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.
Rhode Island's home equity loan rates are below national averages — 7.3% APR for a 10-year term (7.7% nationally) and 7.5% APR for a 15-year term (7.9% nationally). We've compiled detailed insights on current home equity loan rates in Rhode Island, including city-specific rates, top lenders and tips on securing the best rates for using your home's equity.
Home Equity Loan Rates in Rhode Island (November 2024)
The current home equity loan rates in Rhode Island for 10-year loans are 7.3%, compared to 7.7% nationally. For 15-year loans, the average rate is 7.5%, whereas the national rate is 7.9%.
Updated: December 11, 2024
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Key Takeaways
Higher LTV ratios lead to higher rates. The average APR for a 15-year HEL in Rhode Island with an 80% LTV is 7.4%, compared to 7.7% for a 90% LTV.
HEL rates vary by city in Rhode Island. For example, for 15-year loans, South Kingstown has an average APR of 6.8%, whereas North Providence's is 7.9%.
Different lenders offer varying rates for the same loan types. Chartway Federal Credit Union's average APR is 6.5%, whereas TD Bank's is 8.2%.
MoneyGeek examined 15 different banks and credit unions in Rhode Island using S&P Global's SNL Depository Rates dataset to stay current on the latest home equity loan rates.
This data is accurate as of November 2024.
Current Home Equity Loan Rates in Rhode Island
The current average APR for a 15-year home equity loan in Rhode Island is 7.5%, but several factors might affect what lenders offer. For instance, having a higher credit score can secure a lower APR, while a larger loan amount might increase the 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 Rhode Island across different loan terms.
10Year | 7.3% |
15Year | 7.5% |
5Year | 7.1% |
Interest rates for a home equity loan change daily. Keeping an eye on these rates can save you money by reducing the interest paid over the life of the loan. If you have high-interest debts, a home equity loan with a lower rate can help consolidate those debts, lowering your overall interest payments.
For example, a 15-year home equity loan with a 7.5% APR results in a monthly payment of $464 and a total interest of $33,431. In comparison, a 10-year loan with a 7.4% APR has a monthly payment of $591 and a total interest of $20,908.
Home equity loans and HELOCs are popular options for homeowners. Home equity loans and home equity lines of credit (HELOC) allow homeowners to tap into their home's equity.
Home equity loans have fixed rates, averaging 7.4%, while HELOC rates in Rhode Island are variable, averaging 8.3%. Fixed rates mean predictable monthly payments, which can aid in budgeting. Variable rates, like those of HELOCs, can start lower but may increase, leading to higher payments over time.
Home Equity Loan Rates by LTV Ratio
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 Rhode Island with an LTV ratio of 80% is 7.4%. It's 7.7% for an LTV ratio of 90%. Use the table to see what rates you might qualify for based on your LTV ratio.
7.4% | 7.7% |
Home Equity Loan Rates by City in Rhode Island
Average APRs also vary between cities in Rhode Island. In larger or more densely populated cities, more lenders compete, which can lead to lower interest rates. Additionally, cities with higher living costs may see slightly higher rates, as lenders face increased operational expenses.
In Rhode Island, South Kingstown has an average APR of 6.8%, while Barrington has an average APR of 7.7%. Below is a table showing the cities in Rhode Island and their average home equity loan rates for different terms.
10Year | 7.5% |
15Year | 7.6% |
5Year | 7.3% |
Home Equity Loan Lenders in Rhode Island
Home equity loan rates in Rhode Island can differ widely among lenders due to varying policies and market strategies. For instance, Chartway Federal Credit Union offers the lowest average APR at 6.5%, while TD Bank has the highest at 8.2%.
Comparing rates and terms from different lenders is essential to securing the lowest home equity loan rates. Explore the interactive table below to see which lenders offer the most competitive rates in your city.
