Personal loans are repaid in monthly installments over a set period called the loan term. Choosing the right personal loan term is important because it helps determine how much you’ll pay each month and the interest costs overall.
Here’s what you need to know about personal loan terms and how to choose the best one for you.
What is a common personal loan term length?
Personal loan terms are usually from two to seven years, though it varies by lender. Some lenders have one-year loans while others offer specific types of personal loans, like home improvement loans, with repayment periods of 10 years or longer.
How term length affects personal loans
The amount of time you have to pay off a personal loan affects your monthly payments and the total interest paid over the life of the loan.
A shorter-term loan has a higher monthly payment but costs less total interest, while a longer-term loan has lower monthly payments and higher interest costs.
For example, on a $10,000 loan with a 15% annual percentage rate (APR) and a three-year term, the monthly payment will be about $347 with $2,480 in total interest. That same loan with a five-year repayment term would have monthly payments of $238 and cost $4,274 in overall interest.
Use this personal loan calculator to see how different term lengths affect a loan’s monthly payment and interest costs.
Loan details
Your loan estimate
Monthly payment
$212.47
Total principal
$10,000
Total interest payments
$2,748.23
Total loan payments
$12,748.23
Payoff date
05 / 2029
Show amortization schedule
Payment date
Principal
Interest
Monthly payment
Principal balance
May 2024
$129.14
$83.33
$212.47
$9,870.86
Jun 2024
$130.21
$82.26
$212.47
$9,740.65
Jul 2024
$131.30
$81.17
$212.47
$9,609.35
Aug 2024
$132.39
$80.08
$212.47
$9,476.96
Sep 2024
$133.50
$78.97
$212.47
$9,343.46
Oct 2024
$134.61
$77.86
$212.47
$9,208.85
Nov 2024
$135.73
$76.74
$212.47
$9,073.12
Dec 2024
$136.86
$75.61
$212.47
$8,936.26
Jan 2025
$138.00
$74.47
$212.47
$8,798.26
Feb 2025
$139.15
$73.32
$212.47
$8,659.11
Mar 2025
$140.31
$72.16
$212.47
$8,518.80
Apr 2025
$141.48
$70.99
$212.47
$8,377.32
May 2025
$142.66
$69.81
$212.47
$8,234.66
Jun 2025
$143.85
$68.62
$212.47
$8,090.81
Jul 2025
$145.05
$67.42
$212.47
$7,945.76
Aug 2025
$146.26
$66.21
$212.47
$7,799.51
Sep 2025
$147.47
$65.00
$212.47
$7,652.03
Oct 2025
$148.70
$63.77
$212.47
$7,503.33
Nov 2025
$149.94
$62.53
$212.47
$7,353.39
Dec 2025
$151.19
$61.28
$212.47
$7,202.20
Jan 2026
$152.45
$60.02
$212.47
$7,049.74
Feb 2026
$153.72
$58.75
$212.47
$6,896.02
Mar 2026
$155.00
$57.47
$212.47
$6,741.02
Apr 2026
$156.30
$56.18
$212.47
$6,584.72
May 2026
$157.60
$54.87
$212.47
$6,427.12
Jun 2026
$158.91
$53.56
$212.47
$6,268.21
Jul 2026
$160.24
$52.24
$212.47
$6,107.98
Aug 2026
$161.57
$50.90
$212.47
$5,946.41
Sep 2026
$162.92
$49.55
$212.47
$5,783.49
Oct 2026
$164.27
$48.20
$212.47
$5,619.22
Nov 2026
$165.64
$46.83
$212.47
$5,453.57
Dec 2026
$167.02
$45.45
$212.47
$5,286.55
Jan 2027
$168.42
$44.05
$212.47
$5,118.13
Feb 2027
$169.82
$42.65
$212.47
$4,948.31
Mar 2027
$171.23
$41.24
$212.47
$4,777.08
Apr 2027
$172.66
$39.81
$212.47
$4,604.42
May 2027
$174.10
$38.37
$212.47
$4,430.32
Jun 2027
$175.55
$36.92
$212.47
$4,254.76
Jul 2027
$177.01
$35.46
$212.47
$4,077.75
Aug 2027
$178.49
$33.98
$212.47
$3,899.26
Sep 2027
$179.98
$32.49
$212.47
$3,719.28
Oct 2027
$181.48
$30.99
$212.47
$3,537.81
Nov 2027
$182.99
$29.48
$212.47
$3,354.82
Dec 2027
$184.51
$27.96
$212.47
$3,170.31
Jan 2028
$186.05
$26.42
$212.47
$2,984.25
Feb 2028
$187.60
$24.87
$212.47
$2,796.65
Mar 2028
$189.17
$23.31
$212.47
$2,607.49
Apr 2028
$190.74
$21.73
$212.47
$2,416.75
May 2028
$192.33
$20.14
$212.47
$2,224.42
Jun 2028
$193.93
$18.54
$212.47
$2,030.48
Jul 2028
$195.55
$16.92
$212.47
$1,834.93
Aug 2028
$197.18
$15.29
$212.47
$1,637.75
Sep 2028
$198.82
$13.65
$212.47
$1,438.93
Oct 2028
$200.48
$11.99
$212.47
$1,238.45
Nov 2028
$202.15
$10.32
$212.47
$1,036.30
Dec 2028
$203.83
$8.64
$212.47
$832.47
Jan 2029
$205.53
$6.94
$212.47
$626.93
Feb 2029
$207.25
$5.22
$212.47
$419.69
Mar 2029
$208.97
$3.50
$212.47
$210.71
Apr 2029
$210.71
$1.76
$212.47
$0.00
See if you pre-qualify for a personal loan – without affecting your credit score
Just answer a few questions to get personalized rate estimates from multiple lenders.
on NerdWallet
How to choose between shorter and longer loan terms
Try to balance short- and long-term affordability when choosing a loan term. The ideal loan term is the shortest one you can get while still being able to comfortably afford the monthly payments.
A shorter loan term makes sense when:
You want to pay off the loan fast.
You want to save money in interest.
You can afford a higher monthly payment.
You’re borrowing a small amount of money.
A longer loan term makes sense when:
You want to keep monthly payments low for the full loan term.
You’re borrowing a large amount of money and need a longer time to pay it off.
What to consider when choosing a personal loan term
Loan amount: It may be easier to repay a small loan in a short period, but a longer term may be needed to repay a large amount of money. Some lenders, such as LightStream, offer terms of 10 years or longer for home improvement loans.
APR: A lender may offer lower APRs on shorter-term loans because there’s less time for a borrower’s financial situation to change during a short repayment term, which lowers the risk of default. When comparing personal loan offers, take note of the APR at different term lengths.
Monthly payments: Make sure you can comfortably afford the monthly payment for the full loan term. Many lenders charge late fees for missed payments, and your credit score can drop significantly if you miss a payment by more than 30 days.
Total interest costs: If your offer doesn’t outline the total interest costs, use a personal loan calculator to see how much you’ll pay in total interest for the loan. Gauge whether you feel comfortable with the overall cost of the loan at that term length.
Potential changes to your future budget: Personal loans are typically fixed-rate loans, which means monthly payments stay the same throughout the life of the loan. If you anticipate having less cash flow in the coming months or years, a loan term with lower monthly payments may be the right choice.
How to get a personal loan
Check your credit. Lenders typically use credit score, credit history, income and existing debts to determine if a borrower qualifies for a personal loan. Get a copy of your credit report before applying for a loan to understand what’s influencing your score. You can get your report for free at annualcreditreport.com or on NerdWallet. Dispute credit report errors that could be dragging your score down, such as an incorrect balance on a credit account.
Review your budget. Examine cash flow to see what size monthly payment you can afford. Use a personal loan calculator to determine the loan term and APR that would give you affordable monthly payments.
Pre-qualify. Many lenders let you pre-qualify for a personal loan with no impact to your credit score. Pre-qualifying shows the likelihood of loan approval, plus it gives an estimate of your loan amount, APR, loan term and monthly payments.
Compare offers. Once you’ve pre-qualified with multiple lenders, compare offers to see which best fits your needs. Use APR for an apples-to-apples comparison of the cost of the loan.
Apply. When you’re ready to accept a loan offer, you’ll submit a formal application. You’ll likely need to show documents to verify your identity and income, and the lender will run a hard credit check, which will cause a temporary dip in your credit score. If approved, most lenders will send funds within a week. Some lenders can fund a loan the same or the next day after you’re approved. Your first payment is typically due about 30 days later.
Frequently asked questions
How long do you usually have to repay a personal loan?
Personal loan repayment terms are generally two to seven years, but it varies depending on the lender.
Can you get a 10-year personal loan?
Most personal loan terms are capped at five or seven years, but some lenders offer 10-year repayment terms for home improvement projects.
Can you change your personal loan term length?
You usually can’t change the personal loan term, but you may be able to refinance your loan to replace it with a new loan that has a different term. Also, if the lender allows you to temporarily pause payments due to financial hardship, the loan term may be extended to make up for the skipped payments.
Can you pay off a personal loan early?
You can pay off your personal loan early by paying more than the required monthly payment or by making extra payments throughout the month. Most lenders don’t charge a prepayment penalty, but it’s a good idea to check the loan agreement just in case.
Government home loans are mortgages that are guaranteed or issued by a federal agency to help first-timers, rural residents, veterans and others buy, refinance or improve a home.
The three biggest loan programs are backed by the Federal Housing Administration, U.S. Department of Veterans Affairs and U.S. Department of Agriculture. With low or no down-payment requirements, these loans are often good options for first-time buyers, although they’re open to repeat buyers, too.
Explore mortgages today and get started on your homeownership goals
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Won’t affect your credit score
Government home loans for buying
FHA home loans
FHA loans are backed by the Federal Housing Administration and issued by FHA-approved private lenders. The down payment requirement is as low as 3.5% with a minimum credit score of 580 and 10% with a minimum credit score of 500.
