How much will a $30,000 home equity loan cost monthly now that interest rates are lower?

A home equity loan offers homeowners an affordable way to borrow large sums of money right now. Marcia Straub/Getty Images

Less than 10%. That's what a $30,000 home equity loan would be equivalent to now, when borrowed from the average homeowner's equity level. With the median amount there around $313,000 currently, a loan worth $30,000 would leave more than 90% remaining for future use.

But that's not the only benefit of a home equity loan in this amount. Homeowners can use the funds for a wide range of expenses, and if they use it to make certain home repairs and improvements, they may even be eligible to deduct the interest paid on the loan from their taxes for the years in which it was used.

And now, with the Federal Reserve cutting interest rates in September, and other rate cuts widely expected for the central bank's next meetings in October and December, this unique home equity borrowing tool is positioned to become even more affordable for homeowners. With the home in question serving as collateral, though, it's critical that owners can afford their monthly payments, both now and in the future.

Before getting started, homeowners should calculate the costs of a $30,000 home equity loan now, after the Fed cut rates again. Below, we'll do the math and compare the current costs to the recent past so that homeowners can get the context they need to better determine their next steps.

Start by seeing how much home equity you could borrow here.

How much will a $30,000 home equity loan cost monthly now that interest rates are lower?

A home equity loan has a fixed interest rate, making it easy for homeowners to determine their exact monthly payments. Here's what a $30,000 home equity loan would cost now, calculated against two readily available rates and two common repayment periods:

• 10-year home equity loans at 8.34%: $369.39 per month 
• 15-year home equity loans at 8.21%: $290.34 per month

For comparison, here's what a home equity loan in the same amount would have cost in February:

• 10-year home equity loan at 8.55%: $372.76 per month 
• 15-year home equity loan at 8.50%: $295.42 per month

And here's what it would have cost in October 2024:

• 10-year home equity loan at 8.46%: $371.32 per month
• 15-year home equity loan at 8.38%: $293.32 per month

While payments here are cheaper than they were in February and last October, they're only marginally so. And with the average interest rate on a home equity line of credit (HELOC) comfortably under 8% now, borrowers may find that alternative more cost-effective. Explore both, then, to better determine which makes the most sense for your financial circumstances.

Compare your HELOC and home equity loan offers online today.

What about cash-out refinancing?

If you're looking to leverage your existing home equity, a cash-out refinance may be attractive. This occurs when the homeowner pays their existing mortgage balance with a larger loan amount, keeping the difference between the two as cash. In a lower interest rate climate, this could be advantageous, but pursuing this now could be expensive, as it will require you to swap your current mortgage rate for a new one, which is likely to be significantly higher. Research this option to see if the numbers work in your favor. However, in today's economy, a home equity loan or HELOC is likely your better recourse.

The bottom line

A $30,000 home equity loan comes with monthly payments between $290 and $369, approximately, for qualified borrowers. And while that's cheaper than what a home equity loan of this size would've cost in the recent past, it's not so much more affordable as to negate the potential benefits alternative home equity borrowing sources offer now. Explore all of your options, then, and calculate the costs closely to determine your best choice now.