A $25,000 personal loan or credit card limit may be relatively easy to secure, but the current interest rates on these products make borrowing costly. The average personal loan interest rate is around 12% now, while the median credit card rate is 21%, just under a recent record high. Borrowing a five-figure amount with either option can be expensive, even for borrowers with good credit scores and clean credit histories.
If you’re a homeowner, however, borrowing this amount through a home equity loan makes a lot of sense in today’s economy—especially after the Federal Reserve’s recent interest rate cut in the final days of October. Home equity loan rates are averaging in the low 8% range now, making them almost three times more affordable than credit cards.
Additionally, home equity levels are robust, hitting a record high earlier this year. So borrowing a relatively small amount like $25,000—when the average homeowner has around $300,000 of home equity to leverage—is relatively simple to get approved for. Still, keep in mind that your home is used as collateral, so it’s critical to calculate repayment costs precisely to avoid jeopardizing your homeownership.
Fortunately, borrowing costs have come down this year thanks to the Fed’s rate-cut campaign. But just how much does a $25,000 home equity loan cost monthly now, after the October Fed rate cut? Let’s review the calculations.
### How Much Does a $25,000 Home Equity Loan Cost Monthly After the October Fed Rate Cut?
Calculating monthly payments on a home equity loan is straightforward because these loans come with fixed interest rates. This means your monthly payment in the first month will remain the same throughout the life of the loan, unless you refinance.
Here’s what a $25,000 home equity loan will typically cost qualified borrowers each month based on current average rates and common repayment terms:
– **10-year home equity loan at 8.20%:** $305.97 per month
– **15-year home equity loan at 8.15%:** $241.08 per month
For context, here’s what the same loan amount cost in September, just before the October rate cut:
– **10-year home equity loan at 8.43%:** $309.03 per month
– **15-year home equity loan at 8.31%:** $243.41 per month
And here’s the cost back in February, before any 2025 Fed rate cuts were issued:
– **10-year home equity loan at 8.57%:** $310.90 per month
– **15-year home equity loan at 8.52%:** $246.48 per month
While rates and monthly costs are only about $5 lower per month now compared to earlier in 2025, this downward trend is encouraging for borrowers. Over time, it adds up to approximately $60 saved per year and between $600 and $900 saved across the life of the loan.
[See how low your home equity loan rate offers are here now.]
### Is a HELOC the Better Way to Borrow Home Equity Now?
If you’re a homeowner looking for an even cheaper way to borrow home equity, a Home Equity Line of Credit (HELOC) may be worth exploring. With an average rate of just 7.82%, HELOCs are considerably more affordable than home equity loans and currently rank among the cheapest ways to borrow money overall.
Because HELOC rates are variable and can change each month with market conditions, they can be a smart way to take advantage of potential additional interest rate cuts in the future. However, the variability also means rates could rise over an extended repayment period.
When deciding between a HELOC and a home equity loan, weigh the possibility of fluctuating rates against the fixed, but slightly higher, interest rate of the home equity loan. Consider which option better suits your budget now and over the long term.
### The Bottom Line
After the October Fed rate cut, a $25,000 home equity loan will cost between $241 and $306 per month if secured today. But with another Fed meeting potentially coming in December, borrowers will need to carefully balance the benefits of locking in a fixed home equity loan rate now against the potential advantages of a variable-rate HELOC in the months ahead.
There’s no one-size-fits-all answer—so take the time to compare both options closely. Consider speaking with a home equity lender who can answer your questions and help you determine the best next steps for your situation.
https://www.cbsnews.com/news/how-much-does-25000-home-equity-loan-cost-monthly-october-2025-fed-rate-cut/