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Even as home price growth has slowed, the housing boom during the first half of the 2020s means many owners are sitting on substantial equity — and they appear willing to use it.
Homeowners tapped an estimated $47 billion in equity — the difference between their mortgage balance and the property’s market value — during the first three months of 2026, according to a new report from Intercontinental Exchange, a financial markets technology and data company. While down from $49 billion in the final quarter of 2025, the figure marks the highest first-quarter withdrawal figure since 2021.
Home equity lines of credit, or HELOCs, and home equity loans accounted for 54% of withdrawals in the quarter, and the remainder came from cash-out mortgage refinancing, the report shows. Nearly two-thirds of those second-lien borrowers have mortgages that were originated between 2020 and 2022, when average rates were in the 3% to 4% range.
“The housing market continues to be defined by the lock-in effect,” said Andy Walden, head of mortgage and housing market research at ICE, in the report.
“Millions of homeowners are sitting on first mortgages with rates well below current market levels, making second liens and HELOCs an attractive way to access equity without giving up those loans,” Walden said.
Homeowners are sitting on $11 trillion in equity
Rates on a standard 30-year fixed-rate mortgage currently are trending above 6.5%, according to Mortgage News Daily. After the low rates offered from 2020 through most of 2022, rates brushed 8% in October 2023 before trending downward.
The median price of an existing home in the U.S. was $429,300 in May, up 1.3% from $423,700 a year earlier, according to the National Association of Realtors. However, that figure is about 50.8% above the May 2020 median price of $284,600.
The upshot is that there’s an estimated $11 trillion in home equity available to borrowers, according to ICE. And, experts say, accessing it for extra cash can be tempting.
However, “home equity is not free money,” said certified financial planner Joon Um, a tax advisor with Secure Tax & Accounting in Beverly Hills, California.
“With borrowing costs still relatively high, homeowners should make sure the purpose of the loan is strong enough to justify the cost,” Um said.
In other words, the reason for tapping the equity should make sense from a financial standpoint, experts said.
With borrowing costs still relatively high, homeowners should make sure the purpose of the loan is strong enough to justify the cost.
Joon Um
Tax advisor with Secure Tax & Accounting
For example, if the funds are used for repairs or upgrades, “then the money is being spent on capital improvements for your home, which might make sense,” said CFP George Gagliardi, founder and financial advisor with Coromandel Wealth Strategies in Lexington, Massachusetts.
“If it is for vacations or other discretionary expenses, ask yourself if you are now living beyond your means in terms of your income,” Gagliardi said. “You might end up paying many years of interest on that summer vacation.”
Refinancing or getting a second loan
If you do consider tapping your equity, it’s worth knowing the differences in the options available.
A cash-out refinance generally involves refinancing your mortgage and taking out some equity as cash as part of the new loan.
This route involves going through the entire mortgage approval process, as well as paying closing costs — which include things like fees, taxes and title insurance — and typically run 2% to 5% of the new loan, according to Zillow. Lenders may let you roll those costs into the new mortgage, which would mean spreading them out over the life of the loan and paying interest.
However, “a cash-out refinance may be difficult to justify if it means giving up an existing mortgage with a much lower rate,” Um said.
In the first quarter, nearly half of cash-out refis came from borrowers refinancing mortgages originated in 2023 or later, according to the ICE report. Another quarter came from borrowers giving up the low rates they secured between 2020 and 2022 in order to withdraw equity.
Meanwhile, some homeowners choose to keep their first mortgage and instead get a home equity loan, which generally comes with a fixed interest rate and fixed payment amount. The average rate on a five-year home equity loan is 8.12% as of June 3, according to Bankrate. For a 15-year loan, the average is 8.2%. Generally, the longer the loan, the higher the interest rate.
These loans also come with closing costs, although they may be lower than those associated with a first mortgage, according to Bankrate.
What to be aware of with HELOCs
Meanwhile, HELOCs let you tap a line of credit over time as you need the money instead of getting it all at once, as you would with a home equity loan.
While HELOCs may have fewer upfront costs than a home equity loan, they generally come with an interest rate that is variable, so it will move up and down based on a benchmark like the prime rate, which banks use as a basis to set rates on a variety of loans. And, while the Federal Reserve doesn’t control that rate, it is influenced by changes the Fed makes to the so-called federal funds rate.
The average interest rate for a $30,000 HELOC is 7.43% as of June 3, according to Bankrate.
Many HELOCs also have a “draw” period when you can take money out, which often lasts five or 10 years. During that time, you typically are only required to pay the interest on any funds you’ve withdrawn. After that, however, you’ll enter a repayment period of, say, 10 or 20 years, when you’re required to pay both interest and principal. Because of that, your payments will jump if you’ve only been paying interest.
“Make sure the payments fit comfortably in your budget, and remember that your home is the collateral,” Um said.
