Here's how much a $300,000 home equity loan costs monthly now (and expert advice to know)

Home prices are on a hot streak. The National Association of Realtors (NAR) reported this March that the median sale price of an existing home rose 3.8% year-over-year in February, marking the 20th straight month that sale prices increased year-over-year. And, according to NAR Chief Economist Lawrence Yun, the yearly rise in the median home price represented more than a collective $1 trillion increase in home equity. Additionally, a recent study showed that home equity has risen 6% year-on-year. 

Just as home values and equity levels can change from homeowner to homeowner, how much home equity you need to borrow can vary as well. While some homeowners might tap $100,000 to do a kitchen and bathroom renovation, other homeowners may have bigger financial needs that require, say, $300,000. 

A home equity loan can be a good fit if you're looking to borrow $300,000 against your home equity. But how much would those monthly payments be if you took out a $300,000 home equity loan, and who is it a good move for? We provide the answers below. 

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Here's how much a $300,000 home equity loan costs monthly now

Unlike a home equity line of credit (HELOC), which uses a variable interest rate that can change your monthly payment amount over time, your home equity loan's fixed rate means your monthly payments are the same for the life of the loan. Using a home equity loan to tap your equity, then, makes it easier to budget for your monthly payments. Knowing that, here's what a $300,000 home equity loan would cost monthly at today's rates: 

• 10-year home equity loan at 8.50%: $3,719.57 per month
• 15-year home equity loan at 8.44%: $2,943.68 per month

Home equity loan rates have declined since the start of 2024, a development that saves you thousands of dollars in interest over the life of your loan. For example, if you took out a $300,000 home equity loan at the beginning of last year, here's what your monthly payments would be: 

• 10-year home equity loan at 9.08%: $3,813.27 per month
• 15-year home equity loan at 9.08%: $3,057.09 per month

Today's home equity rates can save you around $100 a month on a $300,000 home equity loan compared to what it would've cost in January 2024. And if rates fall significantly lower than what they are now, you could refinance your home equity loan then.

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Who should get a $300,000 home equity loan?

A $300,000 home equity loan could be the largest sum of money that a homeowner receives over a lifetime. As such, certain types of borrowers are a better fit for this size of a loan than others, says Filip Telibasa, a certified financial planner (CFP) at Benzina Wealth, a flat-fee comprehensive financial planning firm. 

"It could be advantageous for somebody who believes on a high level that the opportunity cost is higher than the interest they're paying on the loan," Telibasa says. "This could be starting a business or creating other investments, or doing a home renovation." 

A home renovation isn't always the optimal way to use a $300,000 home equity loan, Telibasa says. However, if you make smart improvements to your home, it could provide a considerable boost in your home's value. "If you're using [the loan] for home renovations, make sure it increases the value of your home and you're not using the money for … purely vanity or aesthetic purposes," he says. 

Additionally, homeowners who have been successful with past investment opportunities and want to repeat that same process with their loan funds may find a $300,000 home equity loan beneficial.

"They've done this before, they're familiar with the process, and they're experienced in using the funds for a particular objective and not going outside those lines," Telibasa says. 

Homeowners looking for a predictable monthly payment they can plan for are also a good fit for a $300,000 home equity loan as opposed to, say, a HELOC, says Ian Wingfield, vice president of mortgage at OneAZ Credit Union. 

"If you have a set budget for a major expense, such as a home renovation, tuition, or debt consolidation, a [home equity loan] ensures that your monthly payments remain the same throughout the loan term," he says. 

While a $300,000 home equity loan may be a good fit for many homeowners, it's important to understand the commitment the loan requires. Make sure you're confident your budget can handle your monthly payments says Christy Bunce, president at mortgage lender New American Funding.

"My biggest tip for someone considering this option would be for them to make sure they can comfortably handle the fixed monthly payments and that the loan fits into their overall financial plan," Bunce says. "It's also smart to have a backup plan, such as an emergency fund, in case their financial situation changes."

The bottom line

A key to success when borrowing a $300,000 home equity loan is to identify what you need the money for, know the cost of that purpose and borrow enough money to cover that cost, Telibasa says. 

"A home equity loan shouldn't be taken out for more than the amount you need," he says. 

Additionally, when you receive your $300,000 home equity loan, it's important to put the money in an account that will earn a solid return for you, such as a high-yield savings account, while you prepare to spend the money on the expense you planned for, says Telibasa.

"We have these very popular high-yield savings accounts that are still paying around 4% due to the Fed not moving much on interest rate changes, so that's a good place to park the money in the interim," he says. "We don't want to keep the money in a checking account that's not earning any interest."