2025 Sees Record Home Equity Withdrawals: $205 Billion Tapped Amid Falling Interest Rates

Key Takeaways

• Homeowners withdrew $205 billion in equity from their properties in 2025, marking the highest level in three years, according to data from Intercontinental Exchange.
• Borrowing costs for home equity loans have come down in recent years, paving the way for more homeowners to tap into home equity.
• Home equity loans are most commonly used for renovations, but they are increasingly being used for debt consolidation.

As home values continue to rise, owners are increasingly finding ways to turn that value into cash, a new report found.

U.S. homeowners withdrew $205 billion against their equity in 2025, marking the highest annual total in three years, according to mortgage data firm Intercontinental Exchange’s (ICE) Mortgage Monitor report for March.

Lower interest rates helped drive withdrawals in 2025, making it cheaper for homeowners to tap into home equity lines of credit, also known as HELOCs.

Why This Matters

When households can convert housing wealth into cash, that can support consumer spending and short-term economic growth, particularly if the funds are used for renovations or to pay down high-interest debt. However, shifting unsecured debt into loans backed by homes makes borrowers more vulnerable in a downturn and could increase foreclosure rates.

“The recent rise in equity-withdrawal activity is primarily the result of lower borrowing costs,” wrote Andy Walden, head of mortgage and housing market research at ICE. “Interest-rate offerings for both cash-out refinances and home equity lines of credit have improved in recent quarters, making it more attractive for homeowners to tap available equity.”

HELOC rates in 2025 fell to around 7%, down from early 2024 when they averaged around 10%, Walden said. For a $50,000 loan, that’s a difference between a monthly payment of under $300 and one of more than $400.

Borrowers are also increasingly turning to options like HELOCs rather than a cash-out refinance, which is when homeowners take out a new mortgage to tap the equity in their home.

The $116 billion in home equity withdrawals in 2025 was the largest volume in 18 years. Overall, homeowners hold nearly $17 trillion in total equity, Walden said, with about $11 trillion of that available for withdrawal.

Borrowers Focusing on Debt

So what are homeowners doing with this money they’re withdrawing? Increasingly, it’s about managing debt.

Mortgage Banking Association data show that home renovations have been the most common reason for home equity withdrawals over the past few years, but the most recent survey results showed that homeowners were increasingly using the money for debt consolidation.

In 2024, 46% of home equity borrowers used the funds for home renovations, compared to 39% who used it to restructure debt. That’s a shift from two years earlier, when 65% of borrowers used their home equity for renovations and just 25% focused on debt refinancing.

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