Here's how much home equity homeowners have to borrow now (and how to access it)

Published: Tuesday, March 17, 2026 at 4:30 pm

Homeowners Tap into Home Equity Amid Economic Uncertainty

As economic uncertainty persists, with interest rate cuts seemingly on hold, many Americans are seeking affordable ways to access funds. With personal loan and credit card rates exceeding 10% and 20% respectively, homeowners are increasingly looking to their home equity as a potential solution.

A recent report indicates that homeowners collectively hold nearly $17 trillion in total equity, with approximately $11 trillion considered "tappable." This "tappable equity" refers to the amount that can be borrowed while maintaining an 80% or lower loan-to-value ratio. This substantial sum presents a significant opportunity for homeowners seeking additional funds. However, it's crucial to remember that the home serves as collateral, and foreclosure is a potential risk if the loan isn't managed responsibly.

Two primary options for accessing home equity are highlighted. Cash-out refinancing is generally not recommended due to the potential of exchanging a lower mortgage rate for a higher one. Reverse mortgages are limited to those aged 62 and older.

The first option is a Home Equity Line of Credit (HELOC). HELOC interest rates have fallen, currently averaging around 7.18%. This makes it an affordable borrowing option, potentially becoming even cheaper if interest rates are cut in the future. Interest paid on HELOCs is also tax-deductible if used for eligible home projects. Many lenders offer interest-only payments during the initial draw period, making starting payments lower.

The second option is a home equity loan. Unlike a HELOC, a home equity loan provides funds in a lump sum, with immediate repayment required. With an average rate of 7.84%, it offers a fixed rate, providing stability in an uncertain market. Home equity loans also offer the same tax deduction benefits as HELOCs.

BNN's Perspective:

While accessing home equity can provide much-needed financial relief, homeowners must carefully weigh the risks. Both HELOCs and home equity loans offer attractive features, but borrowers should thoroughly assess their financial situation and consult with a lender to create a responsible borrowing plan. Prudent financial management is key to avoiding potential foreclosure.

Keywords: home equity, HELOC, home equity loan, interest rates, borrowing, financing, homeowners, loan, tax deduction, foreclosure, refinancing, reverse mortgage

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