Vent: Found out my HELOC interest rate is tied to SOFR, not prime

I was looking through my loan docs for a property in Cleveland last week and noticed something weird. One line said my HELOC adjusts based on SOFR plus 2.5%, not the prime rate like most people talk about. Turns out some banks switched to SOFR after LIBOR ended and nobody told me. I had to dig through a PDF from 2021 to find the fine print. My payments jumped $120 a month this quarter and I had no clue why until now. Has anyone else gotten caught off guard by a SOFR-based adjustment on a personal line?

3 comments

3 Comments

jakel361d ago

Did a buddy of yours end up stuck with the same surprise?

jamie_white1d agoMost Upvoted

Yeah totally, my buddy Dave got burned the same way. He asked for a simple favor, just wanted me to watch his dog for a weekend, and next thing I know I'm stuck feeding this hyperactive beagle for two weeks because he "forgot" his return flight. He kept saying he'd be back Monday, then Tuesday, then Wednesday, and I just kept nodding along like a idiot. It's like once you say yes to one thing, they just keep piling on more stuff and you can't back out without looking like a jerk. I feel your pain man, these surprise commitments sneak up on you and suddenly your whole weekend is shot.

hannahk1913h ago

Wait, hold up. Did you just compare your buddy getting stuck with a beagle for two weeks to someone getting a surprise $120 monthly payment increase on their HELOC? I'm genuinely confused by how those two things are even in the same conversation. One is about a lazy friend and a hyper dog, the other is about getting hit with a hidden interest rate switch that costs you real money. Ngl, I had to read your comment twice because I thought I was missing something. A SOFR surprise is more like finding out your landlord changed the rent structure without telling you, not forgetting to pick up a pet.