Drawing on a Home Equity Line of Credit

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By Going2Oahu

Equity Line of Credit in a Variable Interest Rate Environment

Drawing on a home equity line of credit can be particularly cost effective in a market that is characterized by rising interest rates. The home equity credit lines are typically variable interest rate products rather than fixed interest rate products, and the variable rates are usually guided by government indexes like the US Treasury bill rate. The interest rate that lenders publish in their sales material reflects this variable value of the index plus a margin of a few percentage points.


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