Home Equity Loan Rates from Wachovia Bank

The Savings Investor has been tracking home equity loan rates closely following the decrease in short term interest rates by the Fed. And while national averages are down as expected, we are taking a look at how fixed-rate home equity loan rates have fared. We have used a sample borrower who has a $400,000 house and is borrowing $60,000 which will still keep them with a loan-to-value ratio of below 80%. The current rates quoted from Wachovia Bank on a fixed-rate home equity loan are listed below:

Fixed Rate Home Equity Loan - 30 year Term, $60,000 loan, $600 origination fees

Excellent credit: 8.79% rate / 8.90% APR
Good credit: 9.04% rate / 9.16% APR
Fair credit: 9.39% rate / 9.51% APR

Fixed Rate Home Equity Loan - 15 year Term, $60,000 loan, $600 origination fee

Excellent credit: 8.19% rate / 8.36% APR
Good credit: 8.44% rate / 8.61% APR
Fair credit: 8.79% rate / 8.97% APR

Fixed Rate Home Equity Loan - 5 year Term, $60,000 loan, $600 origination fee

Excellent credit: 7.79% rate / 8.23% APR
Good credit: 8.04% rate / 8.48% APR
Fair credit: 8.39% rate / 8.83% APR

CONCLUSION - These rates do not seem as good as we might have expected. Why? Mainly because fixed-rate loans have rates which are influenced more directly by Treasury yields than the level of the federal funds rate. Treasury yields for terms from 5 years to 30 years have increased over the last week increasing these yields as well. Lenders have also tightened up their standard following the sub-prime debacle and “easy money” is harder to find. Despite these less than excellent rates (based on recent memory), a fixed-rate home equity loan rates may be safer in the longer term than the variable variety which can turn quickly.

Run home equity loan quotes from lenders in your area here