Home Equity Loan Rates in Minnesota (January 2025)

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.

Minnesota's home equity loan rate for a 10-year term is 7.6% APR, slightly lower than the national average of 7.7%. For a 15-year term, Minnesota's rate is 7.9%, identical to the national rate. We've compiled detailed insights on current home equity loan rates in Minnesota, including city-specific rates, top lenders and tips on securing the best rates for using your home's equity.

Key Takeaways

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Higher LTV ratios lead to higher rates. The average APR for a 15-year HEL in Minnesota with an 80% LTV is 7.7%, compared to 8.2% for a 90% LTV.

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HEL rates vary by city in Minnesota. For example, for 15-year loans, Hendrum has an average APR of 6.0%, whereas Ely's is 9.6%.

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Different lenders offer varying rates for the same loan types. Minnwest Bank's average APR is 5.3%, whereas Security State Bank of Marine's is 10.5%.

MoneyGeek examined 68 different banks and credit unions in Minnesota using S&P Global's SNL Depository Rates dataset to stay current on the latest home equity loan rates.

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This data is accurate as of January 2025.

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Current Home Equity Loan Rates in Minnesota

The current average APR for a 15-year home equity loan in Minnesota is 7.9%, but several factors might affect what lenders offer. For instance, a strong credit score can lead to a lower APR, while a larger loan amount might result in a higher rate. Repayment terms also play a role in determining your rate. Compare the current home equity loan rates in Minnesota across different loan terms to find the best fit for your financial needs.

10Year7.6%
15Year7.9%
5Year7.1%

Interest rates for a home equity loan change daily. Keeping track of current rates can save you money by reducing the interest paid over the life of the loan. It also helps you plan your budget and future expenses accurately, ensuring you borrow within your means.

For example, in Minnesota, a 15-year home equity loan with a 7.9% APR results in a monthly payment of $475 and total interest of $35,490. A 10-year loan with a 7.6% APR has a monthly payment of $596 and total interest of $21,535.

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HOME EQUITY LOANS VS. HELOCS IN MINNESOTA

Home equity loans and home equity lines of credit (HELOC) are popular options for homeowners to tap into their home's equity. Home equity loan rates in Minnesota average 7.5%, while HELOC rates in Minnesota are variable, averaging 8.3%. Home equity loans have fixed rates, providing stability, whereas HELOCs have variable rates that can fluctuate.

Fixed rates mean consistent monthly payments, which can help with budgeting and financial planning. On the other hand, variable HELOC rates in Minnesota may start lower but could increase, potentially leading to higher payments over time. Understanding these differences can help you choose the right option for your financial needs.

Home Equity Loan Rates by LTV Ratio

The rate you qualify for depends on your loan-to-value ratio, which measures 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 instance, 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 presents a greater risk to lenders, leading to higher rates. In Minnesota, the average APR for a 15-year equity loan with an LTV ratio of 80% is 7.7%, while it rises to 8.3% for an LTV ratio of 90%. Use the table below to see the average home equity loan rates you might qualify for based on your LTV ratio.

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Repayment Terms:15Year
7.7%8.3%

Home Equity Loan Rates by City in Minnesota

Average APRs vary between cities in Minnesota due to several factors. Differences in property taxes or local fees can influence rates, affecting overall borrowing costs. Cities with higher living costs may see slightly higher rates, as lenders face increased operational expenses.

In Minnesota, Luverne has an average APR of 5.3%, while Ely has an average APR of 9.5%. Explore the table below to see the average home equity loan rates across cities in Minnesota for different loan terms.

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City:Minneapolis
10Year7.5%
15Year7.9%
5Year7.0%

Home Equity Loan Lenders in Minnesota

Home equity loan rates in Minnesota vary significantly between lenders, influenced by each lender's policies, risk assessments and market strategies. For instance, Minnwest Bank and Dakota Heritage Bank offer the lowest average APR at 5.3%, while Security State Bank of Marine has the highest at 10.5%.

Comparing rates and terms from different lenders is a smart approach to securing the lowest home equity loan rates. Explore the interactive table to see which lenders offer the most competitive rates in your city.

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City:Minneapolis
South Metro Federal Credit Union6.0%
Affinity Plus Federal Credit Union6.1%
TruStone Financial Credit Union7.4%
Old National Bank7.5%
First State Bank of Sauk Centre7.5%
Blaze Credit Union7.7%
Sunrise Banks7.8%
Connexus Credit Union8.3%
U.S. Bank National Association8.4%
BMO BANK NATIONAL ASSOCIATION8.4%
Baxter Credit Union8.9%
Thrivent Federal Credit Union9.0%
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COMPARING HOME EQUITY LOAN RATES: BANKS VS. CREDIT UNIONS

Consider credit unions when exploring home equity loan rates in Minnesota, as they often offer more competitive rates. Commercial banks offer an average APR of 7.7%, while credit unions provide a lower rate of 7.4%. However, keep in mind that credit unions might have stricter membership requirements.

How to Get the Best Home Equity Loan Rate in Minnesota

Getting the best possible home equity interest rates can significantly improve your borrowing experience by lowering monthly payments and total costs, allowing you to allocate funds to other financial goals. To achieve the best home equity loan rates in Minnesota, consider these strategies:

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    Compare lenders

    Lenders may offer different APRs for the same loan amount and credit profile. For instance, Dakota Heritage Bank advertises an average APR of 5.3%, while Highland Bank offers 9.5%. Comparing different home equity loan lenders in Minnesota can help you find better rates.

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    Increase your home's equity

    Having more equity in your home can result in more competitive rates from lenders. Minnesota homeowners can increase their home's equity by adding basement finishing or remodeling the kitchen.

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    Improve your credit score

    Increasing your credit score can lead to more competitive home equity loan rates. Pay bills on time and reduce credit card debt to improve your credit score. According to Equifax, the average credit score in Minnesota is 730.

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    Decrease debt-to-income ratio

    A lower debt-to-income (DTI) ratio — the percentage of your monthly income that goes toward paying debts — can lead to better rates, as lenders see you as a less risky borrower.

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Debt-to-Income Ratio Calculator

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FAQ About Home Equity Loan Rates in Minnesota

MoneyGeek answers common questions Minnesota homeowners have about home equity loan rates, offering precise and reliable insights to help you understand the nuances of home financing.

What is the interest rate on a home equity loan in Minnesota?

How do you calculate your home equity in Minnesota?

Do home equity loan rates vary between cities in Minnesota?

Does a home equity loan in Minnesota have tax benefits?

What are possible drawbacks of securing a home equity loan in Minnesota?

How long does it take to get a home equity loan in Minnesota?

How do you get a home equity loan in Minnesota?

What can I use my funds for? Are there any home equity loan use restrictions in Minnesota?

Can you only take out a home equity loan in Minnesota on your primary residence?

What other home equity products can you consider if you want to tap into your home's equity in Minnesota?

What's the difference between a HELOC and a home equity loan?

About Zachary Romeo, CBCA


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Zachary Romeo is a certified Commercial Banking and Credit Analyst (CBCA), and the Head of Loans and Banking at MoneyGeek. Previously, he led production teams for some of the largest online informational resources in higher education, with over 13 years of experience in editorial production.

Romeo has a bachelor's degree in biological engineering from Cornell University. He geeks out on minimizing personal debt and helping others do the same through people-first content.


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