Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Key Points
• Home equity loans provide homeowners the opportunity to borrow against the equity accumulated in their homes.
• Home equity loan rates are influenced by the prime rate and financial market dynamics.
• Borrower-specific factors that can significantly impact home equity loan rates include credit score, loan-to-value ratio, and debt-to-income ratio.
• Home equity loans can be used for a variety of purposes, including home improvements, educational expenses, medical bills, and debt consolidation.
• Home equity loan interest payments may be tax-deductible if the loan proceeds are used for substantial home improvements, up to IRS limits.
In this guide, you’ll find the most current information on home equity loan rates in New Hampshire, including historical rate trends and the factors that influence the rates you may be offered. We’ll help you find the best rate in the Granite State. First, let’s make sure we cover what is a home equity loan.
When you secure a home equity loan, your home becomes the collateral. This often means you can borrow money at a lower interest rate than if you were to get a personal loan. But it also means you have a second mortgage (assuming you’re still paying your first mortgage). Home equity loan interest rates are usually fixed, so if you like a predictable monthly payment, this could be a good fit for you. To qualify for a home equity loan, you typically need at least 20% equity in your primary residence.
In New Hampshire, and elsewhere, you can use a home equity loan for all sorts of things, from sprucing up your space to tackling education expenses, medical bills, or consolidating debt. If you’re wondering what is a home equity line of credit (HELOC), and how it’s different from a home equity loan, stay tuned — we’ll get to that momentarily.
Home equity loan interest rates drive the overall cost of your loan. These rates aren’t just pulled out of thin air. The Federal Reserve sets its rates which in turn influence the prime rate — the interest rate banks offer to their most creditworthy clients.
It’s important to think about how interest rates can affect the cost of your loan over time. For example, a 1% difference in interest rates on a 20-year loan can make a difference in your monthly payment. But it also makes a difference in how much interest you’ll pay over the life of the loan. Look at how that plays out if you borrow $30,000 and repay the funds plus interest over 20 years:
• At 6.00%: The monthly payment would be $215 and the total interest paid would be $21,583.
• At 7.00%: The monthly payment would be $233 and the total interest paid would be $25,822.
• At 8.00%: The monthly payment would be $251 and the total interest paid would be $30,224.
Keep an eye on the prime interest rate as you’re determining how to get equity out of your home. It’s a solid barometer for where New Hampshire home equity loan rates might be headed.
In the chart below, you’ll find some recent history, showing how rates shifted from 2018 to 2023. And then the graphic shows a much longer trajectory, over 50-plus years.
| Date | Prime Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.50% |
| 9/27/2018 | 5.25% |
The prime rate isn’t the only factor driving the interest rate you’ll be offered if you apply for a home equity loan. There’s a long list of other factors that lenders will carefully assess to determine the level of risk associated with your application and offer you a rate that reflects that risk.
You probably recall that your credit score was vitally important when you took out your home loan to purchase your home. If you’re someone who’s been diligent about making timely payments, you’re in luck. Lenders are more inclined to offer you better interest rates. For a home equity loan, they usually look for a credit score of 680 or higher, but many prefer to see 700 or above.
You can expect to need a home appraisal if you apply for a home equity loan, as the market value of your property will determine how much equity you have in your home (remember, most lenders will require you have 20% equity in order to get the loan).
Your home value is also important for computing your loan-to-value (LTV) ratio, which helps determine how much you’ll be allowed to borrow. You can compute your personal number by adding the amount you wish to borrow to the amount you currently owe on your mortgage. Then divide that total by the appraised value of your home. Multiply the result by 100 and you’ll have what’s called a “combined LTV,” or CLTV. The maximum LTV most lenders will allow for a home equity loan is typically 85%. If you’re unsure about how much you might be allowed to borrow, you can use a home equity loan calculator to get that number.
The stability of home values is another thing that lenders consider when setting rates. When the market is on the upswing, lenders are more likely to greenlight larger loans. But when the housing market takes a turn, lenders may tighten their belts, resulting in stricter criteria and smaller loan amounts.
If your property is located in an area that is deemed at high risk for natural disasters, higher interest rates may result, as lenders consider these areas riskier bets.
Policies set by individual lenders can have a significant impact on the interest rates borrowers are offered, and each lender is unique. That’s why you’ll want to compare interest rates, fees, and closing costs from a few different lenders during the loan application process.
Take these steps and you’ll better your chances of finding your lowest available home equity loan rate in New Hampshire.
Elevating your credit score can be the key to unlocking more favorable interest rates. Keep tabs on your score. Check your credit report for inaccuracies and if you find any, request a correction. Pay your bills on time, of course. And don’t max out every credit line you have.
