How much will a $20,000 home equity loan cost per month in 2025?

Whether you’re a homeowner preparing for spring renovation home projects, looking to pay off high-rate debt or simply need some extra funding right now, a home equity loan could be the smart way to secure it. With interest rates many percentage points lower than personal loans and an average rate of 8.40% that makes it almost three times cheaper than a credit card now, a home equity loan may be your most affordable way to borrow a large, five- or six-figure sum. And with the average home equity amount up 6% year over year to $313,000, there’s likely plenty to utilize, no matter what your end goal is.

Before getting started, however, it’s always important to first calculate your potential costs, even if you’re just borrowing a relatively small amount, like $20,000. Fortunately, since home equity loan rates are fixed, this is quick and easy to do, allowing you to move on to the next step in the application process. Below, we’ll do the math.

See how much home equity you’d be eligible to borrow here now.

How much will a $20,000 home equity loan cost per month in 2025?

Some home equity lenders may not offer loans for as little as $20,000 (they may prefer $35,000 or higher, according to Experian), while others may approve a loan for as little as $10,000. Still, if you shop around for lenders, you’ll likely be able to find one offering a $20,000 home equity loan. And here’s what those monthly repayments will look like when you do, tied to two common repayment periods:

• 10-year home equity loan at 8.53%: $248.29 per month
• 15-year home equity loan at 8.48%: $196.71 per month

While both of these rates are higher than the overall average of 8.40%, it can be helpful to know what those monthly payments would look like, too:

• 10-year home equity loan at 8.40%: $246.90 per month
• 15-year home equity loan at 8.40%: $195.78 per month

Not only are these payments affordable now, but borrowers can also secure peace of mind by knowing that these repayments will remain the same over the full repayment period. Unlike home equity lines of credit (HELOCs) and credit cards, both of which have variable interest rates subject to change based on market conditions, home equity loan rates will remain the same as they were when the loan was approved. And, if rates drop materially in the long term, homeowners can simply refinance their current home equity loan into the new, lower interest rate at that point.

Learn more about your current home equity loan options here.

What about a $20,000 personal loan?

While a personal loan lender won’t require your home as collateral, the difference may not be worthwhile, particularly when viewed through the prism of monthly repayment costs. Here’s what the same amount of money borrowed would cost each month with a personal loan, spread over identical repayment period:

• 10-year personal loan at 12.37%: $291.24 per month 
• 15-year personal loan at 12.37%: $244.81 per month

When compared to a home equity loan, at any of the above rates, a personal loan becomes more expensive. For a 10-year personal loan, borrowers will pay over $40 more per month, and with a 15-year personal loan, they’ll pay close to $50 extra. So, if you’re comfortable using your home as collateral and want to keep monthly costs limited, a home equity loan may be the better option.

The bottom line

If you need to borrow $20,000 right now, a home equity loan is one of the most affordable ways to do so. With lower rates than most alternatives, a fixed rate that borrowers won’t need to worry about changing and tax benefits worth exploring that alternative credit options don’t have, now could be the smart time to start shopping for rates and lenders.

Get started with a home equity loan online today.

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Stephen Collopy

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