Borrowers must pay for mortgage insurance, including an upfront premium of 1.75% of the loan amount and an annual premium ranging from 0.15% to 0.75% of the average outstanding loan balance. The annual cost, which is divided into monthly installments, depends on the down payment, loan amount and term. Mortgage insurance can be canceled after 11 years with a down payment of 10% or more.
Properties must meet FHA minimum requirements and be within FHA loan limits, which generally are up to $498,257 for single-family homes in low-cost areas and up to $1,149,825 in high-cost areas.
USDA home loans
USDA mortgages are no-down-payment loans for moderate- and low-income buyers in federally designated rural areas.
Most USDA loans are guaranteed by the U.S. Department of Agriculture and issued by approved lenders. Your household income must be under 115% of the median household income in your county. Loan limits also apply. You can learn more about those limits in your area on the USDA website.
Unlike FHA loans, USDA guaranteed loans don’t require mortgage insurance. Instead, borrowers pay an upfront fee of 1% of the loan amount and an annual fee of 0.35% of that year’s average outstanding loan balance. The annual fee is divided into monthly installments and included in mortgage payments.
The USDA also issues home loans directly to low-income buyers who are without safe housing and can’t otherwise get a home loan.
VA home loans
VA loans are no-down-payment mortgages for active-duty and veteran military members and some surviving spouses. The loans are guaranteed by the U.S. Department of Veterans Affairs and issued by approved lenders.
VA loans don’t require mortgage insurance, but most borrowers will pay an upfront funding fee, which ranges from 1.25% to 3.3% of the loan. The amount depends on your down payment and whether this is your first VA loan.
Homes must meet the VA’s minimum property requirements.
Government mortgage programs for refinancing
FHA rate and term refinance
A rate and term refinance loan lets you refinance an FHA or other mortgage to get a lower interest rate or different term, such as a 30-year loan instead of a 15-year mortgage.
FHA streamline refinance
An FHA streamline refinance makes refinancing easier because it doesn’t require a home appraisal. To qualify, you must have an FHA loan and a history of making mortgage payments on time. With a non-credit-qualifying streamline refinance, the lender isn’t required to check your credit.
FHA cash-out refinance
An FHA cash-out refinance replaces your mortgage with an FHA loan and lets you convert some of your home equity into cash.
USDA streamlined assist refinance
A streamlined assist lets you refinance a USDA guaranteed or direct loan to lower your payments. No appraisal or credit check is required in many cases.
VA Interest Rate Reduction Refinance Loan
VA cash-out refinance
With this loan, you can refinance a VA or other type of mortgage and convert some of your home equity into cash.
Explore mortgages today and get started on your homeownership goals
Get personalized rates. Your lender matches are just a few questions away.
Won’t affect your credit score
Government-backed mortgages for home improvements
FHA home improvement loans
The FHA 203(k) mortgage allows you to buy or refinance a home and include the cost of improvements in the same loan.
VA supplemental loans
You must have a VA mortgage to qualify for a VA supplemental loan to finance projects that improve the safety and livability of the home. The loan cannot be used for luxuries, such as swimming pools or barbecue pits.
FHA and VA energy-efficient loans
The FHA and VA back energy-efficient mortgages, which allow you to upgrade your home with money-saving modifications that use less energy.
Rural housing repair loans and grants
Another option for rural residents is the USDA Section 504 Home Repair program. If you can’t get a loan anywhere else and are on a tight budget, this loan can help with improvements and emergency repairs. Grants are available to those 62 and older.
Other government home loan programs
Home loans for Native American veterans
Native American veterans, or veterans whose spouse is Native American, can use the VA’s Native American Direct Loan program to buy, build or improve their home or refinance a mortgage. The residence must be on Native American trust land.
Section 184 Indian home loan
This loan for Native Americans, Alaska Natives and members of other designated entities or tribes allows low down payments and relaxed credit standards. The mortgage can be used to build a house, buy an existing home, pay for improvements or refinance a mortgage.
The Department of Housing and Urban Development’s Section 184A program offers the same benefits to Native Hawaiians. Find complete details and participating lenders at the HUD Section 184 page.
Home and property disaster loans
In a county declared as a disaster area, homeowners may qualify for low-interest loans to repair or replace their primary residence and personal property. The program is implemented by the U.S. Small Business Administration.
FHA loans for disaster victims
A Section 203(h) loan, insured by the FHA, offers mortgages to homeowners to rebuild or replace their homes after a presidentially declared disaster. See an FHA lender for details.
Welcome to the picturesque city of Newton where history meets modern charm and a strong sense of community prevails. Nestled just outside of Boston, Newton boasts a unique blend of suburban tranquility and urban convenience. With its tree-lined streets, top-rated schools, and diverse neighborhoods, Newton offers a welcoming environment for residents of all ages. There’s a neighborhood to suit every lifestyle from the historic architecture of Newton Centre to the bustling energy and Italian heritage of Nonantum.
Searching for the perfect apartment in the heart of Newton or a cozy condo in a peaceful corner of the city? You’ve come to the right place. In this Apartment Guide article, we’ll cut to the chase, breaking down the pros and cons of moving to Newton. Let’s get started and see what awaits in this charming town.
Pros of living in Newton, MA
1. Top-notch education
Newton is regionally renowned for its exceptional public school system. It consistently ranks among the best in Massachusetts. The city’s commitment to education is evident through its well-funded schools, dedicated teachers, and a wide range of academic and extracurricular opportunities for students. Newton is also close to several prestigious private schools such as the Newton Country Day School and the Commonwealth School, providing families with diverse options for their children’s education.
2. Green spaces and parks
Residents are fortunate to have access to an abundance of green spaces and parks. Newton has over 1000 acres of parkland, including the picturesque Crystal Lake and the Newton Commonwealth Golf Course. Whether it’s for leisurely strolls, outdoor sports, or simply enjoying nature, the well-maintained parks in Newton provide a tranquil escape from the bustle of Boston.
3. Vibrant cultural scene
Newton is home to numerous art galleries, theaters, and music venues. Events like the Newton Open Studios, run by the Newton Art Association, offer a unique opportunity to engage directly with talented local artists. Arts and culture lovers also have easy access to the incredible museums, theaters, and galleries of Boston.
4. Convenient access to Boston
One of the major advantages of living in Newton is its proximity to Boston, which is only a 15 minute drive away. With just a short commute via car, train, or bus, residents can easily travel to Boston for work, entertainment, and cultural experiences. This convenient access to Boston’s amenities and opportunities adds an extra layer of appeal to living in Newton. Conversely, Newton offers Boston residents a serene and charming alternative to the busy Boston streets.
5. Strong sense of community
Residents of Newton actively participate in local events, volunteer initiatives, and neighborhood associations. The city’s close-knit neighborhoods and friendly atmosphere create a welcoming environment.
6. Culinary diversity
Foodies in Newton are spoiled for choice with an array of dining options representing diverse cuisines. From cozy cafes and family-owned eateries to upscale restaurants like sycamore. and Tartuffo, the city’s culinary scene caters to a wide range of palates and budgets.
7. Historic charm
Newton boasts a rich history and architectural heritage, with many well-preserved historic buildings and landmarks that add character to the city. The Jackson Homestead offers a fascinating glimpse into the area’s past, while the picturesque Newton Centre Historic District provides a charming backdrop for leisurely walks and exploration.
Cons of living in Newton, MA
1. High cost of living
One of the primary drawbacks of living in Newton is the high cost of living, including steep housing prices and overall expenses. The city’s desirable location, excellent schools, and quality of life contribute to the premium cost of residing in this community.
2. Limited public transportation options
Despite its proximity to Boston, Newton has limited public transportation options, which can be a drawback for residents who rely on public transit for their daily commutes. While there are bus routes and commuter rail services, the overall public transportation infrastructure within the city itself may not be as extensive or convenient as in other urban areas.
3. Traffic congestion
During peak hours, the city’s roadways and intersections may become congested, impacting the overall ease of travel within and around the area. However, it’s important to remember that this is common in the Boston area and surrounding towns.
4. Limited nightlife options
For those seeking a lively nightlife scene, Newton may not offer as many options compared to nearby Boston. While there are bars, restaurants, and entertainment venues, the nightlife in Newton is relatively subdued and wraps up early.
5. Harsh winters
The New England region, including Newton, experiences harsh winters with cold temperatures, snowfall, and inclement weather conditions. While the winter season can be picturesque, it also brings challenges such as snow removal, icy roads, tire chains, and the need for extra precautions during the colder months.
6. Limited housing inventory
Housing in Newton primarily consists of single family homes so the share of apartment complexes and rental homes is smaller than many of the major cities. Furthermore, due to the high demand for housing in Newton there may be limited inventory available for sale, leading to a competitive real estate market.
7. Zoning restrictions
Zoning restrictions do not generally affect renters. But if you are hoping to buy a house in Newton eventually, you will want to be aware that the city has strict zoning regulations and restrictions. Many of these restrictions are in place to retain the character and history of the town. However, they can impact property development, renovations, and expansions. These regulations may pose challenges for homeowners looking to make major cosmetic or structural changes to their properties, requiring careful consideration and adherence to local zoning laws.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
To build credit with a secured credit card:
1. Keep your balance low.
2. Use it only for small regular purchases.
3. Monitor your spending.
4. Pay off the entire balance each month.
Whether you’re a teenager trying to start building credit or looking to rebuild your credit after some bad luck, it can be difficult to get creditors to give you opportunities. You know you need to build credit, but you can’t do it if no one will issue you credit. Fortunately, you can use a tool like a secured credit card.
Wondering how to build credit with a secured credit card? Read on to learn everything you need to know to start turning your credit around.
Table of contents:
Research your options
Put down your deposit
Spend wisely on your secured credit card
Never miss a bill payment
Track your progress on your credit report
Use your improved credit to graduate to an unsecured credit card
What is a secured credit card?
A secured credit card is just like a regular credit card, but it requires a deposit that covers the spending limit. Since the deposit will cover what you owe if you don’t pay your credit card bill, it reduces the credit card issuer’s risk when extending you credit.
It’s just like when your landlord requires you to pay a security deposit to cover any damages to the apartment. Even if you leave without paying for the repairs, the landlord can cover them using your security deposit.
