Is it safe to leave a home equity loan unlocked?

I have a home equity loan for $100,000 locked at 7.25%. I decided to unlock it for $200 and relock it a a lower rate, only to discover the new rate was 7.35%. If I leave it unlocked the current rate is 5.49% (prime minus 0.51%). I had short term money in the 1980's at 18-21% and cannot afford that now. Could this happen again? Is it safe to unlock this money and leave it unlocked? Or should I stay with the current locked rate?

Getting a fixed-rate home equity loan is always a safer bet than an adjustable rate. With a very weak dollar and soaring prices, I would prefer fixed rate.

I remember the days of the Carter administration when inflation was rampant and interest rates were 18-20%. Let's hope that doesn't return.

Have you shopped around with other lenders to totally refinance the loan?

If you are a first time borrower of a home equity loan it is imperative that you have a checklist of essential questions that you need to ask each and every lender. The answers to these questions will provide a valuable reference to base your comparisons on. What’s the interest rate? Knowing this is crucial. The interest rate will determinepercentage by which the adjustable rate will change. What is the Annual Percentage Rate or APR? The APR on the home equity loan will determine the yearly payment you will need to make towards this.The higher the payment in terms of points, the lower is the interest rate.

I would think you are safe for a while. Just keep up with it. With a 100k the difference between 7.3 and 5.49 would be noticeable. I would keep it adjustable and pay down the balance as much as possible. They are lower rates to help people get loans so they spend more. I think it will be awhile before this is accomplished.