How much will a $50,000 HELOC cost monthly if opened this September?

The need to borrow money, already prevalent in the economic climate of recent years, seems to only be growing in urgency. With inflation comfortably over the Federal Reserve’s target 2% goal, a lack of clarity about when it could fall further, an interest rate hike looming from the central bank (its first since 2023) and credit card debt growing in the most recent quarter, it’s understandable if you find yourself in need of extra funding right now. Finding an affordable way to borrow, however, can be difficult with interest rates on personal loans and credit cards in the double digits, even those for borrowers with good credit scores. If you’re a homeowner, however, you may have a final recourse worth exploring now.

When you borrow home equity with a home equity line of credit (HELOC), you can potentially gain access to hundreds of thousands of dollars. And, if you use it for eligible home repairs and renovations, you may even be able to deduct the interest paid from your taxes for the years in which the HELOC was used. With an average rate of 8.09% now, a HELOC also isn’t just the cheapest way to borrow home equity (home equity loans have higher rates); it’s one of the most affordable ways to borrow money overall. But with your home functioning as collateral here, knowing your potential costs is key to avoiding the risk of foreclosure. 

So, how much will a $50,000 HELOC cost monthly if opened this September? That’s what we’ll calculate below.

Start by seeing how much home equity you’d be eligible to borrow here.

How much will a $50,000 HELOC cost monthly if opened this September?

HELOCs have variable interest rates that change monthly for borrowers, making long-term cost projections difficult to complete with precision. But with the interest rate climate relatively stable right now, borrowers can still gain an approximate idea of what they’ll have to pay. It’s important to note, however, that HELOCs mandate interest-only payments during the initial draw period before the repayment period commences. 

Here’s how much a $50,000 HELOC will cost monthly if opened this September, calculated against today’s average rate and the ***umptions that it won’t change and that the full line of credit is borrowed and repaid immediately:

• 10-year HELOC at 8.14%: $610.34 per month
• 15-year HELOC at 8.14%: $481.88 per month

For context, here’s what a $50,000 HELOC cost in January, when rates were considerably lower:

• 10-year HELOC at 7.44%: $591.94 per month
• 15-year HELOC at 7.44%: $461.80 per month

And here’s what it cost in April, when rates were (temporarily) even lower:

• 10-year HELOC at 7.11%: $583.38 per month
• 15-year HELOC at 7.11%: $452.49 per month

So while rates and costs were lower with this size HELOC earlier in the year, they’re not so much higher now as to render the product inadvisable. And with HELOCs well-positioned to take advantage of interest rate drops when they occur in the future, borrowers can take comfort knowing that they won’t have to refinance (or pay for refinancing closing costs) when that occurs, as the HELOC rate will naturally adapt to market conditions without any work on behalf of the borrower. 

Still, it’s important to account for monthly changes here, with rates both higher and lower than they are now, to better determine long-term affordability.

See how low your current HELOC rate offers are now.

The bottom line

A $50,000 HELOC opened this September is set to have monthly costs ranging from $482 to $610, approximately, based on the ***umptions that rates hold and that the full line of credit is borrowed and immediately repaid. But with rates here likely to change over an extended period and the understanding that the home serves as collateral when being borrowed from, homeowners are encouraged to carefully calculate their potential costs before getting started. It’s also worth speaking with lenders directly as they can outline the risks and benefits of borrowing with a HELOC both this September and in the months and years that follow.