Use the tips below to help you use your secured credit card responsibly and build your credit.
1. Research your options
Don’t sign up for just any secured credit card. Take the time to find the best secured credit card for your situation and carefully consider the pros and cons of secured credit cards before applying.
Start the process by checking your credit. While secured credit card issuers are more likely to extend you credit no matter your credit score, not all do. Make sure you know what your credit score is before applying.
Armed with your credit score, take some time to research different secured cards. While most secured credit cards don’t offer the same features as unsecured credit cards, you’ll find a few that do.
Consider which of the following features are most important to you:
Flexible deposits
Low annual fees
Automatic account reviews to determine if you’re ready for an unsecured credit card
No credit check (note that this may come with a higher annual fee)
Reward or cash back options
Finally, consider any potential costs associated with unsecured credit cards. Discover if the deposit is refundable and if there are any application or annual fees.
Once you’ve decided on a card, fill out the application and send in the application fee (if there is one).
2. Put down your deposit
After you’ve been approved, the credit card issuer will tell you your credit limit and ask you to pay your deposit. Make sure you do so quickly—if you don’t get your deposit in on time, they may close your account before you have a chance to use it.
Remember, the amount you’ll have to deposit will depend on your credit card issuer. Some secured credit card issuers require your deposit to cover the entire credit limit, while others may only require you to put down half of it. Some companies also allow you to raise your credit limit by increasing your deposit, while others aren’t as flexible.
3. Spend wisely on your secured credit card
After making your deposit, you can use your secured credit card like you would any other credit card to build credit. You can use your secured card to make purchases anywhere that takes a credit card, and when you hand your card to the sales clerk to make your purchase, they won’t be able to tell it’s a secured card.
But if you want to improve your credit, you must use your secured card wisely. Keep the following tips in mind:
Make regular small purchases with your secured card. Consider using your card for one type of purchase, such as gas or monthly subscriptions. This will keep your balance low while also keeping your spending in check.
Keep the balance as low as possible. Experts typically recommend keeping it below 30 percent, but since you’re actively working to improve your credit, try only using 10 percent of your available credit. This means that if your card has a limit of $1,000, you should keep your balance below $100. Small regular purchases will help you accomplish this.
4. Never miss a bill payment
The deposit on your secured credit card does not cover your purchases, so you still need to pay your monthly bill. While you are only required to pay the minimum balance, make it a habit to pay the entire balance off each month.
This will keep your credit utilization low and help you avoid paying interest on an unpaid balance. Avoiding interest charges is especially important on secured credit cards since they often carry higher interest rates than unsecured credit cards.
5. Track your progress on your credit report
As you use your secured credit card, monitor your credit score closely. While increasing your credit may be a slow process, seeing small gains can be motivating. Plus, it will help you ensure your credit report is accurate.
Some credit card companies are starting to offer credit monitoring services and include your credit score on your bill. If your credit card issuer doesn’t offer this, you can see your credit report at AnnualCreditReport.com.
6. Use your improved credit to graduate to an unsecured credit card
As your credit improves, you can upgrade to an unsecured credit card. Some companies also refer to this as “unsecuring” or” graduating” to an unsecured credit card.
Some secured credit card issuers will automatically upgrade you to an unsecured credit card, at which point they’ll usually apply your security deposit as a statement credit offsetting your purchases. You can also apply for an unsecured credit card, at which point you’ll close the secured credit card and the issuer will refund your deposit. The best time to upgrade to an unsecured credit card is when you feel confident in your credit card habits. You want to ensure you can use the credit card responsibly to keep building your credit.
What are the benefits of a secured credit card?
Secured credit cards offer several advantages:
Most of them report to the three major credit bureaus (Experian®, TransUnion® and Equifax®) so you can build your credit.
Since the security deposit covers their risk, secured credit card issuers are more likely to issue credit to people with no or poor credit.
You can gain credit card experience and develop healthy credit card habits.
Over time, you can work toward an unsecured credit card, which may offer better features.
How long does it take to build credit with a secured credit card?
How long it takes to build credit with a secured credit card depends on several factors, including your credit history and your behavior with the secured credit card. Someone who makes a lot of large purchases on their secured card might see their score improve slower than someone who only makes small purchases, even if both people pay their bills off in full each month.
Typically, it takes six months to a year to see your credit health improve, making a secured credit card one of the best ways to build credit relatively fast. Remember: a secured credit card doesn’t automatically improve your credit—you have to use the card responsibly.
FAQ
Learn more about using secured credit cards to improve your credit below.
How much will a secured credit card raise my score?
Using a secured credit card responsibly may help your credit slightly in the short term, especially when you combine it with other credit improvement strategies. Larger gains will come as you continue to work on your credit over the course of a year or two.
Your credit situation and how responsibly you use the secured credit card will determine how much it improves your credit. Increasing your credit takes time and patience—no credit improvement strategy offers an overnight fix.
Can you increase a secured credit card limit?
Secured credit cards often have low balances, but you may be able to get a credit limit increase. Contact your credit card issuer and ask if you can increase your deposit in exchange for a larger limit. You can also ask if you are eligible to graduate to an unsecured credit card, which typically comes with a larger credit limit.
Work on your credit with Lexington Law Firm
Remember: a secured credit card is a powerful tool to improve your credit, but only if you use it responsibly—spend wisely, pay your bill on time every time and keep your balance low. Take this time to develop a healthy relationship with credit card usage, be patient and trust the process.
If you’re looking to learn more about how to build your credit, the team at Lexington Law Firm can help. Get a free credit snapshot today to get started.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
The refi market continues to be anemic as higher rates are persisting, with refi volume dropping 3.4% compared to the prior month. Seven of the top nine lenders recorded gains in April, with Plaza Home Mortgage, Liberty Reverse Mortgage/PHH and Guild Mortgage standing out for their gains between 36% and 48%.
When asked about whether or not these gains lead to overarching optimism for the direction of the industry or if caution should remain, RMI President John Lunde said he’d split the difference.
“I’ll call it cautious optimism,” he said. “Nothing we’ve seen recently suggests rampant growth, but if we can manage steady gains that would be a big step in the right direction.”
H4P gains are particularly encouraging, which likely stems from renewed industry attention likely brought about by rule changes announced in 2023 and 2024 by the Federal Housing Administration (FHA).
“I do think there’s more focus and attention on it this year with the changes by FHA, which gives originators a reason to take a fresh approach and energy into that niche,” he said.
When asked about where refi business is still taking place despite high rates and falling share of total volume, Lunde said it comes down to the concentration of home price appreciation in a given area of the country.
“Refi is generally going to happen where home price appreciation has been the strongest for the past several years, which can outpace the decline in principal limit factors from higher interest rates,” he said. “I’d expect to see these endorsements continue to whither though, as the recent increase in the 10-year CMT took away the benefit of the declines in the fourth quarter.”
As for what industry professionals should be keeping in mind, purchase may be the name of the game in the near future, Lunde said.
“I continue to think it’s all about purchase business, and getting in front of borrowers that are looking at a forward mortgage right now,” he said. “In many cases, reverse-eligible borrowers will see a lot more benefit for their financial goals from a reverse than a new forward or HELOC.”
HMBS issuance
The top HMBS issuer for April was Finance of America Reverse (FAR), which will soon consolidate under the overarching Finance of America brand. It created $155 million in new issuance, outdoing its March figure by $15 million. Longbridge Financial increased its own issuance to $107 million, while Liberty Reverse Mortgage/PHH and Mutual of Omaha Mortgage jumped to $95 million and $88 million, respectively.
“April’s original (first participation) production of $322 million was $54 million higher than March’s $268 million, though lower than that of April 2023, when approximately $379 million in original new HMBS pools were issued,” New View said in one of its two HMBS commentaries.
When asked about HMBS performance for the month, New View Partner Joe Kelly said that while performance is improved, “it’s not much of a bounce back but a period of relative stability and tightening spreads helps.”
A healthier first-participation pool market — in this case 20 of the month’s 89 pools — could be a good sign for the industry, but it largely “remains to be seen,” he said. “There is enough so far to keep reasonable liquidity and pricing.”
Mandatory purchase of HMBS loans out of pools — required when a loan reaches 98% of its maximum claim amount (MCA) — is generally stable, at least relatively speaking, Kelly explained, according to data shared in a second commentary. The payoff rate for April beat the 12-month average, and when asked how that factors into overall HMBS market health, Kelly explained the benefits.
“Payoff rates have stabilized at a lower rate for non-assignment payoffs,” he said. “The reduction in refinancing risk has had a beneficial effect on overall pricing.”
In terms of trends that New View is observing now, Kelly said that prepayments and losses are tracking low versus historical averages, which is largely healthy for the market. He added that he cannot “recall a time when there were so many proprietary reverse mortgage issuers.”
Obtaining a mortgage with a reduced interest rate is a crucial objective for many prospective homeowners. Getting a good interest rate can save borrowers thousands of dollars over the course of a loan and have a big impact on your financial health.
It takes research and preparation to navigate the complicated world of mortgage rates, but making the effort can pay off with lower monthly payments and significant long-term savings.
What Is the Best Way to Get a Lower Mortgage Rate?
Although there’s no one-size-fits-all approach that will help homebuyers qualify for a mortgage at a reduced mortgage rate, there are a few crucial steps one can take. These include carefully tending your credit score and diligently comparing lenders and financing choices.
This may be especially daunting to first-time homebuyers, but borrowers who learn how to lower their mortgage interest rate can better their chances of long-term financial stability and successful homeownership.
💡 Quick Tip: SoFi’s award-winning mortgage loan experience means a simple application — we even offer an on-time close guarantee. We’ve made $7.5 billion in home loans so we know a thing or two about what makes homebuyers happy.‡
First-time homebuyers can prequalify for a SoFi mortgage loan, with as little as 3% down.
Pros and Cons of a Lower Mortgage Rate as a Home Buyer
As a prospective homeowner, getting a reduced mortgage rate could offer many benefits, though there are a few potential challenges as well.
