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Most HELs are fixed-rate loans. If you have one, you're insulated from a Fed rate hike.But if you're shopping for one, expect higher rates. That's because a home-equity loan rate is broadly tied to the lender's own cost of funds. A Fed hike means the lender's cost of borrowing from other banks will go up.
"If it costs them more, it'll cost you more," said Keith Gumbinger, vice president of mortgage information provider HSH Associates.
But maybe not that much more.
Lenders have been pricing in the possibility of rate hikes for the past few months. In April, you could have gotten a 15-year, $30,000 HEL at 6.75 percent for $265.47 a month. Today, you'd get a 7.12 percent rate and pay an additional $6.19 a month.
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