Your home's equity can be a robust and affordable source to borrow from now.
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At first glance, borrowing from your home equity can sound risky.
Your home serves as collateral, after all, and failure to repay will lead to foreclosure. And this concern becomes more pronounced when borrowing a large, six-figure amount of equity to utilize, like $200,000.
But in the economic climate of October 2025, there are some timely considerations to account for that can help negate these concerns.
For starters, interest rates on home equity lines of credit (HELOCs) are continually falling now. At just 7.84% on average, a HELOC is currently the least expensive way to borrow equity and one of the most affordable ways to borrow money overall. And, based on reports that came out in recent months, the average home equity level is robust now (over $300,000 per household) and cumulative home equity levels are at a new high. So there's plenty to utilize, too.
And with a variable rate responsive to cooling market conditions, a HELOC could be one of the better ways to borrow $200,000 now, as costs are likely to decline as the Federal Reserve continues its new rate-cutting campaign. So, how much does a $200,000 HELOC cost monthly in today's rate climate? Below, we'll crunch the numbers.
Start by seeing how much home equity you could borrow here.
How much does a $200,000 HELOC cost monthly in today's rate climate?
While determining the exact monthly repayment costs of a HELOC is impossible, thanks to its variable rate, borrowers can still get a reliable estimate. Here's what it would cost now, calculated against two common repayment periods on the assumption that the rate remains the same over time:
- 10-year HELOC at 7.84%: $2,409.68 per month
- 15-year HELOC at 7.84%: $1,892.88 per month
For reference, here's what a HELOC of this size would have cost in March:
- 10-year HELOC at 8.06%: $2,432.90
- 15-year HELOC at 8.06%: $1,918.24
And here's what it would have cost last October, when rates were even higher:
- 10-year HELOC at 8.69%: $2,500.08 per month
- 15-year HELOC at 8.69%: $1,991.82 per month
The savings differential on a HELOC of this size just over the last year, then, is stark. A 10-year $200,000 HELOC is now around $100 cheaper per month than it was compared to last October. And, unlike a home equity loan, which will require homeowners to both refinance and pay for refinancing closing costs, a HELOC rate changes automatically each month. That will save borrowers closing cost expenses and the headache of having to refinance. And with rate cuts here imminent, the above rates and costs could soon decline again, perhaps to an even more significant degree.
See how low your current HELOC rate offers are here.
Vary your HELOC payment calculations
While the above rates and costs reflect what a $200,000 HELOC will cost monthly for qualified borrowers now, it doesn't account for changes in the future. Rates here can and will rise and fall, especially over an extended period.
So, before formally applying, vary your HELOC payment calculations to better determine long-term affordability. Calculate costs on the assumption that rates will move up and down, perhaps even by a few points. This will give you peace of mind by knowing that you can still make payments even if rates tick up, avoiding the threat of foreclosure should that scenario ultimately materialize.
And remember that many HELOC lenders will mandate just interest-only payments during the initial draw period, so the above calculations will be even lower should you elect to start your repayments that way, instead.
The bottom line
A $200,000 HELOC comes with monthly payments between $1,893 and $2,410, approximately, right now. And they're set to drop lower in the weeks ahead, if the rate climate continues to decline as many currently anticipate. Still, rates here are variable and inherently difficult to account for long-term, so it's important to have flexibility in your budget. If that's not possible, a slightly higher, fixed-rate home equity loan may be the more appropriate alternative.
Edited by Angelica Leicht
