How much will an $80,000 HELOC cost monthly now that the Fed has reduced interest rates?

Homeowners should carefully review their HELOC options before borrowing $80,000 in today's cooler interest rate climate. Getty Images/iStockphoto

With the average home equity level in the country sitting just under $320,000 now, borrowing $80,000 could be one of the easier ways to meet your financial goals. And, after the Federal Reserve issued another interest rate cut in September, it's one of the cheapest ways to do so, too. 

Not only will an $80,000 HELOC leave approximately 75% of your existing home equity untouched, but if you act now, you'll secure the line of credit with a rate under 8%. That makes HELOCs cheaper than home equity loans, personal loans and credit cards. And, thanks to the variable rate the HELOC comes with, borrowers who act now will be well-positioned to exploit additional Fed rate cuts in the months ahead as rates here change independently each month.

Still, your home equity is the funding source in this equation, so it's critical that you can make your payments with ease to avoid the threat of foreclosure. But how much will an $80,000 HELOC cost monthly now that the Fed has reduced interest rates again? That's what we'll calculate below.

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

How much will an $80,000 HELOC cost monthly now that the Fed has reduced interest rates?

Determining the exact monthly costs of a HELOC, no matter the size, is difficult to do thanks to the product's variable rate. Still, borrowers can get an approximate idea of what it will cost to borrow. 

Here's what an $80,000 HELOC will cost monthly now, calculated against today's average rate and two traditional repayment periods:

• 10-year HELOC at 7.88%: $965.56 per month
• 15-year HELOC at 7.88%: $758.99 per month

To better appreciate the current cost-effectiveness of this product, it helps to also know what a HELOC of this size would have cost in February:

• 10-year HELOC at 8.29%: $982.92 per month
• 15-year HELOC at 8.29%: $777.98 per month

And here's what an $80,000 HELOC would have cost in October 2024, in the weeks after a September Fed rate reduction:

• 10-year HELOC at 8.94%: $1,010.81 per month
• 15-year HELOC at 8.94%: $808.56 per month

Payments on a HELOC, then, are significantly less than they were. For 10-year periods, they're about $45 cheaper per month compared to the same time last year, and for 15-year periods, they're close to $50 cheaper. That adds up to real savings for borrowers over time. Before getting started, however, be sure to calculate your costs against a variety of realistic rate scenarios (including rates both lower and higher than what's currently available) to better determine long-term affordability. 

See how low of a HELOC rate you could qualify for here.

How much does an $80,000 home equity loan cost now?

For those borrowers who prefer a fixed interest rate, which is understandable when borrowing from such a vital funding source as your home equity, a home equity loan may be attractive. For context, here's what an $80,000 home equity loan costs now, calculated against today's rates and the same repayment periods as the HELOC:

• 10-year home equity loan at 8.43%: $988.89 per month
• 15-year home equity loan at 8.31%: $778.91 per month

Rates and, thus, payments here are a bit more expensive than a HELOC. So the fixed rate and predictability of a home equity loan will need to be weighed carefully against the lower rate and affordability that a HELOC comes with now.

The bottom line

An $80,000 HELOC comes with monthly payments between about $759 and $966 right now, but those numbers could change quickly, perhaps before the end of the year, thanks to the HELOC's variable rate. But with an interest rate lower than most popular alternatives and the inherent ability for that rate to fall even further in the months to come, this could still be one of the better ways to borrow money currently.