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Even though house price growth has slowed, the housing boom of the first half of the 2020s suggests that many owners have large amounts of equity and are willing to put it to use.
Homeowners tapped an estimated $47 billion in equity (the difference between their mortgage balance and the market value of their property) in the first three months of 2026, according to a new report from Intercontinental Exchange, a financial markets technology and data company. Although down from $49 billion in the final quarter of 2025, this figure is the highest first-quarter withdrawal amount since 2021.
Home equity lines of credit (HELOCs) and home equity loans accounted for 54% of withdrawals in the quarter, with the remainder coming from cash-out mortgage refinances, the report said. Nearly two-thirds of these second-lien borrowers have mortgages originated between 2020 and 2022, when average interest rates were in the 3% to 4% range.
“The housing market continues to be defined by lock-in effects,” Andy Walden, head of mortgage and housing market research at ICE, said in the report.
“Millions of homeowners have first mortgages that are significantly below current market levels, making second liens and HELOCs an attractive way to access equity without surrendering these loans,” Walden said.
Homeowners have $11 trillion in equity
According to Mortgage News Daily, interest rates on standard 30-year fixed-rate mortgages are currently trending above 6.5%. After offering low interest rates from 2020 to most of 2022, interest rates rose by 8% in October 2023 and have since trended downward.
The median price of an existing home in the U.S. in May was $429,300, up 1.3% from $423,700 a year earlier, according to the National Association of Realtors. However, this number is approximately 50.8% higher than the May 2020 median price of $284,600.
The result is an estimated $11 trillion in housing equity available to borrowers, according to ICE. And experts say it may be tempting to access it for extra cash.
But “home equity is not free money,” says Jun Eum, a tax advisor and certified financial planner at Secure Tax & Accounting in Beverly Hills, California.
“With borrowing costs still relatively high, homeowners need to ensure their loan objectives are strong enough to justify the cost,” Umm said.
In other words, the reason for using stocks should make sense from a financial perspective, experts say.
With borrowing costs still relatively high, homeowners need to ensure that the purpose of their loan is well worth the cost.
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For example, if the money is used for repairs or upgrades, “that money could be spent on capital improvements to your home, and that might make sense,” said CFP George Gagliardi, founder and financial advisor at Coromandel Wealth Strategies in Lexington, Massachusetts.
“For vacations and other discretionary expenses, ask yourself if you’re currently living above your means in terms of income,” Gagliardi said. “You could end up paying years of interest on that summer vacation.”
Refinance or take a second loan
If you’re looking to leverage your assets, it’s worth knowing the differences between the options available to you.
A cash-out refinance typically involves refinancing your mortgage and taking out some equity as cash as part of the new loan.
Zillow says this route involves going through the entire mortgage approval process and paying closing costs, including fees, taxes and title insurance, which typically run between 2% and 5% of new loans. Your lender may allow you to roll these costs into your new mortgage. This means you spread the cost and pay interest over the life of the loan.
But “cash-out refinancing may be difficult to justify if it means forgoing an existing mortgage at a much lower interest rate,” Um said.
Almost half of the cash-out refinances in the first quarter came from borrowers who refinanced mortgages originated in 2023 or later, according to the ICE report. The remaining quarter was due to borrowers waiving the low interest rates secured between 2020 and 2022 to exit their stocks.
On the other hand, some homeowners choose to keep their first mortgage and take out a home equity loan instead. Mortgage loans typically have a fixed interest rate and fixed payments. The average interest rate on a five-year home equity loan was 8.12% as of June 3, according to Bankrate. For a 15-year loan, the average is 8.2%. Generally, the longer the loan term, the higher the interest rate.
These loans also have closing costs, but they can be lower than those associated with a first mortgage, according to Bankrate.
What to look out for with a HELOC
A HELOC, on the other hand, allows you to draw on the line of credit over time when you need it, rather than financing it all at once like with a mortgage.
HELOCs may have lower upfront costs than home equity loans, but they typically have variable interest rates, meaning they move up and down based on benchmarks like the prime rate, which banks use as a basis to set interest rates on different loans. And while the Federal Reserve does not control that interest rate, it is affected by changes the Fed makes to the so-called federal funds rate.
As of June 3, the average interest rate on a $30,000 HELOC was 7.43%, according to Bankrate.
Many HELOCs have a “withdrawal” period during which you can withdraw your funds, usually lasting five or 10 years. During that time, you typically only have to pay interest on the funds you withdraw. However, after that, you enter a repayment period of, say, 10 or 20 years, during which you have to pay both interest and principal. Therefore, if you only pay interest, the amount you pay will skyrocket.
“Make sure your payments stay within your budget, and remember that your home is collateral,” says Um.