The debt-to-income (DTI) ratio, which compares your monthly debt obligations to your gross monthly income, is a key factor in determining your eligibility for a loan. The typical DTI limit for a New Hampshire home equity loan is 36% to 50%, so it’s important to manage your DTI to ensure you meet the lender’s requirements.
It’s a standard requirement for any home loan to have proper property insurance, and home equity loans are no exception. These policies — including special flood insurance policies — are designed to protect both you and the lender from the unexpected.
In New Hampshire, and across the country, you need to keep at least 20% equity in your home to qualify for a home equity loan. This will help ensure you’re not borrowing more than you can afford.
Home equity loans typically come with fixed interest rates, which means you’ll pay the same amount every month over the life of the loan. While fixed rates offer stability, they may start out higher than variable rates.
As you search for the best home equity loan for you, online calculators can help you estimate your future payments. Here are a few you may find useful:
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Home equity loans typically come with closing costs that hover between 2% to 5% of your loan amount. These may include appraisal, credit report, document preparation, origination, notary, title search, and title insurance fees. It’s wise to factor in these fees as you shop around and compare lenders for a New Hampshire home equity loan.
Couples filing joint tax returns can deduct interest paid on up to $750,000 of qualified home equity loans obtained after December 15, 2017, while single filers may deduct interest paid on loans up to $375,000 — that is, provided you use the money to “buy, build, or substantially improve” a home. For the nitty-gritty on how to maximize your tax benefits, a sit-down with a tax advisor is a smart move.
There are different types of home equity loans you might consider if you’re in the market for a home equity loan. You’ll still want to consider current home equity rates in New Hampshire to make an informed choice where most of these options are concerned.
A HELOC is a bit like a credit card, but one that’s backed by your home. It allows you to borrow up to a certain approved amount and only pay interest on the amount of the credit line you actually use. When you compare a HELOC vs. a home equity loan, this is not the only difference you should note. Unlike a home equity loan, a HELOC typically has a variable rate that can change over time, which means your monthly costs might increase, too.
An HECM, or Home Equity Conversion Mortgage, is a government-insured reverse mortgage that empowers homeowners aged 62 and older to receive payments from the lender based on their home’s value. Borrowers can opt for a lump sum, regular payments, or a line of credit. And no payments are required until you leave the home. This is in stark contrast to home equity loans and HELOCs, which demand regular payments. While HECMs may have higher closing costs and longer processing times, they offer unique benefits that may be worth exploring. (While SoFi does not offer HECMs at this time, we do offer home equity loans and HELOCs.)
A cash-out refinance is a special type of mortgage refinance that allows you to pay off your old mortgage and borrow extra funds to use as you wish. As with a home equity loan, lenders usually allow you to borrow up to 85% of your home’s value. When comparing a cash-out refinance vs home equity line of credit, the main difference, of course, is that the former is a refinance — meaning you’ll be getting a completely new mortgage at current rates in New Hampshire.
Understanding home equity loan rates and the various factors that influence them can empower homeowners to make smart financial decisions. Utilizing online calculators, presenting your best possible financial profile to prospective lenders, and exploring alternative options such as a HELOC or cash-out refi can help ensure a more secure financial future in New Hampshire.
Unlock your home’s value with a home equity loan from SoFi.
A home equity loan of $50,000 would require a monthly payment of $587. That’s assuming an interest rate of 7.25% and a 10-year term. Changing either the rate or term would change the payment amount.
For the most accurate estimate of the monthly payment on a $100,000 HELOC, use a HELOC monthly payment calculator. Payments can fluctuate based on the current interest rate and the amount of your credit line you’ve used.
A home equity loan of $25,000 would mean a monthly payment of $297, assuming you’re able to secure a 7.50% interest rate and repay the loan over 10 years.
When you’re considering a $30,000 home equity loan, the loan term will have a big impact on your monthly payment. Borrow $30,000 at 8.00% and repay it over 10 years and you’ll pay $364 a month. With a 20-year term your payment will be $251. Remember, though, that the longer payment term results in significantly more interest paid over the life of the loan.
There are a number of reasons you might not qualify for a home equity loan, including a poor credit history, not enough equity in your home, a high debt-to-income ratio, and insufficient property insurance. These factors can dramatically affect your ability to get a home equity loan, so it’s important to consider them before applying.
HELOCs offer a variety of benefits, including flexible borrowing options, lower interest rates than credit cards, and the ability to pay interest only on the amount of money you are using. They’re a good solution if you know you need money for a project, such as a home renovation, but you don’t know exactly how much it will cost. Plus, the interest you pay on a HELOC may be tax deductible if you borrow money to substantially improve your home.
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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
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