Homeowners Tap Equity as Refinancing Shifts

Cash-out refinances now dominate refinance activity as borrowers seek access to home equity rather than lower rates.

Updated on Nov. 9, 2026 in Residential

Gouache-painted editorial illustration of a house-shaped keyhole cut into an ochre wall with brass keys resting below, suggesting homeowners drawing on home equity. — Cash-out refinancing now dominates the refinance market as homeowners tap tappable equity averaging $204,000 per borrower, ICE data show. AI Illustration. Upload story photo >

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Tappable equity rose 1.2% to an average of $204,000 per borrower, according to ICE data. Cash-out refinances accounted for 75% of refinance-related servicing attrition in the third quarter as rate-and-term refinances largely disappeared.

Why it matters

With 30-year fixed mortgage rates above 7%, most refinance activity is driven by borrowers seeking cash rather than interest savings. The shift signals that homeowners are relying on accumulated equity while the housing market remains constrained.

ICE reported 2.4 million equity millionaires, up 6% year over year, with cash-out refinances making up about one in seven rate locks in recent weeks. Overall servicer retention for refinancing borrowers fell to 27% in the third quarter, while only 15% of 2019-or-earlier cash-out borrowers were retained.

The players

ICE

Intercontinental Exchange is a major operator of financial markets and mortgage data services that tracks housing equity and lending trends across the United States.

The details

Cash-out refinances are being used to tap equity as rate-and-term refinances have largely disappeared. Purchase loans made up roughly 80% of rate locks in recent weeks, showing the market is dominated by buyers rather than refinancers.

Early October: 30-year fixed mortgage rates exceeded 7%.
Third quarter: Cash-out refinances drove 75% of refinance servicing attrition.
Prior quarter: Servicer refinance retention was four points higher.

Market Landscape

The shift from rate-and-term to cash-out refinancing continues a pattern that began when mortgage rates rose sharply in 2022, locking many owners into their existing loans. Borrowers now using equity rather than chasing lower rates reflects how the post-2022 rate environment has reshaped refinancing in the United States.

Homeowners considering a cash-out refinance face loan costs well above recent rates, so extracting equity now means accepting a higher monthly payment. Borrowers with lower-rate mortgages may find that keeping their existing loan costs less than refinancing into today's market.

The takeaway

Homeowners weighing a cash-out refinance should compare the new rate and closing costs against the equity they need. Using equity sparingly keeps long-term housing costs manageable.