Is a $150,000 home equity loan worth it?

Whether planning to borrow a few hundred dollars or tens of thousands, you should always go into the process focused and realistic. This is particularly true when borrowing money from certain sources, like your home. It can be a painstaking process to pay down your mortgage balance and it can take decades to do so effectively. So borrowing from your accumulated home equity should be done strategically and judiciously. You don’t want to just borrow a large, six-figure sum without first doing your research and calculations. 

Currently, the average homeowner has around $320,000 worth of equity to utilize. So a home equity loan for $150,000 would still leave more than half of that amount to potentially use in the future. But in today’s unusual economic climate in which inflation is rising again and interest rate relief appears delayed, is a $150,000 home equity loan worth opening? Below, we’ll explain why it can still be for some homeowners.

Start by seeing how much home equity you could borrow here.

Is a $150,000 home equity loan worth it?

A $150,000 home equity loan could be a useful tool for homeowners, particularly in the economic atmosphere of early 2025. Here are three reasons why it could be worth opening now:

It has a lower interest rate than many alternatives

If you’re borrowing a large amount of money then repaying it takes on vital significance. And the only way that can be done effectively is by securing the lowest interest rate around. Fortunately, home equity loans, thanks to the home serving as collateral, come with interest rates of around 8.40% now. That makes it almost three times cheaper than credit cards (hovering around 23% currently) and approximately five points lower than personal loans (around 12.40% now). This makes home equity loans one of the cheaper ways to borrow $150,000 now. 

See what home equity loan interest rate you’d qualify for here.

It’s easier to budget for

Another big selling point for home equity loans compared to some alternatives? A fixed interest rate. This makes budgeting for a big loan amount much easier than it would be with a credit card, which has a variable rate likely to increase monthly this year, and a home equity line of credit (HELOC), which has slightly lower rates that are subject to also change monthly. By locking in a rate on a $150,000 home equity loan, borrowers will know what their exact repayments will be each month and year. And if rates drop by a material degree later over the life of the loan, they can simply refinance to the new, better rate then.

It has tax benefits other options do not

If you’re borrowing $150,000 worth of home equity, there’s a good chance that you’re planning to use it to fix up your current home. And that’s a smart way to approach it since home equity loans come with tax benefits if the funds are used for IRS-eligible home repairs and renovations. So if you’re installing or renovating a new bathroom or kitchen, you may be able to deduct the interest paid on the loan when you file your tax return for the year in which the loan was used. This reduces your tax bill and lessens concerns over today’s home equity loan rates, putting money back into your pocket in a way that a personal loan or credit card simply cannot. 

The bottom line

The decision to borrow $150,000 from your home equity should not be made hastily. It likely took a long time to accumulate that much equity and borrowing from it should be approached carefully, especially now. But with interest rates lower than most other borrowing options, a fixed rate that makes budgeting for the loan precise and tax advantages that credit cards, personal loans and other products don’t have, this is likely one of the better ways to borrow $150,000 now. Just be sure to calculate your repayment costs accurately as you could lose your home to the lender if you fail to repay all that you’ve borrowed.