Cash-out refinances accounted for 59% of all refinance transactions in the second quarter, according to new data published in Intercontinental Exchange’s (NYSE: ICE) August 2025 Mortgage Monitor report, which noted 70% of those borrowers accepted higher interest rates, averaging a 1.45 percentage point increase, in exchange for tapping an average of $94,000 in home equity.
On average, those cash-out borrowers had lower average credit scores (719) and smaller loan balances ($188,000) compared to their rate-and-term counterparts, and they also saw their monthly payments increase by about $590.
The report also found tappable equity hit another record high during the second quarter, borrowers carrying a record $17.8 trillion in total equity, including $11.6 trillion in tappable equity that can be accessed while maintaining a 20% cushion. Roughly 48 million mortgage holders had tappable equity, with the average homeowner holding $213,000 in accessible value.
However, the report also noted the pace of home equity growth has slowed to its lowest rate in two years, which was largely attributable to declining home prices in key Sunbelt and Western markets. Nearly one-quarter of markets experienced at least a 5% drop in tappable equity and about 1% of mortgage holders – roughly 564,000 borrowers – now owe more than their homes are worth.
“Homeowners are actively drawing on record equity with cash-out refinance loans, signaling increased demand despite elevated rates,” said Andy Walden, Head of Mortgage and Housing Market Research at ICE. “Meanwhile, a substantial cohort of people who purchased homes over the last three years are watching on the sidelines for rates to drop so they can refinance into a lower monthly payment.”
Interesting. Wonder what the income level of borrowers is on average?