Pros:
• Decreased monthly payments: A lower interest rate usually results in a lower monthly mortgage payment, giving you more money for investments or other expenses.
• Long-term savings: Depending on the loan amount and term, even a small interest rate reduction can save a significant amount of money over the course of the loan — possibly tens of thousands of dollars. Experiment with a mortgage calculator to see how the interest rate and loan term impact the total interest paid over the life of the loan.
• Building equity faster: As a result of lower interest rates, a larger portion of your monthly payment is applied toward paying off the loan, hastening the process of building equity in your house.
Cons:
• Qualification requirements: Borrowers with a strong credit rating, steady income, and a sizable down payment are frequently eligible for the lowest rates offered by lenders. Achieving these requirements may prove difficult for some buyers.
• Higher upfront costs: Securing a lower interest rate may require paying higher upfront costs, such as points or a big down payment.
• Limited availability: Some purchasers may find that the lowest advertised rates are only accessible to customers who qualify for certain loan types under particular circumstances.
• Market volatility: Interest rates can change over time for an array of economic reasons. An adjustable-rate mortgage may offer a borrower a low initial interest rate, but savings could be outweighed by rate hikes in the future.
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Ways to Get a Lower Mortgage Rate
If you’re wondering how to get a lower interest rate on a mortgage, here are tactics you’ll want to take a look at:
Shop for Mortgage Rates
Finding the best loan terms for a house purchase requires doing your research on mortgage interest rates. Get quotes first from a variety of lenders, such as banks, credit unions, and online lenders. Consider whether you are eligible for a loan guaranteed by the government, such as a VA loan (from the U.S. Department of Veterans Affairs) or an FHA loan, backed by the Federal Housing Administration. Don’t accept the first mortgage deal you run across; shop around and compare rates offered by different lenders.
To evaluate rates, fees, and terms side by side, make use of online comparison tools. Never be afraid to ask a lender if they can match a competitor’s rate or give better conditions. Other considerations, like closing expenses and the caliber of the customer service, may influence your choice of mortgage, and the lowest rate that is advertised may not always be the best one. Make sure you have researched your selection and that it is in line with your long-term financial objectives.
Nurture Your Credit Score
Borrowers with better credit scores usually receive reduced rates from lenders. A better rate might result from paying your bills on time, cutting overall debt, fixing any inaccuracies on your credit report — or all three. Get a copy of your credit report from each of the big credit reporting agencies, check it for accuracy, and quickly request fixes for any inaccuracies. Next, focus on paying off current debts on time, maintaining modest credit card balances, and refraining from creating new credit lines unnecessarily.
Choose Your Loan Term Carefully
Investigate different types of mortgage loans, including fixed-rate and adjustable-rate mortgages (ARMs). Each type has a different interest rate structure and set of requirements. Shorter loan terms of 15 or 20 years usually have cheaper interest rates than 30-year mortgages, which results in significant savings over the course of the loan. They also typically have larger monthly payments.
Longer loans spread out payments over an extended period of time, which lowers the monthly payment but comes with higher overall interest charges. When choosing a loan term, take your cash flow, long-term objectives, and financial status into account. While a longer term could offer more flexibility with lower monthly payments, choosing a shorter term can help save money and allow you to pay off the mortgage sooner.
Make a Larger Down Payment
Increasing your down payment is one of the best ways to get a lower mortgage rate. For borrowers who are able to make a substantial down payment — typically 20% or more of the purchase price of the home — lenders frequently offer lower interest rates. A higher down payment shows financial responsibility and lowers the lender’s risk, which makes for a more desirable borrower. Borrowers can also eliminate private mortgage insurance (PMI) with a sizable down payment, which further reduces your monthly payment. Although stowing away a down payment takes time and discipline, there could be significant interest savings over the course of the loan.
Buy Mortgage Points
Purchasing discount points, sometimes referred to as mortgage points, can be a calculated move to obtain a cheaper mortgage rate. Each point costs 1% of the total loan amount and lowers the interest rate by a specific amount, usually 0.25% per point. Although purchasing points necessitates a one-time payment, it might provide substantial savings during the loan term. Before you purchase points, make sure you set aside cash reserves for emergencies. And ask yourself if you plan to stay in the house past the breakeven point (the point at which the monthly savings from a lower payment equal the initial cost of purchasing points).
Lock in Your Mortgage Rate
Once you’ve found a good rate and gone through the mortgage preapproval process, locking in your rate is a crucial step in protecting against potential rate increases during the closing process. When a rate is locked in, the lender agrees to guarantee the agreed-upon interest rate for a predetermined amount of time — usually 30 to 60 days — while the loan application is being processed. This guarantees that the rate won’t change during this time, even if market rates rise. If rates drop, though, one might not be able to benefit from the lower rates unless the lender has a float-down option.
Refinance Your Mortgage
If mortgage rates drop significantly (or your financial profile improves markedly) after you purchase your home, refinancing your mortgage can cut monthly payments and total loan costs. But it’s crucial to take into account refinancing charges, like appraisal and closing costs, and balance these against the possible savings from a lower rate. Homebuyers should think about long-term financial objectives and how refinancing fits within their total budget. Working with a reliable lender and thoroughly weighing options can help one decide if refinancing is the best course of action.
💡 Quick Tip: Have you improved your credit score since you made your home purchase? Home loan refinancing with SoFi could get you a competitive interest rate with lower payments.
Searching for Mortgage Rate Tips
Start by keeping an eye on market developments and learning how the economy affects mortgage rates. To be eligible for reduced rates, carefully manage your credit score. You can also get reasonable rates and better conditions by shopping around and comparing offers from different lenders. To optimize savings, think about the advantages of increasing your down payment, buying discount points, and selecting the ideal loan term. Lock in a cheaper rate while the market is favorable.
Recommended: Home Loan Help Center
The Takeaway
Prospective homeowners can improve their chances of obtaining a favorable rate and ultimately save a large amount of money over the course of their loan by raising their credit score, shopping around for the best rates, and negotiating with lenders. Market conditions, lender competition, and your individual financial situation will factor into your mortgage terms. Greater financial stability can be achieved from taking proactive measures to achieve a cheaper mortgage rate, whether through buying discount points or increasing the down payment.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
Can you ask your mortgage company to lower your interest rate?
Yes, you can negotiate with your mortgage company to potentially lower your interest rate before you sign on for a loan. After you have a mortgage, you could ask your lender about a mortgage recast or a refinance.
What makes mortgage interest rates go down?
Mortgage interest rates can decrease due to factors such as economic downturns, changes in federal monetary policy, and market competition among lenders.
Can you negotiate a lower interest rate on a mortgage?
Yes, you can use variables like your creditworthiness, the state of the market, and lender competition to negotiate a lower interest rate on a mortgage.
Photo credit: iStock/Delmaine Donson SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
‡SoFi On-Time Close Guarantee: If all conditions of the Guarantee are met, and your loan does not close on or before the closing date on your purchase contract accepted by SoFi, and the delay is due to SoFi, SoFi will give you a credit toward closing costs or additional expenses caused by the delay in closing of up to $10,000.^ The following terms and conditions apply. This Guarantee is available only for loan applications submitted after 04/01/2024. Please discuss terms of this Guarantee with your loan officer. The mortgage must be a purchase transaction that is approved and funded by SoFi. This Guarantee does not apply to loans to purchase bank-owned properties or short-sale transactions. To qualify for the Guarantee, you must: (1) Sign up for access to SoFi’s online portal and upload all requested documents, (2) Submit documents requested by SoFi within 5 business days of the initial request and all additional doc requests within 2 business days (3) Submit an executed purchase contract on an eligible property with the closing date at least 25 calendar days from the receipt of executed Intent to Proceed and receipt of credit card deposit for an appraisal (30 days for VA loans; 40 days for Jumbo loans), (4) Lock your loan rate and satisfy all loan requirements and conditions at least 5 business days prior to your closing date as confirmed with your loan officer, and (5) Pay for and schedule an appraisal within 48 hours of the appraiser first contacting you by phone or email. This Guarantee will not be paid if any delays to closing are attributable to: a) the borrower(s), a third party, the seller or any other factors outside of SoFi control; b) if the information provided by the borrower(s) on the loan application could not be verified or was inaccurate or insufficient; c) attempting to fulfill federal/state regulatory requirements and/or agency guidelines; d) or the closing date is missed due to acts of God outside the control of SoFi. SoFi may change or terminate this offer at any time without notice to you. *To redeem the Guarantee if conditions met, see documentation provided by loan officer. Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Tucked within the prestigious gated community of Monterra in Monterey, California lies a true architectural gem that’s having its second glow-up.
Originally commissioned and featured by Sunset Magazine in 2008 as one of their famed Idea Homes, the stunning property at 8370 Monterra Views in Monterey, Calif. has graced its fortunate owners with breathtaking ocean and mountain vistas for over a decade.
“Living here has been a profound experience,” the owner shares exclusively with Fancy Pants Homes. “The design of the house, particularly the living room with its expansive views, has given us countless sunset memories, a daily spectacle that never ceases to amaze.”
Now, for the first time since its inception, this rustic modern masterpiece is being offered for sale, priced at $6.5 million. Tim Allen of Tim Allen Properties Team (affiliated with Coldwell Banker Realty in Northern California) holds the listing.
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Property overview
Designed by renowned restoration architect Thomas Bateman Hood, the 7,286-square-foot residence seamlessly blends inspiration from Steinbeck Country’s rustic roots with contemporary luxury.
The 5-bedroom, 6-bathroom estate spans three main structures across 1.75 acres, employing an effortless indoor-outdoor flow through expansive windows and sliding glass doors.
Reclaimed materials like redwood siding from an abandoned stagecoach station and repurposed barn doors pay homage to the region’s history.
Architectural and design highlights
Beyond its architectural pedigree, the $6.5 million home dazzles with an array of lavish amenities, its seamless fusion of rustic charm and modern luxury, and quite a few eco-conscious features.
The design incorporates a rustic modern style using eco-friendly and recycled materials such as reclaimed barn wood from a local stagecoach station.
