Planning for Retirement? Consider Using a Home Equity Loan
As you approach retirement, financial planning becomes more important than ever. Whether you’re considering funding future retirement expenses, purchasing a retirement home, or simply upgrading your lifestyle, tapping into your home’s equity can be a valuable resource. With a Fixed Term Home Equity Loan or a Home Equity Line of Credit (HELOC), you can leverage the value of your home to help secure a more comfortable retirement.
In this post, we’ll explore how a Home Equity Loan can support your retirement plans, the pros and cons of borrowing against your home’s value later in life, and how to make the most of this financial tool.
How Can a Home Equity Loan Support Retirement Planning?
You can use a Home Equity Loan to support your retirement goals in several smart ways. Here are some key scenarios where accessing your home’s equity can be particularly beneficial:
Covering Retirement Expenses: While pensions, savings, and Social Security provide a foundation, unexpected expenses in retirement—like healthcare costs or home repairs—can arise. A Fixed Term Home Equity Loan provides a lump sum of money that you can use to cover these expenses without dipping into your savings or retirement accounts.
People Driven Credit Union loan rates as of today:
Fixed Term Home Equity Loan Rates as Low as: 7.19% APR*
Home Equity Line of Credit Rates as Low as: 7.25% APR*
Credit Card Rates as Low as: 13.50%¹ APR*
Personal Line of Credit Rates as Low as: 13.70%¹ APR*
Purchasing a Retirement Home: If you’re considering adding a property or dream retirement location, using your current home’s equity can help you finance the purchase of a retirement property. A home equity loan secured with your current home is only valid while you own your current home. With competitive interest rates, a Fixed Term Home Equity Loan is often more cost-effective than other forms of borrowing.
People Driven Credit Union loan rates as of today:
Fixed Term Home Equity Loan Rates as Low as: 7.19% APR*
Unsecured Personal Loan Rates as Low as: 10.74%¹ APR*
RVs, ATVs, Motorcycles, Boats, Classic Cars & Golf Carts: If you’re considering exploring the open road or taking up fun hobbies, using your home’s equity can help you finance the purchase of a recreational vehicle. With competitive interest rates, a Fixed Term Home Equity Loan is often more cost-effective than other forms of borrowing.
People Driven Credit Union loan rates as of today:
Fixed Term Home Equity Loan Rates as Low as: 7.19% APR*
Home Equity Line of Credit Rates as Low as: 7.25% APR*
Recreational Vehicle Loan Rates as Low as: 7.44%¹ APR*
Classic Car Auto Loan Rates as Low as: 7.94%¹ APR*
Home Upgrades for Retirement: Aging in place is becoming popular for many retirees. Whether installing a stairlift, remodeling your bathroom for accessibility, or upgrading your home’s energy efficiency, tapping into your equity can help fund these improvements, allowing you to live comfortably in your home for years.
People Driven Credit Union loan rates as of today:
Fixed Term Home Equity Loan Rates as Low as: 7.19% APR*
Home Equity Line of Credit Rates as Low as: 7.25% APR*
Unsecured Personal Loan Rates as Low as: 10.74%¹ APR*
Credit Card Rates as Low as: 13.50%¹ APR*
Supplementing Your Retirement Income: Some retirees use a Home Equity Loan to generate additional cash flow. By converting some of your home’s equity into accessible funds, you can create a financial cushion to maintain your lifestyle during retirement.
People Driven Credit Union loan rates as of today:
Fixed Term Home Equity Loan Rates as Low as: 7.19% APR*
Home Equity Line of Credit Rates as Low as: 7.25% APR*
Credit Card Rates as Low as: 13.50%¹ APR*
Personal Line of Credit Rates as Low as: 13.70%¹ APR*
Pros of Using a Home Equity Loan in Retirement
There are several advantages to using a Home Equity Loan to fund your retirement needs:
Lower Interest Rates: Home Equity Loans typically offer lower interest rates than other loans or credit cards. This makes them an attractive option for retirees looking to borrow money at an affordable rate.
Fixed Monthly Payments: With a Fixed Term Home Equity Loan, you’ll have predictable monthly payments, making it easier to manage your retirement budget. The fixed interest rate ensures that your payments won’t increase over time.
Tax Deductible Interest: In many cases, the interest on a Home Equity Loan may be tax-deductible if the funds are used for home improvements. Consult a tax professional to see how this benefit applies to your situation.
Access to Large Sums of Money: For retirees needing a large amount of money—whether for a home purchase, a major medical expense, or another big-ticket item—a Fixed-Term Home Equity Loan offers access to substantial funds at once.
Cons of Using a Home Equity Loan in Retirement
While Home Equity Loans offer a range of benefits, there are also some potential downsides to consider:
Risk of Foreclosure: Borrowing against your home’s equity means your home is being used as collateral. If you’re unable to make payments, your home could be at risk of foreclosure. Ensuring that the loan fits comfortably within your retirement budget is essential.
Reducing Your Estate: Borrowing against your home decreases the equity available for your heirs. If leaving your home as part of your legacy is important, this is something to consider.
Repayment Obligation: Even in retirement, you’ll need to maintain regular loan payments. If you live on a fixed income, plan to handle the monthly payments without stressing your finances.
Is Borrowing Against Your Home’s Equity Right for You?
Using your home’s equity can be a smart financial move in retirement, but it’s not for everyone. Here are some factors to consider before taking the plunge:
Do you have a clear plan for using the funds? Make sure you have a specific purpose for the loan, whether it is for a home purchase, renovations, or retirement expenses.
Can you comfortably afford the monthly payments? Ensure the loan payments fit within your retirement budget without causing financial strain.
What other financial resources do you have? If you have other savings or investments to draw on, you may not need to tap into your home’s equity. However, a home equity loan can provide flexibility for many retirees.
Explore Your Home Equity Loan Options with People Driven Credit Union
If you’re planning for retirement and considering how your home’s equity could support your goals, People Driven Credit Union is here to help. Our team of loan specialists can walk you through the process, explain the different types of loans available, and help you determine the best solution for your retirement plans.
Contact us today to schedule a free consultation and learn how a Home Equity Loan could be the key to a secure and comfortable retirement.
Spring into Savings!
No-Fee Home Equity Loan Promotion
March 19, 2025 through April 30, 2025
- No Fees on Fixed Term Home Equity Loans and Home Equity Lines of Credit -
For eligible new home equity loans.
Disclosures:
¹Special Loan Rate Discount: Benefit from a 0.25% reduction when enrolling in our AutoPay service and is included in the “as low as” rate advertised. The discount is available to those with Direct Deposit of payroll, social security, or retirement and AutoPay setup from a People Driven Credit Union checking or savings account.
*APR = Annual Percentage Rate: The actual APR and loan term is subject to approval and may be determined upon the borrower’s creditworthiness, the amount borrowed, and the type, value, age, and condition of the collateral offered to secure the loan (when applicable). Rates are effective as of today and are subject to change.
People Driven Credit Union savings are Federally insured to at least $250,000 by the NCUA and backed by the full faith and credit of the United States Government. APR = Annual Percentage Rate. Rates effective as of today and may change at any time. Penalties apply for early withdrawal. View our Privacy Policy and read our disclaimer regarding links to other sites.
