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The Federal funds rate is now at its lowest level since 2022.
That was the big financial news on Wednesday afternoon after the Federal Reserve issued another interest rate cut, this time in the amount of 25 basis points. The cut was the third such one in the last four months, dropping the federal funds rate to a range of 3.50% to 3.75%. Now at its lowest level since November 2022, the cut could open up new, more affordable borrowing opportunities for millions of Americans.
While this cut will impact different products in different ways, it may be more powerfully felt for home equity borrowers. Rates on home equity loans and home equity lines of credit (HELOCs) are already lower than they were around one year ago, and now, they could both fall again.
With home equity levels rising to a new, cumulative level according to a summer report, too, it could be a smart time to borrow from your home. And a home equity loan for $50,000 may be the right way to do it, as it will provide access to a substantial amount of money while keeping a healthy portion of your equity untouched for the future. But with your home as collateral in this exchange, it’s critical that you can afford to make your monthly payments as agreed to.
How much will a $50,000 home equity loan cost monthly, however, after the December Fed rate cut? Below, we’ll do the math.
See how much home equity you’d be eligible to borrow here.
How much will a $50,000 home equity loan cost monthly after the December Fed rate cut?
Calculating the monthly costs of a home equity loan is simple to do with precision thanks to the product’s fixed interest rate. Here’s how much a $50,000 home equity loan will cost per month now, calculated against today’s available rates and two traditional repayment periods:
- 10-year home equity loan at 8.18%: $611.40 per month
- 15-year home equity loan at 8.13%: $481.59 per month
For context, here’s what a home equity loan of this size costs monthly after the Fed’s previous rate cut in October:
- 10-year home equity loan at 8.21%: $612.20 per month
- 15-year home equity loan at 8.10%: $480.72 per month
And here’s what it cost following a September 2025 Fed rate cut:
- 10-year home equity loan at 8.43%: $618.06 per month
- 15-year home equity loan at 8.31%: $486.82 per month
So, monthly payments on a $50,000 home equity loan repaid over 10 years are both slightly cheaper than they were in October and September, while costs for a 15-year option are around the same as they were in October and about $5 lower than they were in September. Still, these are just average rates, and they can and likely will change as the Fed rate cut has a better chance to reverberate throughout the broader interest rate climate. It makes sense, then, to shop around for rates and lenders to see if you may qualify for an even lower rate than those listed here.
Shop for home equity loan rates and lenders online today.
Don’t automatically use your current mortgage lender
The lender who currently holds your mortgage could be offering the best home equity rates and terms right now … or they may not be. The important thing to remember is that you don’t need to automatically use your current lender to secure a home equity loan, and there’s a strong argument to be made that you shouldn’t. Instead, shop around and see what others are offering. Then consider taking the best deal back to your current lender to see if they can beat it. This will take some time and effort, but it could be worth the work if it pays off in the form of a lower rate and more affordable monthly payments.
The bottom line
A $50,000 home equity loan now comes with monthly payments ranging from around $482 to $611 for qualified borrowers. That means payments here are lower than they were earlier in the year, but not materially different from what they were in recent months. With that being said, the trajectory here is an unmistakable one for borrowers. Home equity loans are becoming more affordable and can become even cheaper after today’s rate cut is fully digested by the rate climate. So, if you’re in need of a five-figure loan now and don’t want to pay an exorbitant rate to secure it, a home equity loan may be worth a closer look.
