Discover if refinancing your home equity loan makes sense in 2025 with these three key signs.
When it comes to refinancing your debt, many borrowers first think of their mortgage or, perhaps, their student loan. But home equity loan s can also be refinanced to a lower rate.These products, which allow homeowners to borrow equity from their home in a lump sum, spiked in the high interest rate climate of recent years.
But, now, in today's evolving economic climate and with the potential for additional interest rate cuts to come in 2025, a refinancing of a home equity loan could make sense for a wide swath of borrowers. Below, we'll list three reasons why this could be the right move to make now.Start by seeing what new home equity loan rate you could qualify for here.Should you refinance your home equity loan in 2025?Not sure if it's the right time to refinance your home equity loan? Here are three signs it may be:You can get a rate one full point lower than your current oneIf you can refinance your loan to an interest rate one full point lower than your current one, then conventional wisdom says it's worth doing. And if you took out your home equity loan in 2023 or early 2024, the interest rate climate has dropped so significantly that you may already be in this range. In 2023, for example, home equity loan rates for qualified borrowers were close to the 10% mark. But as of January 7, 2025, they're averaging just 8.41%. So if your current loan has a rate of 9.41% or higher, you could realize substantial savings by refinancing now. For some, even half a percentage point difference could be enough to make it worth taking action.See how much you could save by refinancing your home equity loan now.Current payments are difficult to manageIf your current home equity loan payments are difficult to manage, any savings there will help. And this is critical to explore. Since the home in question functions as collateral in these circumstances, it's critical to repay all that's been borrowed to avoid losing your home to the lende
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