Meanwhile, energy-efficient systems and drought-tolerant landscaping ensure minimal environmental impact.
A Sunset Idea House
As a Sunset Idea Home, this property was envisioned as a model of what modern, sustainable living should embody.
Each year, Sunset Magazine collaborates with leading architects, builders, and designers to create a home that not only pushes the boundaries of residential design but also integrates the latest in green technology and materials.
This home serves as a prime example of that initiative, designed to inspire and influence trends in home building.
Interior design and features
The interior of the home is a testament to sophisticated design, where contemporary furnishings meet artistic flair to create a welcoming yet impressively elegant atmosphere.
Vast windows and strategically placed gathering areas make the natural surroundings an integral part of the home experience.
The gourmet kitchen features a rounded island, high-end appliances, sapele wood cabinetry and quartz countertops. The opulent primary suite includes an infinity soaking tub and waterfall shower, while the other bedrooms have unique themes.
The sellers have many fond memories of the house
The sellers, Robert and Lauren, have many fond memories of their beautiful home.
As Robert reminisces, “The living room that has the best views has allowed us to see magnificent sunsets year-round. Those will be great memories. We’d stand arms around each other, mesmerized by the colors, our puppy pushing between our legs to see what we’re looking at.”
Connection to Steinbeck Country
Embedded in the locale that inspired much of John Steinbeck’s work, the property captures the essence of what the author celebrated about the region: a life of simplicity and a profound connection to nature.
The home’s location and design philosophy reflect this ethos, offering a peaceful retreat that honors its cultural and natural heritage.
The open floor plan and indoor-outdoor connection further evoke the relaxed lifestyle and closeness to nature John Steinbeck captured in his writings about old Monterey and Carmel.
Entertaining spaces flow effortlessly to the outdoors, where owners can lounge by the fire pit, play bocce ball or enjoy pizza from the outdoor oven.
Indoor-outdoor living at its best
The home’s seamless indoor-outdoor living was a highlight for the couple.
“The thing we loved best about the house was its indoor/outdoor quality…We commissioned a formal dining room table…right in the middle of the arbor. For the first 10 years we lived there we did all our entertaining outside, including formal dinners,” Robert shares.
More: One of Pebble Beach’s first-built homes lists for $22.75M ahead of its 100th anniversary
A serene ambiance despite the grandeur
Robert also speaks fondly of the home’s grand yet serene ambiance.
“If you’ve ever been in a Gothic Cathedral somewhere in Europe you know the feeling of walking into a building that possesses the great quality of space… At 7,200 square feet it’s like we float from room to room.”
The home’s tranquil setting allowed the couple to embrace a leisurely lifestyle reminiscent of Steinbeck’s writings about the area. As Robert muses, “Thoughts are slow and deep and golden in the morning.”
The current owners redid the outdoor areas
“We remodeled the entire outside,” the seller tells us, before diving into the extensive outdoor remodel and newly added amenities.
“We added the flagstones upon which the outdoor kitchen and outdoor living room set. We also added the arbor, dinning room table and pizza oven. Then to continue the feeling of stimulating entertainment of the senses we added a full sized bocci ball court.”
“For landscaping we added a small grove of producing Moreno Olive trees, artichoke plantings in the raised beds, and a vegetable garden in planters outside the kitchen window.”
Architectural gem seeks new caretakers
With only one previous owner and a coveted location within Monterey’s prestigious Monterra community, this property presents a rare opportunity for discerning buyers seeking a harmonious blend of luxury, sustainability, and architectural excellence.
Perhaps Robert said it best: “Working, playing and sleeping in our house is like being in a magic wonderland.” For the right buyer seeking a relaxing retreat near Monterey’s scenic attractions, the magic can begin anew.
More stories
‘Big Little Lies’ houses: Tracking down the Monterey Five’s stunning California homes
Brad Pitt’s home in Carmel, the historic D.L. James house
Home of the Week: A $35M legacy estate along Carmel’s prestigious Scenic Road is one of the area’s priciest
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Ask your property manager to report utilities or utilize a third-party reporting service to have your utility bill payments, such as electricity and water, reflected on your credit report.
Most landlords and utility companies don’t report your utility payments to the credit bureaus, so they don’t typically impact your credit. However, if your payments are in default or delinquent, the debt will likely be reported to one or all of the three major credit bureaus and negatively affect your credit.
While credit accounts, like credit cards, automatically appear on your credit report, utilities such as water and gas are becoming more easy to report.
You can now add the following utility bills to your credit report:
Rent
Electricity
Water
Gas
Phone and internet
Including your utilities and rent in your credit report can be an effective strategy for building credit if you consistently make on-time payments. In this guide, you’ll learn how to add utilities to your credit report and alternative ways to build your credit.
Table of contents:
Ask your property manager to report payments
Ask your leasing company or property manager about their ability to report utilities to credit bureaus. Some property managers utilize rent reporting services that report on rent payments, utility payments or both.
Some property managers will automatically enroll their renters in a reporting service when they sign their leases. Alternatively, it might be optional, and the renter may request to be enrolled in the service. Depending on the type of service and whether payments require verification, they may be free of charge or require an enrollment fee for renters.
Utilize a third-party reporting service
Alternatively, you can independently use a rent-reporting service. If your property manager doesn’t utilize such a service, there are tenant-only rent-reporting services you can enroll in.
To report your payments, you’ll likely need verification from your property manager. There may be additional fees associated with using a third-party service. You’ll need to pay an additional fee to utilize the service. Options for alternative credit reporting services include Experian Boost® and ExtraCredit from Credit.com®. These services allow users to provide credit bureaus with additional financial information by linking their bank accounts to their credit profile.
When adding your utilities to your credit report, consider your payment habits. If you can’t consistently pay your utility bills on time, using a reporting service may not be the best option for building your credit.
How can utility bills hurt your credit score?
If you use a reporting service and then fail to pay your utility payments on time, your payment history, which affects 35 percent of your FICO® score, will be negatively affected.
Additionally, if you miss enough payments on any utility account, the company can consider it delinquent and send it to collections.
The collection account will then become part of your credit file and will likely negatively impact your credit health. Collections and missed payments are considered derogatory marks and can stay on your credit report for up to seven years.
While paying the collection debt won’t remove the derogatory mark from your credit file early, we recommend settling the debt as soon as possible to avoid accumulating additional fees.
Alternative ways to build your credit
There are alternative routes to consider aside from including your utility bills in your report to build credit. Below are a few recommendations we suggest for building credit.
Credit builder loans
Credit builder loans allow borrowers to build a credit history or improve their credit score. With a credit builder loan, your payments go toward a savings account until the loan term ends. These payments are typically reported to the credit bureaus, demonstrating that you’re a reliable borrower and improving your credit and history.
When selecting a credit builder loan, it’s crucial to choose a realistic loan amount that you know you’ll be able to afford. You must complete the loan payments on time to see a positive impact on your credit history and to avoid penalties.
Credit cards
Credit cards are another convenient method to begin building credit, as payments are automatically reported to the credit bureaus. If you have bad or little credit history, consider applying for a secured credit card.
Unlike traditional credit cards, a secured credit card is backed by a cash deposit, which acts as collateral in case of a missed payment. You can improve your credit by using the card responsibly, maintaining low credit utilization and making timely payments.
Add a cosigner
If you’re having difficulty getting approved for a credit card due to a lack of credit history, consider adding a cosigner to your credit card application. A cosigner is considered equally responsible for any card utilization and accrued debt.
Having a cosigner signals lower risk to the lender, increasing the chance of approval. However, any missed payments will negatively impact both your credit and your cosigner’s.
FAQ
Below are commonly asked questions about how utility bills affect credit scores and are reported to credit bureaus.
Can I add utilities to Equifax or Experian?
Typically, utility bills aren’t automatically reported to Equifax® or Experian® by your utility provider or property manager. However, you may utilize a reporting service through your property manager or independently to add them to your credit history. Doing so can demonstrate positive financial behavior and potentially improve your credit.
How do I add rent and bills to my credit report?
You can include your rent and bills in your credit report through a reporting service. These services are either tenant-only or managed by property managers. Check to see if your property manager utilizes a reporting service. If they do, ask to be added to the service to report your rent and utility payments to the credit bureaus.
If they do not use one, consider using a tenant-only reporting service. Keep in mind that there is likely a fee associated with using the service. Lexington Law Firm offers assistance in repairing your credit, providing services ranging from obtaining a free credit assessment to addressing errors on your credit reports. Take the first step toward improving your credit by signing up today.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
The Bank of England has kept interest rates at a 16-year high for at least another month, as governor Andrew Bailey said Threadneedle Street would not bow to political pressure to cut rates.
The BoE’s Monetary Policy Committee (MPC), announced its latest decision at midday on Thursday, opting to keep the current rate of 5.25 per cent – set last August – in a blow to those hoping for the first reduction since 2020.
High interest rates have saddled homeowners with soaring mortgage repayment costs, and are used as a tool to help bring down inflation.
While the rate of Consumer Prices Index (CPI) inflation fell to 3.2 per cent in March, experts had suggested that two key economic indicators – pay growth and services sector inflation – have remained more stubborn.
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In positive news, the Bank improved its forecasts on Thursday to predict that CPI inflation would fall to 2.25 per cent next year and to 1.5 per cent in 2026, and said it expected the UK economy to grow by 0.5 per cent this year and 1 per cent in 2025 – slightly higher than previous predictions.
Key Points
Breaking: Bank of England holds interest rates at 5.25%
Governor Andrew Bailey says Bank will not bow to political pressure
Inflation will fall to 1.5 per cent within two years, Bank forecasts
Pay growth and services sector inflation remain stubborn
Voices: Improving the economy may limit a Tory wipeout, but it won’t save Rishi Sunak
16:02 , Andy Gregory
We’re pausing updates on the liveblog for this evening, thanks for following here.
You can read our latest reporting on the Bank of England’s announcement by clicking here, or else keep scrolling to catch up on the day’s events as we reported them.
Chancellor Jeremy Hunt said the Bank of England’s decision on rates was “finely balanced”.
