What are the monthly payments on a $25,000 home equity loan after the December Fed rate cut?

If you find yourself in need of extra financing right now and interest rates on personal loans or credit cards make you uncomfortable with using either product, you may want to consider a unique funding source: your home equity. While a home equity loan will need to be managed carefully, considering the funding source, accessing an amount like $25,000 should be relatively easy to do. Considering that the average home equity amount is worth hundreds of thousands of dollars right now, and that home equity levels in the country reached a record high earlier this year, this amount should be accessible for even relatively new homeowners.

And there's another reason why a home equity loan may be worth investigating now: Home equity loan interest rates have been gradually declining for more than a year. That's partially due to recent Federal Reserve interest rate cuts, the latest of which was issued this week. This makes home equity loans not only one of the cheapest ways to borrow equity currently, but one of the cheapest ways to borrow money overall.

But what are the monthly payments on a $25,000 home equity loan right now, following the December Fed rate cut? That's what we'll detail below.

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What are the monthly payments on a $25,000 home equity loan after the December Fed rate cut?

Crunching the monthly payments on a home equity loan is simple to do, as the product comes with a fixed interest rate. This makes long-term budgeting stress-free as owners will know exactly how much to pay each month. Here's how much a $25,000 home equity loan will cost post-December Fed rate cut, calculated against today's rates and two traditional repayment periods:

• 10-year home equity loan at 8.18%: $305.70 per month 
• 15-year home equity loan at 8.13%: $240.79 per month

For reference, here's what a home equity loan of this size would have cost after the Fed's October rate cut:

• 10-year home equity loan at 8.20%: $305.97 per month
• 15-year home equity loan at 8.15%: $241.08 per month

And here's what it would have cost after the Fed issued its first 2025 rate cut in September:

• 10-year home equity loan at 8.43%: $309.03 per month
• 15-year home equity loan at 8.31%: $243.41 per month

Monthly payments on a $25,000 home equity loan repaid over 10 years are moderately less expensive now than they were in the summer and just marginally less expensive when spread out over 15 years. But the rate movement here and the affordability that represents can be significant, especially over an extended period of time and particularly when compared to other, more expensive borrowing products.

See how low your current home equity loan rate offers are here.

Should you wait for home equity loan rates to fall further?

It can be tempting to wait for home equity loan interest rates to decline even further, especially considering the three Fed rate cuts in the last four months of 2025. But the Fed is just one driver behind home equity loan rates, albeit a major one. And other factors can cause rates to stagnate or potentially even rise again. Even if that did not happen, Fed rate cuts tend to only cause moderate declines in home equity loan rates, and with just a single cut now expected for 2026, waiting may not be particularly advantageous. Instead, if you need the funds now, lock in one of today's better, lower rates and simply look for opportunities to refinance it in the future.

The bottom line

A $25,000 home equity loan comes with monthly payments ranging from $241 to $306 now, after the Federal Reserve cut rates again this week. That makes payments here the cheapest they've been in a while, and they could be low enough to justify borrowing with this loan, in this amount, right now. Just be sure of your full ability to make repayments as agreed to before formally applying to avoid any foreclosure risks that may otherwise arise.