According to a report from Intercontinental Exchange, homeowners withdrew an estimated $47 billion in equity in the first quarter of 2026, marking the highest first-quarter figure since 2021, although it represents a slight decline from $49 billion in the previous quarter.
Home equity lines of credit (HELOCs) and home equity loans accounted for 54% of these withdrawals, with the remainder coming from cash-out mortgage refinancing.
The report indicates that nearly two-thirds of borrowers with second liens have mortgages originated between 2020 and 2022, when interest rates were significantly lower, making it attractive for them to access equity without refinancing their existing low-rate loans.
Currently, the average rate for a 30-year fixed mortgage is above 6.5%, which is considerably higher than the rates homeowners secured during the pandemic. Homeowners collectively hold about $11 trillion in equity, prompting financial experts to caution that while accessing this equity can provide cash, it should be done judiciously.
Certified financial planner Joon Um emphasized that homeowners should ensure the purpose of borrowing justifies the costs, especially given the high borrowing rates. For instance, using equity for home improvements may be more justifiable than for discretionary spending.
The article also outlines the differences between cash-out refinancing and home equity loans, noting that cash-out refinancing can involve significant closing costs and may not be advisable for those with lower-rate existing mortgages. HELOCs offer flexibility but come with variable interest rates and potential payment increases after the draw period.
Homeowners are advised to carefully consider their financial situations and the implications of using their home equity as collateral