Home Equity Lending Climbs as Borrowers Tap Equity

Home equity and HELOC originations rose year over year in the second quarter as homeowners avoided costly mortgage refinancing.

Updated on Nov. 5, 2026 in Residential

Gouache-painted editorial illustration of a simple house with its rooftop partly open, revealing stacked warm blocks inside, one lifted out, in muted ochre and sage tones. — Home equity and HELOC originations rose 10.1% and 20.3% year over year in the second quarter as homeowners avoided costly mortgage refinancing. AI Illustration. Upload story photo >

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Home equity originations rose 10.1% year over year to 757,000 in the second quarter, while HELOC originations climbed 20.3%. Refinance volume also grew about 40%, as rates remained elevated.

Why it matters

Homeowners are increasingly pulling cash from existing equity instead of refinancing their primary mortgages, which lets them keep their current low-rate first-lien loans. The trend reflects how elevated interest rates are reshaping how Americans borrow against their homes.

Mortgage originations rose 12.8% to 1.5 million in the second quarter, with the refinance share climbing to 21.5% from 17.4% a year earlier. The 30-year fixed mortgage rate stood at 7.24% last week, more than a percentage point above the same week last year.

The details

HELOCs accounted for more than half of all home equity activity in the second quarter, offering flexible access to equity while preserving existing first-lien financing. Rate-and-term refinances jumped nearly 60%, even as borrowers sought alternatives to full refinancing.

Second quarter 2026: home equity and HELOC originations rose year over year.
Third quarter 2026: the serious delinquency rate reached 1.64%.

Housing Market Shift

The refinance share of total mortgage originations rose to 21.5% from 17.4% a year earlier, signaling renewed borrowing activity. Home equity products now account for a growing share of how homeowners access cash as elevated rates persist.

Homeowners considering cash-out options can compare HELOCs against refinancing, since current 30-year fixed rates sit above last year's levels. Borrowers with low existing mortgage rates may find tapping equity through a HELOC less costly than replacing their loan.

The takeaway

Homeowners weighing access to cash should compare HELOC options against full refinancing, given that elevated rates are making equity-based borrowing more common.