Total originations of open-ended Home Equity Lines of Credit (HELOCs) and closed-end home equity loans increased 7.2% year-over-year during 2024 while total HELOC and home equity loan debt outstanding grew 10.3%, according to the Mortgage Bankers Association’s (MBA) 2025 Home Equity Lending Study.
Last year, roughly 39% of borrowers cited debt consolidation as the reason for applying for a home equity loan, compared to 25% during 2023. Those borrowers who indicated home renovations as their reason for usage dropped to 46% volume, compared to 56% one year earlier.
“With close to $35 trillion of homeowner equity in residential real estate and many homeowners locked into low-rate first mortgages, HELOCs and home equity loans have become the product of choice for many homeowners,” said Marina Walsh, MBA’s vice president of industry analysis. “Lenders in our study expect year-over-year growth of almost 10% for HELOC debt and 7% for home equity loan debt in 2025.”
Walsh added, “While there are additional opportunities in this space for lenders, there are also challenges. For example, just 50% of home equity applications are closing, and turn times are averaging 39 days. Automated valuations and decisioning, integrations with mortgage platforms, and accessible self-service options are a few ways lenders intend to increase efficiency and reduce costs.”
The MBA also noted that lenders expect HELOC debt outstanding to increase 9.8% in 2025 and 9.5% in 2026, while home equity loan debt outstanding is expected to increase by 6.6% in 2025 and 4.1% in 2026.
