, waiting may not be advantageous for many borrowers. Instead, weigh the monthly costs now versus what you could pay in the short-term to better determine the best path forward. And remember that home equity loans can always be refinanced should you discover a much lower rate at some point later in 2024 or into 2025.

Have more questions? Learn more about your current home equity loan options here.