Asked if he had been hoping rates would be cut ahead of the general election, Mr Hunt said: “I welcome the fact the Bank of England’s obviously thought about this very hard, they take this decision independently.
“And I would much rather that they waited until they’re absolutely sure inflation is on a downward trajectory than rush into a decision that they had to reverse at a later stage.
“What we want is sustainably low interest rates, and I think what’s encouraging is that the Bank of England governor, for the first time, has expressed real optimism that we’re on that path.”
Bank of England will not wait for US Federal Reserve to cut rates, says Bailey
14:59 , Andy Gregory
The Bank of England will not wait for the US Federal Reserve to move on interest rates before it decides to cut rates in the UK.
Andrew Bailey, governor of the Bank of England, said: “There is no law that the Fed has to go first. Moreover, we have a remit and a target that is related to domestic inflation in the UK.”
He added that the Bank will always “take the rest of the world into consideration”, but only in regard to how it affects domestic inflation.
“But there’s no law which says we can only move after the Fed moves. That is not something that ever gets discussed in the MPC.”
Bank of England ‘getting very close’ to first rate cut since 2020, says economist
14:41 , Andy Gregory
James Smith, ING developed markets economist, said: “The Bank of England is getting very close to its first rate cut. That much is clear from the latest policy statement which, while keeping rates on hold at 5.25%, has a distinctly more optimistic flair.
“It echoes recent comments from governor Andrew Bailey, who has been hammering home the message that the UK’s inflation outlook is quite different to the US.
“We’re still leaning slightly more towards an August start date for rate cuts, though it’s a close call. What isn’t in doubt is that the Bank is comfortable with moving ahead of the US Federal Reserve.”
Bank of England will not bow to political pressure to cut rates, says Bailey
14:22 , Andy Gregory
The Bank of England will not bow to increased pressure from politicians to cut interest rates, its governor has said.
Andrew Bailey said: “We are an independent central bank. We have a very clear remit. It’s our duty to exercise our duty at all times. When we are sitting in a room as the Monetary Policy Committee, we never discuss politics … It isn’t a consideration in that respect.”
It comes amid a period of heightened pressure from some MPs on the Bank to move faster on rate cuts in the run-up to a general election later this year.
When pressed on whether an upcoming election could influence how the Bank makes its decisions on rates, Mr Bailey added: “We will take the decisions at each meeting which are consistent with our remit. That’s our job and we will do our job.”
Inflation to fall before rising slightly before end of year, says Bank
14:04 , Andy Gregory
The Bank of England has predicted that lower oil and gas prices mean that inflation is likely to drop to around 2 per cent in the coming months before rising slightly before the end of the year.
Inflation could fall noticeably below target without rate cuts, says Bailey
13:52 , Andy Gregory
Here are more comments from Bank of England governor Andrew Bailey.
He told reporter: “It’s likely that we will need to cut bank rates over the coming quarters and make monetary policy somewhat less restrictive over the forecast period, possibly more so than currently priced into market rates.
“This will be consistent with ensuring that inflation does not fall noticeably below target at the end point of the forecast.”
Pound falls against the dollar
13:35 , Andy Gregory
The pound fell against the US dollar and euro after the Bank of England signalled growing support for an interest rate cut among policymakers.
Sterling fell 0.3 per cent to $1.246 and was 0.2 per cent lower at €1.161.
Financial markets more pessimistic than Bank of England, Bailey indicates
13:17 , Andy Gregory
Andrew Bailey has indicated that the financial markets are more pessimistic about the path for lowering interest rates than the Bank of England.
“With the progress we’ve made, to make sure inflation stays around the target, it is likely that we’ll need to cut bank rates in the coming quarters, possibly more so than is currently priced into markets,” he said.
The Bank governor said the committee has “no preconceptions” about how far and how fast it can lower interest rates, and it make a judgment based on the economic data it sees before each meeting.
Visualised: How have interest rates changed over time?
12:58 , Andy Gregory
The below graph shows how interest rates have changed over the past decade:
Bank has not ruled out cutting rates next month, says governor
12:49 , Andy Gregory
The Bank of England has not ruled out cutting rates at its next Monetary Policy Committee decision.
Andrew Bailey, governor of the Bank, said that upcoming economic data would be key to helping the MPC decide whether to cut rates on 20 June.
He said: “Before our next meeting in June, we will have two full sets of data – for inflation, activity and the labour market – that will help us in making that judgement afresh.
“But, let me be clear, a change in bank rate in June is neither ruled out nor a fait accompli.”
Full report: Bank of England holds base rate for ninth consecutive month
12:20 , Andy Gregory
The Bank of England has kept interest rates on hold at 5.25 per cent for the ninth month in a row.
My colleague Jane Dalton has more in this report:
Bank of England holds interest rates at 5.25% despite hopes of cut
Inflation will fall to 1.5 per cent within two years, Bank of England forecasts
12:14 , Andy Gregory
The Bank of England has projected that inflation will fall more than previously thought over the coming years – dropping below its 2 per cent target to 1.5 per cent in 2026.
Headline CPI inflation is expected to fall below the Bank’s 2 per cent target between April and June, but rise again to 2.6 per cent in the second half of this year as the impact of recent drops in energy prices fades.
In the longer term, the Bank dropped its projections for CPI inflation to 2.25 per cent for 2025 and 1.5 per cent in 2026, down 0.25 and 0.5 percentage points respectively on the Bank’s February estimates.
The projection came in the Bank’s May Monetary Policy Committee (MPC) report, which signalled optimism from recent falls in retail inflation. The report said persistently high interest rates had helped push headline inflation down.
Bailey signals optimism that Bank could soon cut rates
12:10 , Andy Gregory
Governor Andrew Bailey has signalled optimism that the Bank of England could soon cut rates.
The Bank’s Monetary Policy Committee voted by a majority of seven to two to keep rates unchanged – with members Dave Ramsden and Swati Dhingra voting to cut rates by 0.25 percentage points.
Mr Bailey said: “We’ve had encouraging news on inflation and we think it will fall close to our 2 per cent target in the next couple of months.
“We need to see more evidence that inflation will stay low before we can cut interest rates. I’m optimistic that things are moving in the right direction.”
The MPC indicated it is still looking for more progress on factors including services inflation and wage growth, which have remained persistently high at about 6 per cent, before cutting rates.
Bank of England expects economy to grow by 0.5% this year
12:08 , Andy Gregory
The Bank of England said it expects the UK economy to grow by 0.5 per cent this year and 1 per cent in 2025 – slightly higher than previous predictions.
Breaking: Bank of England holds rates at 5.25 per cent
12:01 , Andy Gregory
The Bank of England has opted to keep interest rates at a 16-year high of 5.25 per cent – confounding hopes of the first base rate cut since 2020.
We’ll bring you more updates here as we get them.
BoE chief unlikely to give clear signal on when interest rate cut could come, economist predicts
11:08 , Andy Gregory
Bank of England chief Andrew Bailey is unlikely to give a clear signal on exactly when the bank’s first interest rate cut since 2020 might come – but focus will be on what guidance he does give and if more than one member of the Bank’s Monetary Policy Committee votes for a cut this time around, according to Pimco economist Peder Beck-Friis.
“We know from history that policy meetings may create some volatility,” Mr Beck-Friis said.
“What is also interesting is that we have come from a few years where monetary policy has been very correlated globally … but as the pandemic shocks fade I think it is natural that we see some divergence,” he added – pointing to how Sweden and Switzerland had already cut rates while the US may need to wait longer.
Pound falls against US dollar
09:23 , Andy Gregory
The pound edged lower against the US dollar this morning ahead of the Bank of England’s policy meeting, with the central bank expected to hold rates steady but flag when it intends to lower the cost of borrowing.
According to LSEG data, money markets are pricing in an almost 95 per cent chance that the Bank will hold its benchmark interest rate at 5.25 per cent – the highest since 2008. But investors will be watching for signs of when the first interest rate cut in four years will come as inflation falls.
Markets now see a 56 per cent chance of such move in June – when the European Central Bank has already signalled it will reduce borrowing costs, and a greater chance of 72 per cent of a BoE rate cut in August.
London stocks waver ahead of Bank of England announcement
08:40 , Andy Gregory
London stocks wavered this morning as investors turned cautious ahead of the Bank of England’s interest rate decision – while energy shares gave a boost to the benchmark index.
As of 7:17am, the blue-chip FTSE 100 edged up 0.1 per cent at 8,357.85, hovering below its record high of 8,365.28 points. The mid-cap FTSE 250 edged lower by 0.1 per cent.
The pound slipped against the US dollar and the UK’s benchmark 10-year gilt yield was at 4.155 per cent ahead of the decision.
Investors avoided big bets ahead of Threadneedle Street’s interest rate decision due at 11am, where the central bank is widely expected to keep borrowing costs steady.
Bank of England to shed more light on its predictions for the economy today
06:00 , Maryam Zakir-Hussain
The Bank of England will shed more light on its predictions for the economy and the path of interest rates when it publishes the latest Monetary Policy Report alongside the rates decision today.
Meanwhile, the central bank in the US, the Federal Reserve, said on Wednesday it was keeping its key interest rate at the same level and noted a “lack of further progress” towards lowering inflation.
It means rates could stay higher for longer until there is firmer evidence of price rises easing, its chairman Jerome Powell suggested.
04:00 , Maryam Zakir-Hussain
Andrew Goodwin, chief UK economist for Oxford Economics, said: “The data published in mid-April for services inflation and private sector regular pay growth has likely extinguished any remaining hopes of a move in May.
“Though both measures have continued to fall, progress has been slightly slower than the MPC anticipated, and they are currently running marginally higher than the forecasts published in February’s Monetary Policy Report.”
He said it is likely to be a “close call” on whether the MPC decides to cut rates in June or August.
02:00 , Maryam Zakir-Hussain
Higher interest rates are used as a tool to control inflation, which has fallen sharply in recent months.
The latest official figures showed that Consumer Prices Index (CPI) inflation slowed to 3.2% in March, as it edges closer to the Bank’s 2% target.
