Homeowners Now Hold Record Home Equity
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Mortgage holders had a record $18 trillion of equity in the second quarter of 2026, ICE’s August Mortgage Monitor found, and $11.7 trillion of it could be borrowed while leaving a 20% cushion.
The gap between a HELOC and a new mortgage has nearly closed. In FreeRateUpdate’s lender network, the lowest advertised HELOC interest rate, on a loan with its own fees and repayment terms, was about one and three eighths percentage points above the lowest 30-year fixed purchase rate on August 12, and on October 1 it was three tenths of a percentage point higher.
Only one of those rates really moved. The lowest 30-year went from 5.623% to 6.75%, and the lowest HELOC from 7% to 7.05%. On October 1 that 30-year rate came with 1.532 discount points, and they’re advertised interest rates, not personalized quotes.
| Date | HELOC | 30-year fixed purchase |
|---|---|---|
| August 12 | 7% | 5.623% |
| September 1 | 7% | 5.99% |
| September 18 | 7.05% | 6.25% |
| September 28 | 7.05% | 6.5% |
| October 1 | 7.05% | 6.75% |
What the equity is worth
Take a homeowner who wants $50,000 and already has a first mortgage below today’s rates. By our own math, a loan at the lowest home equity rate in our network on October 1, 7%, paid over 10 years, comes to about $581 a month in principal and interest.
And in this example the homeowner borrows against that equity without touching the first mortgage at all.
