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Interest rate cuts are finally coming again … but is it too late?
That’s the question some Americans find themselves confronting now as the chances of a rate cut courtesy of the Federal Reserve currently hang around 90%. While a cut is generally better than a pause or, worse, a rate hike, many may be wondering how many cuts they actually need to regain their financial independence. And a 25 basis point reduction when the central bank concludes its next meeting on September 17 is unlikely to offer much relief.
This is unfortunate for seniors, particularly those looking to leverage the home equity they’ve built up over the years. A minor drop in the federal funds rate, after all, will have a muted impact on the mortgage market, meaning attractive mortgage refinancing and cash-out refinance options will be delayed even further.
But that doesn’t mean that they can’t still borrow from their home equity. And, right now, there’s a lot to borrow with home equity levels just hitting another record high. So, how can seniors, specifically, borrow this money without having to refinance and sacrifice their current mortgage rate? There are actually three primary ways to do so, one of which is only available for adults age 62 and older. Below, we’ll break down what to know now.
Start by checking your reverse mortgage eligibility here today.
How seniors can borrow home equity without refinancing now
Here are three effective ways in which seniors can borrow from their home equity without having to refinance and give up their existing, presumably lower mortgage rate:
Reverse mortgages
This option is specifically reserved for senior homeowners, but if you meet the age requirements and some other eligibility criteria, it could be the optimal way to borrow home equity right now. That’s because, unlike alternatives, monthly payments – and concerns over interest rates and budgeting – will not be required. Instead, seniors can transform their equity into monthly payments back to them, either via a lump sum of money or a revolving credit line. The reverse mortgage funds will only need to be repaid if the homeowner dies, moves out of the home or if the home that’s being borrowed from is sold, making this one of the simplest and least stressful ways to utilize your equity in today’s unpredictable economy.
Compare your top reverse mortgage options here to learn more.
Home equity loans
Home equity loan interest rates have been consistently declining in recent weeks, and they hit their lowest point in 2025 just this past week. At an average interest rate of just 8.22% right now, home equity loans aren’t just one of the cheaper ways to borrow equity. They’re one of the cheapest ways to borrow money overall right now. With rates on personal loans over 11% currently and credit card rates nearly three times higher than home equity loan rates, homeowners with equity to leverage may be best served by borrowing from it with a home equity loan. Additionally, rates here are fixed, adding a layer of protection for seniors nervous about market changes ahead.
Learn more about your home equity loan options here.
Home equity lines of credit (HELOCs)
Know you want to borrow from your home equity but aren’t sure how much you’ll ultimately need? Then a HELOC could be the option for you. Not only will it keep your existing mortgage rate and terms intact, but payments here will only be required on the interest during the draw period. That means you’ll start with relatively low payments, considering that rates here are averaging even lower than home equity loans right now.
And, if you ultimately only use a small portion of your credit or decide not to act at all, don’t worry. Payments will only be required on the line of credit utilized – not the full amount you’ve been approved for. Just understand that HELOCs have variable rates responsive to market conditions, making long-term budgeting particularly difficult and, potentially, cost-prohibitive if rates climb again in the future.
The bottom line
There are multiple ways seniors can tap into their home equity now without having to impact their existing mortgage rate. Whether you choose a reverse mortgage, home equity loan or HELOC, however, be sure to weigh your goals and budget carefully. Since this money is coming out of your most prized financial asset (regardless of how it’s ultimately withdrawn), it’s critical to weigh the pros and cons carefully before formally applying for the funds.
