HELOC activity hits 17-year high
Homeowners are tapping into their equity at the fastest pace in over 15 years, as falling interest rates and record levels of home equity converge to drive a surge in home equity line of credit (HELOC) withdrawals, according to ICE Mortgage Technology’s June Mortgage Monitor report.
The analysis reveals that mortgage holders entered Q2 2025 with a historic $17.6 trillion in home equity, $11.5 trillion of which is considered “tappable,” meaning it can be accessed without reducing the borrower’s equity position below 20%.
Equity withdrawals via second-lien HELOCs rose 22% year over year in Q1, reaching nearly $25 billion — the strongest first-quarter showing since 2008. Overall, borrowers tapped $45 billion in equity during the quarter, including cash-out refinances, marking the highest Q1 total since 2022.
“Equity levels remain historically high, and now we’re seeing the cost of borrowing against that equity drop meaningfully,” said Andy Walden, head of mortgage and housing market research at ICE. “The monthly payment needed to withdraw $50,000 via a home equity line of credit has fallen by more than $100 since early 2024.”
ICE’s McDash Home Equity database shows that the average monthly payment for a $50,000 HELOC dropped from $412 in early 2024 to $311 by the end of Q1 2025, thanks to a 2.5 percentage point decline in average introductory HELOC rates, which dipped below 7.5% in March. If rate-cut projections materialize, HELOC rates could fall into the mid-6% range by 2026, potentially aligning with expected 30-year fixed mortgage rates.
Nearly 48 million mortgage holders currently have tappable equity, with the average sitting at $212,000. On average, mortgaged homes are only 45% leveraged, suggesting significant cushion for further equity-based borrowing.
Despite the uptick, borrowers tapped just 0.41% of available tappable equity in Q1 2025, still below long-term averages. Lenders are responding by sharpening their HELOC pricing strategies. The spread between HELOC rates and the prime rate has narrowed to its lowest point since 2022, making these products even more appealing to rate-sensitive borrowers.
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“In our latest ICE Borrower Insights Survey, roughly 25% of homeowners said they are considering a home equity loan or HELOC in the next year,” ICE president Tim Bowler said in the report. “It’s periods like these — where both demand and affordability trends converge — that represent a critical opportunity for housing finance professionals to earn homeowners’ repeat business.”
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