Home Equity Loan Rates in Iowa

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.

Iowa's home equity loan rates match the national averages — 7.7% APR for a 10-year term and 7.9% APR for a 15-year term. We've compiled detailed insights on current home equity loan rates in Iowa, 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 Iowa with an 80% LTV is 7.8%, compared to 8.1% for a 90% LTV.

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HEL rates vary by city in Iowa. For example, for 15-year loans, Laurens has an average APR of 6.9%, whereas Decorah's is 9.8%.

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Different lenders offer varying rates for the same loan types. Financial Plus Credit Union's average APR is 5.5%, whereas North Star Community Credit Union's is 10.2%.

MoneyGeek examined 58 different banks and credit unions in Iowa 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 November 2024.

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Current Home Equity Loan Rates in Iowa

The current average APR for a 15-year home equity loan in Iowa is 7.9%, though several factors may influence what lenders offer. For instance, a higher credit score can result in a lower APR, while a larger loan amount might increase your rate. Repayment terms also play a role. Check out the table below to compare the average APRs for home equity loans in Iowa across different loan terms.

10Year7.7%
15Year7.9%
5Year7.5%

Interest rates for home equity loans change daily. Keeping track of these rates can help you save money by paying less in interest over the life of the loan. It also allows you to plan your budget and future expenses more accurately, ensuring you borrow within your means.

For example, a $50,000 home equity loan in Iowa on a 15-year term results in a monthly payment of $475 and a total interest of $35,490 if the APR is 7.9%. In contrast, a 10-year loan with a 7.7% APR has a monthly payment of $599 and a total interest of $21,849. Monitoring current rates can help you make informed decisions about the best loan term for your financial situation.

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HOME EQUITY LOANS VS. HELOCS IN IOWA

Home equity loans and home equity lines of credit (HELOC) are popular options for homeowners to tap into their home's equity. Home equity loans have fixed rates, averaging 7.7%, while HELOC rates in Iowa are variable, averaging 8.3%. Home equity loans' fixed rates provide stability, whereas HELOCs' variable rates can fluctuate.

Fixed-rate loans mean your payments remain consistent, offering predictability in budgeting. In contrast, variable rates, such as those with HELOCs, can start lower but may increase, leading to higher payments over time. Understanding the differences between home equity loans and HELOCs is crucial for managing your finances effectively.

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 means greater potential risk to lenders, resulting in higher rates. In Iowa, the average APR for a 15-year equity loan with an 80% LTV ratio is 7.8%, compared to 8.1% for a 90% LTV ratio. Review the table below to see what rates you might qualify for based on your LTV ratio.

Data filtered by:Results filtered by:
Repayment Terms:
Repayment Terms:15Year
7.8%8.1%

Home Equity Loan Rates by City in Iowa

Average APRs also vary between cities in Iowa. In larger or more densely populated cities, more lenders compete, which can lead to lower interest rates. Additionally, differences in property taxes or local fees can influence rates, affecting overall borrowing costs.

In Iowa, Tabor has an average APR of 6.3%, while Ida Grove has an average APR of 10.2%. The following table shows the average home equity loan rates across Iowa cities with different terms.

Data filtered by:Results filtered by:
City:
City:Des Moines
10Year7.3%
15Year7.6%
5Year7.0%

Home Equity Loan Lenders in Iowa

Home equity loan rates in Iowa can differ significantly between lenders due to varying policies and market strategies. For instance, Financial Plus Credit Union offers the lowest average APR at 5.5%, while North Star Community Credit Union has the highest at 10.2%.

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

Data filtered by:Results filtered by:
City:
City:Des Moines
U.S. Bank National Association9.1%
BMO BANK NATIONAL ASSOCIATION8.4%
Collins Community Credit Union7.8%
Affinity Credit Union7.5%
Veridian Credit Union7.5%
Community State Bank7.3%
Greater Iowa Credit Union7.0%
Journey Credit Union6.7%
Financial Plus Credit Union5.5%
Community Choice Credit Union
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COMPARING HOME EQUITY LOAN RATES: BANKS VS. CREDIT UNIONS

Including credit unions in your lender options can be beneficial due to their competitive rates. Commercial banks and credit unions offer an average APR of 8.0%, which can impact home equity loan rates in Iowa. Credit unions often provide lower rates but may have stricter membership requirements. Consider these factors when evaluating your loan options.

How to Get the Best Home Equity Loan Rate in Iowa

Getting the best home equity interest rates can significantly enhance your borrowing experience by lowering monthly payments and overall costs. Imagine using these savings to fund a home renovation or pay off other debts. To secure the best home equity loan rates in Iowa, consider these strategies:

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    Compare lenders

    Lenders may offer different APRs for the same loan amount and credit profile. For instance, First Class Community Credit Union advertises an average APR of 6.0%, while Veridian Credit Union offers 7.5%. Comparing different home equity loan lenders in Iowa 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. Iowa homeowners can increase their home's equity by installing energy-efficient windows or finishing basements.

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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. The average credit score in Iowa is 730, according to Experian.

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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

Provide your income and recurring payments to calculate your DTI.

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FAQ About Home Equity Loan Rates in Iowa

MoneyGeek addresses common homeowner questions about home equity loan rates in Iowa, offering clear and reliable information. Iowa residents can better understand their home financing choices by focusing on factors like lender options and credit scores.

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

How do you calculate your home equity in Iowa?

Do home equity loan rates vary between cities in Iowa?

Does a home equity loan in Iowa have tax benefits?

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

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

How do you get a home equity loan in Iowa?

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

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

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

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

About Zachary Romeo, CBCA


Zachary Romeo, CBCA headshot

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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