U.S. mortgage holders carried a record $17.6 trillion in home equity entering the second quarter, with $11.5 trillion considered “tappable” — that is, available for borrowing while maintaining at least a 20% equity cushion — and they are now starting to tap into it, according to ICE Mortgage Technology’s latest Mortgage Monitor report.
The firm’s data show that second lien equity withdrawals increased 22% year over year to nearly $25 billion in the first quarter — the largest first quarter volume in 17 years.
“Equity levels remain historically high, and now we’re seeing the cost of borrowing against that equity drop meaningfully,” says Andy Walden, head of mortgage and housing market research at ICE, in a statement. “The monthly payment needed to withdraw $50,000 via a home equity line of credit (HELOC) has fallen by more than $100 since early 2024. If the Fed moves forward with anticipated rate cuts, borrowing against home equity could become even more attractive in the second half of the year.”
The average introductory rate on second lien HELOCs has declined by 2.5 percentage points in recent quarters, dropping below 7.5% in March.
If current market forecasts hold, HELOC rates could dip into the mid-6% range by 2026 — roughly on par with projected 30-year mortgage rates.
This easing has already translated into lower monthly payments for borrowers. According to ICE’s McDash Home Equity database, the average monthly payment needed to borrow $50,000 dropped from $412 in early 2024 to $311 by the end of the first quarter of 2025.
The opportunity for mortgage lenders is significant: About 48 million U.S. mortgage holders have tappable equity, with the average homeowner sitting on $212,000.
In the first quarter, those borrowers had tapped only 0.41% of available equity.
What’s more, those mortgage holders are only 45% leveraged, which means there is ample cushion for equity access.
“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,” says Tim Bowler, president of ICE Mortgage Technology, 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.”
“As a neutral technology provider dedicated to the success of our lender and servicer clients, we’ve invested heavily in developing an advanced, end-to-end mortgage platform that engages borrowers with timely, relevant offers while keeping costs in check,” Bowler adds. “It’s one of the ways we’re helping our clients remain responsive, serve their communities and retain customers in a changing market.”
Photo: Tosab Photography