But economists think the Bank’s policymakers will want to hold out until they are more convinced that inflationary pressures have eased.
Mapped: Which areas worst hit by mortgage rate hikes as homeowners ‘forced to move’
Thursday 9 May 2024 00:00 , Maryam Zakir-Hussain
Homeowners coming off fixed rate mortgages faced huge rises in their monthly payments, latest figures have revealed, with the costs severely biting into household disposable income.
With the Bank of England base rate rising to 5.25 per cent in the summer of last year, families faced soaring mortagage rates with the average two-year fixed rate reaching 6.9 per cent.
The new rates meant many homeowners, especially those with large mortgages still to pay, faced challenging increases in monthly payments.
Mapped: Areas worst hit by mortgage rate hikes as homeowners ‘forced to move’
Bank of England not yet ready to cut UK interest rates, experts say
Wednesday 8 May 2024 21:57 , Maryam Zakir-Hussain
UK borrowers eager for costs to come down may have to wait a little longer before interest rates take a dip.
The Bank of England’s Monetary Policy Committee (MPC), which sets the level of UK interest rates, will announce its latest decision on Thursday.
However, economists are widely expecting the committee to keep rates at the current level of 5.25 per cent, which it has been held at since August last year.
Bank of England not yet ready to cut UK interest rates, experts say
Wednesday 8 May 2024 19:18 , Maryam Zakir-Hussain
Philip Shaw, chief economist at Investec, said: “This broad direction illustrates that collectively the committee is moving gradually towards a rate cut.
“It seems unlikely though to be ready to bite the bullet just yet and the Bank rate looks set to remain on hold at 5.25% for the sixth consecutive meeting.”
He added that it is possible that a second member of the MPC will switch to the “easing camp” and vote for a cut on Thursday.
‘Too early’ for economists to cut rates, economists predict
Wednesday 8 May 2024 17:30 , Maryam Zakir-Hussain
Economists think the Bank of England’s policymakers will want to hold out until they are more convinced that inflationary pressures have eased.
Laith Khalaf, head of investment analysis at AJ Bell, said: “It is almost certainly too early for the Bank of England to pull the trigger on a rate cut right now, especially against the backdrop of a more hawkish US central bank.”
The US Federal Reserve said last week it was keeping its key interest rate at the same level and noted a “lack of further progress” towards lowering inflation.
It means rates could stay higher for longer until there is firmer evidence of price rises easing, the Fed’s chairman Jerome Powell suggested.
Mr Khalaf said the Bank is also likely to be influenced by the European Central Bank, which is widely expected to cut rates in early June.
“The other important factor is more inflation readings for April and May, where CPI could get very close to, or possibly even hit, the Bank’s 2% target,” he added.
“The closer the inflation dial gets to 2%, the greater the pressure on the Bank of England to take its foot off the brake and cut rates.
“Markets currently think it’s a coin toss whether we get a UK rate cut in June, but this rises to a three in four chance priced in by August.”
The housing market has turned – so what does that mean for buyers and sellers waiting to make a move?
Wednesday 8 May 2024 16:29 , Maryam Zakir-Hussain
House prices are down and mortgage costs are up, writes James Moore. So how long will buyers and sellers need to wait before the market shows signs of life?
Britain’s housing market has turned hostile again, at least for sellers. The latest Nationwide index showed a surprise 0.4 per cent fall in April, the second month-on-month decline in a row.
A rival index produced by Halifax recorded a 1 per cent month-on-month fall in March, with the next update due next week. These indices can be volatile, but another fall would now be the betting favourite.
Read more here:
House prices are falling – but what does it mean for the future market?
Improving the economy may limit a Tory wipeout, but it won’t save Rishi Sunak
Wednesday 8 May 2024 15:47 , Maryam Zakir-Hussain
Thanks to the Liz Truss mini-Budget disaster, the Conservatives can no longer claim to be the party of economic competence, writes Andrew Grice. But an election campaign based on the economy is still their best hope of avoiding annihilation:
Improving the economy will not save Rishi Sunak
Pay growth and services sector inflation remain stubborn
Wednesday 8 May 2024 15:45 , Maryam Zakir-Hussain
Interest rates are used as a tool to help bring down UK inflation, which has fallen sharply from the highs hit in 2022 when energy costs spiked and the cost-of-living crisis was at its peak.
The rate of Consumer Prices Index (CPI) inflation fell to 3.2 per cent in March, according to the latest official figures.
But experts suggested that two key economic indicators for the Bank of England – pay growth and services sector inflation – have remained more stubborn.
Average wages continued to increase faster than the rate of inflation last month.
Bank of England not yet ready to cut UK interest rates, experts say
Wednesday 8 May 2024 15:43 , Maryam Zakir-Hussain
UK borrowers eager for costs to come down may have to wait a little longer before interest rates take a dip.
The Bank of England’s Monetary Policy Committee (MPC), which sets the level of UK interest rates, will announce its latest decision on Thursday.
However, economists are widely expecting the committee to keep rates at the current level of 5.25 per cent, which it has been held at since August last year.
This means that there could still be some time before the pressure of the cost of living begins to ease.
Bank of England not yet ready to cut UK interest rates, experts say
Fewer things are more comforting than a crackling fire on a chilly day, but what happens when your chimney needs a little TLC? Repairs generally cost between $160 to $750, with an average repair running around $455, according to HomeAdvisor. But the amount you end up paying will depend on several factors such as the type of repair needed, your chimney’s materials, and labor costs.
Even if you only light your fireplace for part of the year, you’ll want to fix any chimney problems as soon as you can. A damaged chimney could increase the risk of a fire or prevent toxic gasses from passing safely into the air outside.
Here’s a closer look at common chimney repair costs so you can plan accordingly.
Factors That Impact Chimney Repair Cost
If a chimney is well maintained, you can expect it to last for 50 to 100 years. Still, it’s a good idea to carve out space in your household budget for occasional maintenance and repairs. When you’re planning how to pay for the fixes, keep in mind that several different factors can impact your chimney repair costs.
Type of Repair
The type of repair can impact the overall cost of a project. For example, capping repair usually involves replacing the very top cap on your chimney. This type of project typically costs between $150 to $300, according to HomeAdvisor.
Another common repair is fixing the mortar and bricks in a chimney. The job might entail tuckpointing, which incorporates two different mortar colors to make the chimney look newer. Masonry chimney repair costs usually cost between $300 and $1,500, while prefab chimneys cost less because they have fewer components. The job typically costs between $250 and $1,200.
Lining repair involves fixing the chimney liner, which, when cracked, can pose a fire risk. Chimney liners cost between $625 to $7,000, with a national average of $2,500.
Recommended: What Are the Most Common Home Repair Costs?
Type of Chimney
Chimney types vary by material, and this can impact how much a repair costs. Four common types of chimneys include brick, stucco, metal, and prefabricated.
Depending on how much damage there is, brick chimneys cost $175 to $1,000 on average to repair, though you can expect to pay more for more significant work. If you’re fixing a metal and prefabricated chimney, plan on paying in the neighborhood of $200 to $1,200, depending on how extensive the damage is.
Have a stucco chimney? You’ll likely need to pay more to have it repaired. Projects typically run between $570 to $1,920, though bigger jobs can run as high as $4,200.
Labor
Professional chimney repairs usually cost between $50 and $200 per hour. That said, the more damage there is, the harder the damaged area is to reach, and the more time a project requires, the more you may end up paying in labor costs. 💡 Quick Tip: With home renovations, surprises are inevitable. Not so with SoFi home improvement loans. There are no fees required, and no surprises.
Additional Costs
A repair may not be the only cost you encounter. Chances are, you might also pay for routine chimney inspections, chimney cleaning, ongoing maintenance, and permits.
Chimney Inspection
Whether you’re buying a fixer upper or renovating your current home, you should plan on having your chimney inspected by a professional once a year. The condition a chimney is in determines the type of inspection it needs. There are three levels of inspection:
• Level one inspection: A level one inspection is an annual routine inspection and typically costs between $100 and $950.
• Level two inspection: A level two inspection goes a step further to include a more extensive investigation into potential structural issues caused by recent damage. It costs between $200 and $1,000.
• Level three inspection: A level three inspection looks at every part of a chimney, inside and outside, which may require taking out walls or portions of the chimney. It costs between $500 and $5,000.
Chimney Cleaning
Cleaning a chimney typically runs between $120 and $390, or an average of $250. If your chimney has not been maintained well, there may be heavy creosote buildup or other damage. This could lead to a higher clean-up bill of up to $5,000.
Ongoing Chimney Maintenance
All chimneys need regular maintenance. Depending on the type of upkeep required, you may pay for a simple cleaning (an average cost of $250). But if a chimney repair contractor finds that your chimney restoration needs more attention, you could pay more.
Permits and Related Fees
Once you find a contractor and finalize your plans, work can begin. Keep in mind that before constructing or changing the outside dimensions of a structure, your contractor will need to secure a building permit. A building permit generally costs $50 to $300 for small jobs.
Types of Chimney Repairs
From the crown to the flashing, we’ll look at the various parts of the chimney and what it might cost to fix each one.
Stack Repair
The chimney stack is the part of the chimney that appears above the roof. Chunks of missing masonry, crumbling brickwork, and visible cracks can signal that your chimney stack needs to be repaired.
Mortar Repair
Mortar acts as a buffer between the bricks in a chimney. But that buffer can crack and deteriorate from movement and pressure, so pay attention to how your mortar looks from year to year.
Repair could involve repointing and/or tuckpointing. Repointing means removing and replacing damaged mortar joints, while tuckpointing uses two different colors of mortar to make the mortar joints look different.
Crown Repair
The crown is the top part of the chimney and prevents rainwater from getting into your chimney. Typically made of concrete, the crown should be checked for visible cracks, deterioration, wall damage, and pooling water.
Cap Repair
Chimney caps, usually made of steel or copper mesh, sit on the crown at the very top of the chimney. The cap covers the flue, or the duct that allows smoke to leave the chimney. Caps also keep rainwater, animals, and debris from entering the chimney. Missing tops, rusted screens, creosote accumulation, and screen holes can all indicate that your chimney cap needs attention.
