U.S. — Home equity originations increased 5.8% year over year to 560,000 in the first quarter of 2026, driven by a 16.8% growth in home equity lines of credit (HELOCs). Homeowners accessed equity while preserving low-rate first mortgages, favoring flexible borrowing options like HELOCs over fixed home equity loans (HELOANs).

The average home equity loan interest rate is 8.14% as of September 2026. In comparison, the average personal loan interest rate is over 12% as of September 2026, and the average credit card interest rate is over 20% as of September 2026.

In April 2024, a 10-year $250,000 home equity loan at an 8.73% interest rate resulted in a monthly payment of $3,130.48. Also in 2025, a 15-year $250,000 home equity loan at an 8.44% interest rate resulted in a monthly payment of $2,453.06.

Minnesota had the highest rate of seriously underwater mortgages at 12.1% in the second quarter of 2026. This was a rise from Minnesota's seriously underwater mortgage rate of 3% in the first quarter of 2026 and 2.6% in the second quarter of 2025. Louisiana had the second highest rate of seriously underwater mortgages at 10.3% in the second quarter of 2026, compared to 11.8% in the first quarter of 2026 and 11.9% in the second quarter of 2025. Vermont had the lowest seriously underwater mortgage rate at 0.9% in the second quarter of 2026.

Louisiana had the lowest share of equity-rich properties at 17.5% in the second quarter of 2026. Minnesota had 20.1% of properties classified as equity-rich in the second quarter of 2026, down from 37.6% in the second quarter of 2025.

The Federal Reserve is likely to implement an interest rate hike in September 2026. The September 2026 Federal Reserve interest rate hike would be the first since 2023. Previous extraction patterns show that 54% of all home-equity extraction came through second liens in the first quarter of 2026.

Timeline

In 2025, a 10-year $250,000 home equity loan at an 8.50% interest rate resulted in a monthly payment of $3,099.64. The share of seriously underwater homeowners was 2.7% in the second quarter of 2025. Minnesota's equity-rich property share was 37.6% in the second quarter of 2025. Louisiana's seriously underwater mortgage rate was 11.9% in the second quarter of 2025.

Approximately $11 trillion in home equity is considered borrowable according to a report released earlier in 2026.

What's New

Additional reporting indicates that homeowners withdrew $29.5 billion through home equity loans and lines of credit in the second quarter of 2026. Nearly 548,000 homeowners tapped a combined $54 billion in equity in the second quarter of 2026. U.S. mortgage holders held a record $18 trillion in home equity in the second quarter of 2026. $11.7 trillion of home equity was classified as tappable in the second quarter of 2026.

Further data shows that 3.2% of U.S. homeowners were seriously underwater on their mortgages in the second quarter of 2026. Approximately 813,000 borrowers owed more than their homes were worth in the second quarter of 2026. Rob Barber stated, "These two measures of home equity strength, the rates of equity-rich and seriously underwater homes, remain healthier than they were prior to 2020." Additionally, 54% of all home-equity extraction came through second liens in the first quarter of 2026.

How Sources Differ

Discrepancies also exist regarding historical rates. Cbsnews.com notes that in 2025, a 10-year $250,000 home equity loan at an 8.50% interest rate resulted in a monthly payment of $3,099.64, while Money.com reports the average home equity loan interest rate is 8.14% as of September 2026. Regarding personal loans, cbsnews.com cites the 2025 10-year loan payment, while Money.com maintains the average personal loan interest rate is over 12% as of September 2026.

For 15-year loans, cbsnews.com states that in 2025, a 15-year $250,000 home equity loan at an 8.44% interest rate resulted in a monthly payment of $2,453.06, while Money.com reports the average home equity loan interest rate is 8.14% as of September 2026. Money.com again contrasts this with the average personal loan interest rate of over 12% as of September 2026.

Detail gaps appear in how sources present current loan specifics. Cbsnews.com provides that a 10-year $250,000 home equity loan at an 8.14% interest rate results in a monthly payment of $3,051.72, while Money.com offers the broader statistic that the average home equity loan interest rate is 8.14% as of September 2026.

Why It Matters

The surge in home equity extraction occurs against a backdrop of record-high total equity but increasing financial strain for a segment of borrowers. With $18 trillion in total home equity and $11.7 trillion classified as tappable, the potential for borrowing remains vast. However, the 44% increase in borrowers owing more than their homes are worth signals a deteriorating position for nearly 813,000 households. This trend is particularly acute in states like Minnesota and Louisiana, where underwater mortgage rates exceed 10%.

The preference for HELOCs over fixed HELOANs suggests homeowners are prioritizing flexibility in an uncertain rate environment, especially with a Federal Reserve interest rate hike likely in September 2026. This would be the first such hike since 2023. While overall equity metrics remain healthier than pre-2020 levels, the movement in underwater and equity-rich rates indicates a shift that warrants monitoring, as noted by industry leaders. The disparity between home equity rates and higher-cost unsecured debt continues to drive borrowers toward leveraging their primary asset.