Current Mortgage Rates

Wednesday, December 03, 2008



A home equity line of credit is a loan that is taken against the equity in your home. In practice, however, it operates more like a credit card than a mortgage. The collateral on the loan is your house and, depending upon where you live, local lending laws will regulate how much you can borrow.

In fact, in recent years spending has outpaced saving and the average American carries nearly $10,000 in credit card debt. Using a home equity loan to bring your credit cards to a zero balance can save you thousands of dollars, especially when you consider how much interest you might accrue paying only the minimum on high balances each month. If you choose a home equity loan to pay off your credit cards be very careful to then use cash for most or all of your expenses. If not, you might find yourself with the burden of paying new credit card debts in addition to loan payments. Don't forget a home equity loan is secured by your home. If you fail to repay the loan as agreed you run the risk of foreclosure.

A home equity line of credit also has its disadvantages. You are using the equity in your home, which means that it will not be available to you upon the sale of your home. For example, if you owe $100,000 on your mortgage and you sell your home for $200,000, you would normally make $100,000 minus the real estate agent fees and selling costs. If you also have a $50,000 second mortgage, you will receive just $50,000 minus the other costs. Also, since your home equity line of credit has a variable interest rate, it could always go up. A HELOC may also have an annual fee. After you have weighed your options and considered your needs, a home equity line of credit can be a useful tool.




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Current Mortgage Rates*

Loan Type
National Average
30-yr. fixed5.88%
30-yr. fixed jumbo7.62%
15-yr. fixed5.50%
15-yr. fixed jumbo7.50%
7/1 ARM6.25%
5/1 ARM5.88%
3/1 ARM5.88%
1-yr. ARM6.75%
1-yr. LIBOR ARM6.12%
10/1 ARM7.88%
40-yr. fixed7.00%
*Mortgage Rates Updated: 12/01/2008