Foundation Repair
Chimneys often have their own foundations, but they sometimes settle. This could allow moisture, critters, and other items to enter your home. Look for a crumbling foundation, which might also present fire hazards and falling bricks and mortar.
Liner Repair
A chimney liner, or flue liner, is the vertical passage located inside your chimney that carries fumes to the outdoors. Similar to an exhaust pipe, the flue keeps wasteful gasses from spreading into your chimney cavity.
There are some signs that yours may need a replacement, including finding broken shards and flakes of parts of your chimney and smoke in your home. It’s a good idea to consider replacing your chimney liner if it’s older. Less-expensive models should last up to five years, while a well-constructed liner can usually be counted on for up to 20 years.
Wood Rot Repair
Wood rot can compromise your home’s structural integrity and affect any part of the chimney that has wood in it: the crown, cap, or flue liner. Indications of wood rot might include discoloration or staining, a musty smell, cracks in the wood, and evidence of pests.
Smoke Chamber Repair
The smoke chamber refers to the part of the chimney located just above the damper and connects the firebox to the flue. It guides smoke from a fire up into the flue and out of your home. Since many smoke chambers contain steps, gaps, and holes, they can contain flammable creosote and soot buildup.
Flashing Repair
The flashing of a chimney joins the roof to the chimney and is made of aluminum, steel, copper, vinyl, or PVC. The flashing should last 30 years. But if there’s damage, you could end up with leaks in the roof due to rusting and corrosion, animals, loose caulk and gaps, and wear and tear.
Flue Repair
A flue is any open, vertical part of the chimney that lets smoke escape. (Don’t confuse this with the chimney liner, which lines the flue.) Signs the flue needs attention may include broken shards and flaking and smoke in your home.
Cricket Repair
A chimney cricket, also called a roof cricket, sits behind your chimney and looks like a tiny peaked roof. It juts off the main roof and sits directly against the backside of the chimney to divert water from the masonry. Water stains on the ceilings or walls, rafters near a chimney or damaged mortar and bricks or rotten wood can identify whether the chimney cricket is working or not — or if you need a chimney cricket and don’t have one. (Tip: Chimneys that are 30 inches or larger need a cricket.)
Brick Replacement
Brick replacement may involve replacing just a few bricks — or redoing the entire chimney. Note that if the bricks are in areas that are hard to reach, a professional may charge more for the job.
Siding Repair
If you have a chimney made of siding, it can be at risk for rotting, swelling, and deterioration. Even if it looks good from the ground, a “diseased” chimney could be rotten and cause water to enter your home through the roof or ceiling.
Repairing vs Replacing a Chimney
The extent of your chimney’s damage determines whether you should have it replaced or simply repaired. However, there are some clear signs that indicate you may need to completely replace your chimney:
• Large cracks in the bricks
• White streaks on the bricks
• Spalling bricks (bricks falling down)
• Tilting
Even if some of those indications are present, it’s a good idea to consult with a professional to know exactly what to do next about your fireplace chimney repair.
Signs You Need a Chimney Repair
Indications you need a chimney repair include cracks that appear, smoke blowback, leaks, leaning, or spalling bricks. Let’s walk through what these might mean.
Cracks
Cracks in the chimney’s masonry can signal that it needs attention. Cracks can lead to gas seeping into your home, which can increase the risk of carbon monoxide poisoning. Excess moisture, earthquakes, or other weather events; hail; acidic decay; wind; and hot or cold temperatures usually cause cracks to appear.
Smoke Blowback
Smoke blowback creates a safety and health hazard. Not only could your house sustain a fire, but you could also face carbon monoxide, volatile organic compounds, polycyclic aromatic hydrocarbons, and other pollutants in your home. There are several causes for smoke blowback, including a blockage in the chimney or even a home that’s too well insulated.
Leaks
Chimney leaks are a common problem. When your chimney drips water or you see moisture in the fireplace or surrounding walls, you may also see attic and wall damage. The chimney itself may have a leak, or the roof may leak. For example, the chimney cap or crown may be damaged, bricks or mortar may have issues, the flashing may not be working properly, or condensation may have built up in the chimney.
Leaning
Exposure to all sorts of weather can cause the mortar joints in a chimney to decay. This causes bricks to loosen and the chimney to lean. Other reasons for leaning include a lack of footings and shifting soil. A leaning chimney doesn’t just look bad — it can also pose a safety risk and may even collapse.
Spalling Bricks
Spalling brick refers to bricks that flake, pit, or crumble and fall away from the masonry. Small cracks usually start and grow larger until the brick completely deteriorates. Improper mortar, weather, improper insulation, non-breathable masonry sealants, cleaning with a pressure washer, and impact to the bricks can all cause spall. Spalling poses a safety risk — there’s a possibility the structure collapses and damages the rest of the roof.
Shaling Tiles
Have you noticed pieces of flue tiles accumulating at the bottom of your chimney? This may be the result of shaling, which is a sign that your flue tiling is damaged. A professional can use special equipment to confirm whether there’s an issue, identify the problem spot,and offer potential solutions. 💡 Quick Tip: Loans typically offer lower interest rates than credit cards. Consider a SoFi home improvement loan to fund your next renovation.
Can I Repair My Chimney Myself?
Depending on the issue, fixing a chimney can take a big bite out of a homeowner’s budget, but there are several ways to finance the cost of chimney repair. For instance, you may decide to dip into emergency savings, use a credit card, take out a personal loan, or turn to your homeowners insurance.
Or, depending on your situation, it might make sense to explore a cash-out refinance, a home equity line of credit (HELOC), or consider emergency home repair financing options. As you make your decision, it’s a good idea to compare the interest rates and the pros and cons of each type of financing.
You may also be tempted to attempt to tackle the work yourself and save some money in the process. Though many home improvement projects may be appropriate for the DIY-er, chimney work is not one of them. You assume serious risks when completing a chimney repair yourself — the same kinds of risks you’d face repairing a roof. Even if you can overcome those risks, you’ll still have to know how to repair the chimney. And certain tasks, such as a complete chimney replacement, require advanced knowledge of the mechanics of a chimney.
Recommended: How to Pay for Emergency Home Repairs, So You Can Move on ASAP
The Takeaway
A well-maintained chimney is designed to last for decades, but that doesn’t mean it won’t require the occasional repair or maintenance. Repairs typically cost between $160 to $750, though that price depends on a range of factors, including the type of chimney you have, the work being done, and labor costs. But chimney upkeep is an important line item to include in the budget because there are potential safety risks involved when repairs aren’t made.
When it comes to financing chimney repairs, homeowners have several options, including homeowners insurance, dipping into an emergency fund, and taking out a personal loan.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.
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FAQ
When should I replace my chimney?
You may never need to replace your chimney as long as you live in your home, since chimneys can “live” up to 100 years. However, if you live in an old home or can see issues with your chimney, consult a chimney repair contractor, who can determine whether it needs to be replaced.
How often should I clean my chimney?
The National Fire Protection Association (NFPA) suggests having your chimney cleaned and inspected once per year by a chimney sweep. You should also have your chimney swept at least once per year. A professional can ensure that everything is in working order.
What qualifications should I look for in a chimney repair contractor?
Hiring a professional with the right credentials is important, so look for certifications by the National Fireplace Institute (NFI), Chimney Safety Institute of America (CSIA), and Certified Chimney Professionals (CCP). Check a chimney repair contractor’s Better Business Bureau (BBB) rating. Ask for a portfolio and recommendations, and confirm that the company is insured.
How do I compare quotes from different chimney repair contractors?
Get several quotes from various contractors in your area and compare them apples to apples. The cheapest one may not be the best fit for the job. For example, one contractor may offer a more thorough repair than another for, say, brick chimney repair costs. Ask for a list of services and a detailed list of the costs involved before you decide on the contractor. It also doesn’t hurt to ask friends and neighbors for recommendations.
Are there any permits or inspections required for chimney repairs, and how much do they cost?
A building permit typically costs $50 to $300 for small jobs, though it may depend on where you live. Once you find a contractor, they should be able to answer your questions about the costs of a building permit.
Will my homeowner’s insurance cover the cost of chimney repairs?
If your home is damaged by a covered loss, your insurance will cover the cost of chimney repairs. For example, your insurance will likely provide coverage if lightning strikes your chimney and ruins the brick and mortar. However, if your chimney has been neglected and causes a fire in your living room, your homeowner’s insurance may not cover the damage. Ask your insurance carrier for more information about your specific situation.
How can I finance the cost of chimney repairs?
Consider a variety of different types of financing, from using your credit card to taking out a personal loan from a lender (such as your mortgage lender). Also consider emergency home repair financing options, a cash-out refinance or a home equity line of credit (HELOC). Compare the interest rates, pros and cons of each type of financing, to determine which type of financing works best for you. For example, if you know you will have a repointing chimney cost on your hands, consult with at least five contractors and get prices, then ask your bank or credit union for more information about financing options.
Are there any tax breaks available for chimney repairs?
Generally, home repairs, such as fixing a broken chimney, are not tax deductible. However, a home improvement, such as adding a chimney to your house, may be tax deductible. Check with an accountant for more information.
How can I ensure my chimney repair project stays within budget?
Put together a budget so you know exactly how much you can afford to spend on your chimney repair. Keep in mind that the chimney repairs cost could run you between $160 to $750, with an average repair cost of $450, to fix your chimney. Chimney rebuild costs will likely cost the most. Check with an experienced contractor in your area to learn about your project’s costs, and be sure to get a list of costs ahead of time.
What are the risks of not repairing my chimney?
Leaving chimney issues unchecked can result in a number of safety hazards, including fatal fires, carbon monoxide poisoning, and other toxic chemicals. To help you spot and address problems early on, consider getting an annual inspection recommended by the NFPA. A professional chimney inspection could uncover a chimney repair problem you can’t see from your living room or from the ground.
Photo credit: iStock/arak7
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