Here's how much a $150,000 home equity loan costs per month now that the Fed cut rates
Borrowing a six-figure sum of money comes with multiple considerations. And, if you elect to do so by withdrawing from your accumulated home equity, you'll need to be extra careful to avoid the risk of foreclosure in the event you're unable to repay it all. At the same time, your home equity is now an affordable and plentiful funding source, so if you get the calculations right, this could be one of your better ways to borrow a large amount, like $150,000.
Right now could be one of those times, too, especially after the Federal Reserve issued an interest rate cut earlier in September. While home equity loan rates are driven by more than just the central bank's monetary policy, cuts there can and often do reduce the costs associated with home equity products. And a home equity loan is no exception.
Still, before getting started, it's critical to understand the potential costs of a loan of this size. Fortunately, it's easy to determine these monthly payments with precision, as a home equity loan comes with a fixed interest rate that will remain the same for the life of the loan (or unless the homeowner decides to refinance). So, how much will a $150,000 home equity loan cost per month now that the Fed cut rates? Below, we'll do the math.
See how much home equity you'd be eligible to withdraw here.
Here's how much a $150,000 home equity loan costs per month now that the Fed cut rates
Home equity loan interest rates vary based on the repayment period length and can be different for each homeowner based on a variety of personal factors. That noted, here's what a $150,000 home equity loan will cost monthly now, calculated against average rates and two common repayment periods:
- 10-year home equity loan at 8.34%: $1,846.97 per month
- 15-year home equity loan at 8.21%: $1,451.72 per month
Is that much cheaper than a loan of this size was earlier this year, however? For context, here's what a $150,000 home equity loan would have cost monthly if secured in February 2025:
- 10-year home equity loan at 8.54%: $1,863.00 per month
- 15-year home equity loan at 8.40%: $1,468.33 per month
And here's what it would have cost at the start of October 2024, following the Fed's 50 basis point rate cut the month prior:
- 10-year home equity loan at 8.50%: $1,859.79 per month
- 15-year home equity loan at 8.41%: $1,469.21 per month
So, payments here are both cheaper than they were at the start of the year and less expensive than they were around this same time one year ago. But rates haven't fallen so dramatically that it makes this a clear decision for homeowners. That said, the difference now compared to February appears a bit clearer when the savings differential is added up over time.
With a 10-year home equity loan, borrowers would save around $16 per month, $192 per year, and just over $1,900 over the decade (compared to the costs from early 2025). With a 15-year home equity loan, borrowers now stand to save around the same amount for each time frame (also compared to early 2025). And with rate cuts looming for October and December this year and potentially others in 2026, this could be an option worth exploring, even if you don't officially apply right now.
Learn more about your home equity loan rate offers and costs here.
The bottom line
A $150,00 home equity loan is more affordable now than it was earlier in 2025 and even a bit cheaper than it was in the fall of 2024. But rates and costs here haven't dropped dramatically, either, leaving homeowners to wonder if this is their best home equity borrowing option or if they'd be better served with an alternative like a home equity line of credit (HELOC). Explore both carefully, and calculate your potential costs as accurately as possible to better determine if either is right for your financial needs now or if you're better served by waiting for the rate climate to cool a bit further.