Bristol County Savings Bank | 7.0% |
Webster Bank, N.A. | 7.3% |
BankNewport | 7.4% |
Coastal1 Credit Union | 7.4% |
The Washington Trust Company of Westerly | 7.4% |
Navigant Credit Union | 7.4% |
Bank Rhode Island | 7.8% |
TD Bank | 8.2% |
Considering credit unions for your home equity loan rates in Rhode Island can be advantageous. While commercial banks offer an average APR of 7.5%, credit unions provide a slightly lower rate of 7.2%. Keep in mind that credit unions may have stricter membership requirements, but they often offer more competitive rates.
How to Get the Best Home Equity Loan Rate in Rhode Island
Getting the best possible home equity interest rates can lead to lower monthly payments and reduced overall borrowing costs, enhancing your financial flexibility. Imagine saving hundreds annually by securing a favorable rate. To achieve the best home equity loan rates in Rhode Island, consider these strategies:
Compare lenders
Lenders may offer different APRs for the same loan amount and credit profile. For instance, Peoples Credit Union advertises an average APR of 6.7%, while Merrimack Valley Credit Union offers 7.9%. Comparing different home equity loan lenders in Rhode Island can help you find better rates.
Increase your home's equity
Having more equity in your home can result in more competitive rates from lenders. Rhode Island homeowners can increase their home's equity by bathroom upgrades or kitchen remodels.
Improve your credit score
Improve your credit score to secure better home equity loan rates. Pay bills on time and reduce credit card debt. The average credit score in Rhode Island is 722, according to Experian.
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.
Debt-to-Income Ratio Calculator
Provide your income and recurring payments to calculate your DTI.
Monthly Income Before Taxes
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FAQ About Home Equity Loan Rates in Rhode Island
MoneyGeek provides Rhode Island homeowners with clear answers to common questions about home equity loan rates. Our information is precise and reliable, ensuring you have the facts needed to understand your options. By addressing your concerns, MoneyGeek simplifies the complexities of home equity loans, making it easier for you to navigate the financial landscape.
What is the interest rate on a home equity loan in Rhode Island?
As of November 2024, the average APRs for home equity loans in Rhode Island are 7.2% for 5-year, 7.3% for 10-year, and 7.5% for 15-year terms. Your credit score and other factors will influence the rate you qualify for.
How do you calculate your home equity in Rhode Island?
To calculate your home equity, subtract your outstanding mortgage balance from your property's current market value. Understanding home equity requirements can help in this process.
Do home equity loan rates vary between cities in Rhode Island?
Yes, rates vary by city. For example, South Kingstown has an average APR of 6.8%, while Barrington's is 7.7%.
Does a home equity loan in Rhode Island have tax benefits?
Interest on a home equity loan may be tax-deductible if the funds are used for home improvements. Consult a tax advisor for specifics.
What are possible drawbacks of securing a home equity loan in Rhode Island?
Drawbacks include the risk of foreclosure if you default and potential changes in interest rates. Additionally, fees and closing costs can add up.
How long does it take to get a home equity loan in Rhode Island?
The process typically takes two to six weeks, depending on the lender and the complexity of your application.
How do you get a home equity loan in Rhode Island?
Check your eligibility for a home equity loan and ensure you meet the credit score requirements. Then, compare lenders and apply.
What can I use my funds for? Are there any home equity loan use restrictions in Rhode Island?
Funds can be used for various purposes, including home improvements, debt consolidation, or education expenses. Restrictions may apply depending on the lender's terms.
Can you only take out a home equity loan in Rhode Island on your primary residence?
You can apply for a home equity loan on primary residences, second homes, or investment properties, but terms may vary. Consider a cash-out refinance for other property types.
What other home equity products can you consider if you want to tap into your home's equity in Rhode Island?
Consider a HELOC or a cash-out refinance as alternative options. Each type of loan offers different benefits and terms.
What's the difference between a HELOC and a home equity loan?
A HELOC offers a variable rate and a draw period with an annual fee, while a home equity loan provides a lump sum with fixed interest rates. Choose based on your financial needs.
About Zachary Romeo, CBCA
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.
sources
- Experian. "What Is the Average Credit Score in the U.S.?." Accessed December 11, 2024.
- TransUnion. "Home Equity Trends Report — Q4 2023." Accessed December 11, 2024.