4 home equity loan questions to ask this September
Home equity levels are high. Home equity loan interest rates are low. And interest rate cuts are seemingly on the horizon. So borrowing from your home equity should be a relatively straightforward decision right now.
But that's not necessarily the case for each homeowner this September. Nor should it be. Borrowing from your home equity, after all, should always be done strategically and with care. If you borrow and ultimately find yourself unable to repay your loan, you could risk having your property foreclosed on. So it's important to make the right decision, especially this month.
Making the right choice starts with answering the right questions. And, this September, there are a few timely ones worth evaluating before taking any formal action. Below, we'll break down four home equity loan questions homeowners should be considering the answers to currently.
Start by seeing how low your home equity loan rate offers are here now.
4 home equity loan questions to ask this September
While having the clear answers to the following questions may not be all you need now, they're a good starting point for homeowners considering tapping into their equity with a loan:
How much do I really have to borrow?
Home equity levels rose to a record high recently, according to a report released in August. That means the average homeowner has hundreds of thousands of dollars worth of equity to utilize now. But are you the average homeowner? If you've paid off all or most of your home, you may have more to work with. And if you're in a location where home values have soared, there may be a sizable amount of equity to borrow even if you have a sizable mortgage balance. And don't forget that home equity lenders typically limit how much you can borrow. Before getting started, then, look into how much equity you actually have to borrow this September. You may be surprised at what you find out.
See how much equity you have to withdraw here.
Can my financial needs wait?
A home equity loan can be a smart tool for debt consolidation or home projects. But it's less effective for college education costs or to buy a new car. Determine, then, if your financial needs can wait or if they're truly urgent. While rates on home equity loans just hit their lowest level in 2025, they're still over 8% overall. Make sure, then, that the costs of using one this September are worth it.
Will I miss out on rate cuts?
With a rate cut at the September Federal Reserve meeting all but guaranteed right now (the CME Group's FedWatch predictor tool has it listed at around a 97% certainty currently), rates here may decline later this month. And they could continue to fall later in 2025, assuming additional cuts are issued. Borrowers, then, will need to calculate the costs of what they can potentially secure in the future versus what they'd pay now to determine if delaying an application makes sense. Remember, home equity loans can be always be refinanced. So, if you need the funds this September, waiting for a small cut that may not even be formalized could be risky.
Can I endure volatility with a HELOC instead?
HELOC interest rates are variable and likely to drop now that rate cuts are back in play. But they can change monthly and increase if the rate climate heats up again, too. While they are a naturally attractive alternative to pursue this September, then, borrowers will need to ask themselves if they can endure volatility in the future should the direction of interest rates reverse. Closely compare the costs of both products, not only now but against what rates could be in the future to better determine long-term affordability.
The bottom line
The answers to these four home equity loan questions will vary from homeowner to homeowner, not only this September but in the months that follow. Answering them accurately and objectively, however, can better inform their decisions and better prepare them for home equity borrowing success. And, with the right use and approach, savvy homeowners may ultimately find themselves in a better financial position than when they started.