How much does a $20,000 home equity loan cost per month after the Fed’s October rate cut?

If you need to borrow $20,000 in today’s economy, most of your options aren’t great. 

You can explore personal loans, although those come with interest rates over 12% now. Or you can ask for a credit card limit increase, although rates there are hovering around 20% now (and there’s no guarantee that you’ll be approved). If you’re a homeowner with a relatively low mortgage rate, cash-out refinancing is now off the table as it will require the exchange of that rate for one of today’s higher mortgage interest rates.

But what about borrowing it with a home equity loan? This unique borrowing product won’t require the alteration of your current mortgage loan terms. And it won’t require you to pay excessive interest rate costs the way you would with a personal loan or credit card. With the average home equity amount worth hundreds of thousands of dollars now, borrowing just $20,000 often means a quick approval process, too. 

After the Federal Reserve issued two interest rate cuts in the last two months, rates here are also lower than they’ve been. Before getting started, though, it helps to calculate the potential costs of a home equity loan of this size so that borrowers know exactly what to expect. So, how much does a $20,000 home equity loan cost per month after the Fed’s October rate cut? That’s what we’ll break down below.

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

How much does a $20,000 home equity loan cost per month after the Fed’s October rate cut?

Home equity loans have fixed interest rates that make calculating future repayments simple and accurate. Here’s how much a $20,000 home equity loan will cost per month now, post-October Fed rate cut, calculated against today’s average rates and two common repayment periods:

• 10-year home equity loan at 8.17%: $244.46 per month
• 15-year home equity loan at 8.13%: $192.63 per month

For reference, here’s what a home equity loan of this size cost in September, following a Fed rate cut that month:

• 10-year home equity loan at 8.34%: $246.26 per month
• 15-year home equity loan at 8.21%: $193.56 per month

And here’s how much more expensive it was in March, before any 2025 Fed rate cuts had been issued:

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

Home equity loan rates, then, are down by more than 25 basis points per month compared to what they were earlier this year. That equates to a few dollars cheaper each month for each loan term and while the monthly payment differential isn’t stark, it does put more money back in your pocket compared to what you would have had if you secured the loan at a different point in 2025. 

And those savings will add up over time, particularly over a 10- or 15-year repayment period. It’s also important to note that all of the above rates are just averages. So, if you have a good credit score, low debt-to-income ratio and sizable equity source to work with, you may be able to secure an even lower rate.

See how low your current home equity loan rate offers are here.

The bottom line

A $20,000 home equity loan comes with monthly payments between about $193 and $244 now, following an October Fed rate cut. That makes this one of the safer and more affordable ways to borrow $20,000 in today’s economy. And if the Fed cuts rates further and rates here decline accordingly, homeowners can always look to refinance their home equity loan at that point. In the interim, they’ll secure a five-figure loan to use as needed right now.