fixed or variable rate home equity 2.5% difference?
April 21, 2010 by
Filed under home equity rates
I have a fixed rate home equity line of credit on 64,000. With the lower rate on variable. Is it worth switching over? The fixed rate is at 7.3% and the variable rate is at 4.8%. I would save around $133 a month. I would apply the savings to the principal. Or is there any way to get a lower fixed rate?
You can try, but banks aren’t lending and if the value of your home dropped significantly, no bank may touch it.
As for fixed vs. variable. Due to the upcoming huge devaluation of the dollar and inflation (it is coming) are going to force the feds to start raising rates.
Within a couple years, I think we will see interest above 5%. Which would shoot your variable up past 7.3%.
Instead of trying to refinance again, why don’t you just try cutting back every where else and paying down the debt faster. That will mean extra savings sooner.
Or, there is always the old fashioned way of taking another job, extra shift to earn the extra money. You are only talking about a hundred bucks. I can make that in one weekend a month.
Good luck
if you are going to refi. the line of credit try to get a lower fixed rate.that way you save on the interest with out gambling on future interest rate changes. they are low right now but will be climbing back up. and you be hurt by that later if you use the adjustable rate