Home Equity Loan Costs Rising

Home-equity credit lines have been drifting up for the past several months and with 10-year government notes topping 5 percent last week for the first time in four years, they are likely to go still higher.

Many consumers who are struggling with the rising costs of their loans should consider other strategies that may hold down what they pay for borrowing money.

Workers with a 401(k)s often have access to low-cost cash. Most plans let owners borrow at prime rate, which is currently 7.75 percent. Another possibility is borrowing against a brokerage account. The rate varies greatly depending on the brokerage. A third possibility is borrowing against a cash-value life insurance policy. Rates are usually in the single digits.

As rates on home equity loans, often called HELOCs rise, it is prudent to consider the options.