Home Equity Loan Rates in Alabama (November 2024)

The equity in your home that you can access and borrow is known as tappable equity. A home equity loan (HEL) can help you maximize your home equity, whether you're looking to fund home improvement projects or consolidate debt.

Alabama's home equity loan rates are above national averages — 8.2% APR for a 10-year term (7.7% nationally) and 8.3% APR for a 15-year term (7.9% nationally). We've compiled detailed insights on current home equity loan rates in Alabama, including city-specific rates, top lenders and tips on securing the best rates for using your home's equity.

The current average APR for a 15-year home equity loan in Alabama is 8.3%, but several factors might affect what lenders offer. For instance, a higher credit score often results in a lower APR, while a larger loan amount could lead to a higher rate. Repayment terms also play a role in determining your rate. Check out the table below to compare the average APRs of home equity loans in Alabama across different loan terms.

Interest rates for a home equity loan change daily. Keeping track of these rates can help you pay less in interest over the life of your loan, saving you money. If you have high-interest debts, a home equity loan at a lower rate can help you consolidate those debts and reduce your overall interest payments.

For example, a 15-year home equity loan with an 8.4% APR has a monthly payment of $489 and results in a total interest of $38,100. In comparison, a 10-year loan with an 8.2% APR requires a monthly payment of $612 and results in a total interest of $23,432.

The rate you qualify for depends on your loan-to-value ratio, which is how much you owe on your mortgage compared to your home's appraised value. To calculate your LTV ratio, divide your current mortgage balance by your home's appraised value and multiply by 100. For example, if your home is valued at $300,000 and you owe $240,000 on your mortgage, your LTV ratio is 80%.

A higher LTV ratio means greater potential risk to lenders, resulting in higher rates. Currently, the average APR of a 15-year equity loan in Alabama with an LTV ratio of 80% is 8.2%. It's 8.5% for an LTV ratio of 90%. Use the table to see what rates you might qualify for based on your LTV ratio.

Average APRs vary between cities in Alabama. Cities with higher home values often have lower rates because lenders view these loans as less risky. Additionally, cities with higher living costs may experience slightly higher rates due to increased operational expenses for lenders.

In Alabama, Woodstock has an average APR of 6%, while Midfield has an average APR of 10.5%. Below is a table showing the cities in Alabama and their average APRs for home equity loans with different terms.

Home equity loan rates in Alabama differ significantly among lenders due to varying policies and market strategies. For instance, West Alabama Bank & Trust offers the lowest average APR at 6%, while PNC Bank has the highest at 9.9%. It's crucial to compare rates and terms from different lenders to find the best possible home equity loan rates.

Explore the interactive table below to see which lenders offer the lowest home equity loan rates in your city.

Getting the best possible home equity interest rates can transform your borrowing experience by lowering monthly payments and reducing overall costs, allowing you to allocate funds to other financial goals. To secure the best home equity loan rates in Alabama, consider these strategies:

MoneyGeek addresses common questions about home equity loan rates in Alabama, offering clear and factual insights to homeowners.