home equity loan question

[crackerjack]

I have a choice between a variable or fixed interest rate on a 100,000 home equity loan and I don't know enough about the fluctuation of the prime rate to make a sound decision. The variable rate is tied to the prime rate. Here are the details:
I took out a home equity loan in Jan 2007. I had 140,000.00 avail to me and took 100,000. I currently owe 97,586.00 on the loan. At the time of the loan I got to choose between a fixed rate of 7.24 or a variable rate of 7.74. I took the fixed rate. Now the variable rate is 4.49 (I am told that I get a variable rate of .51 below prime). I can change it over to the lower variable rate, but if I want to go back to fixed the current rate is 8.44. Given the economic climate and the likelyhood of the prime rate staying low....or not....should I change to the variable rate?

Thanks,

crackerjack

[maat55]

That's a lot of money to risk in an variable rate. It could jump 2% if Obama wins.

[JinCO]

I would go with the variable rate and keep your payments the same as they are now or increase them slightly if you can to reduce the principal. Even if the prime rate goes go up by 2% you would still be ahead with the variable. I think the prime will start to inch up after the election but I would be surprised if it went up by more than 2% in the next 2 or 3 years.

[cooliemae]

I would stick with the fixed rate. Like maat55 said, "That's a lot of money to risk on a variable rate." I also like knowing exactly what my payments are going to be.

[mrpaseo]

My advise, ALWAYS go fixed.

Just my 2 pfennings worth,
Ray

[jIM_Ohio]

depends on the term- will you repay fixed rate in 10 years, 15, or 30?

would the variable rate change you term?