HELOC Applications Jump 31% as Homeowners Tap Record Equity

Home equity line of credit applications rose 31% in the first two months of 2026 compared to the same period last year, according to data from the Mortgage Bankers Association, as homeowners with substantial equity look for ways to access cash without surrendering low fixed-rate mortgages they locked in during the pandemic era.

The math driving the HELOC surge is straightforward. The average U.S. homeowner with a mortgage holds approximately $299,000 in equity, according to CoreLogic — near the all-time high set in mid-2023. At the same time, roughly 60% of outstanding mortgages carry rates below 4%, making a cash-out refinance at today's rates economically painful even as rates have eased. A HELOC allows homeowners to access that equity without touching their primary mortgage.

Wells Fargo, Bank of America, and Figure Technologies have all reported record HELOC origination volumes in the first quarter. Figure, which operates an entirely digital HELOC platform, said it funded more than $1.2 billion in new lines during January and February combined, up 44% year over year. The company attributed the growth to its five-day funding timeline and entirely online application process.

The most common uses for HELOC proceeds, according to lender surveys, are home renovation projects (41%), debt consolidation (27%), and emergency reserves (18%). Renovation activity has been particularly strong as homeowners who plan to stay in their current properties rather than trade up invest in upgrading their existing spaces. Kitchen remodels, bathroom renovations, and accessory dwelling unit additions are among the most frequently cited projects.

Variable HELOC rates, which track the prime rate, have declined alongside broader interest rate easing. The average HELOC rate currently sits at approximately 8.1%, down from a peak of 9.4% in late 2024. While still elevated compared to fixed mortgage rates, the rate is meaningfully lower than credit card rates, making HELOCs an attractive debt consolidation tool for homeowners who have been carrying high-interest balances.

Lenders are tightening underwriting standards modestly even as demand climbs. Most major banks require a combined loan-to-value ratio below 85% and a credit score of at least 680 for HELOC approval. For homeowners who qualify, the current environment — substantial equity, easing rates, and strong lender competition — represents a favorable window to access flexible financing.