Total originations of open-ended Home Equity Lines of Credit (HELOCs) and closed-end home equity loans increased in 2024 by 7.2 percent from the previous year when comparing originators that reported in both years. Total HELOC and home equity loan debt outstanding grew 10.3 percent. This is according to the Mortgage Bankers Association’s (MBA) 2025 Home Equity Lending Study.

“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, CMB, MBA’s Vice President of Industry Analysis. “Lenders in our study expect year-over-year growth of almost 10 percent for HELOC debt and 7 percent for home equity loan debt in 2025.”

Walsh noted that the reasons for tapping home equity are shifting. In 2024, approximately 39 percent of borrowers cited debt consolidation as the reason for applying for a home equity loan, compared to 25 percent two years prior. Those borrowers who indicated home renovations as their reason for usage dropped to 46 percent of volume, compared to 65 percent in 2022.

Added Walsh, “While there are additional opportunities in this space for lenders, there are also challenges. For example, just 50 percent 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.”

Select findings from MBA’s 2025 Home Equity Lending Study (covering data through December 31, 2024) include:

Total:

• For originators of open-ended Home Equity Lines of Credit (HELOCs) and closed-end home equity loans that reported in both periods, total average volume increased to $2.30 billion per company in 2024, up $2.14 billion in 2023.
• By known borrower usage, home renovations slowed to 46 percent of volume in 2024, from 56 percent in 2023 and 65 percent in 2022. Debt consolidation grew to 39 percent of volume in 2024, from 33 percent in 2023 and 25 percent in 2022.
• In 2024, 47 percent of total originations were subject to an Automated Valuation Model (AVM) and 26 percent had a Desktop Valuation (DV), with most entailing either an exterior/drive-by inspection or no inspection at all. Conversely, 24 percent of originations required a full appraisal with the majority entailing both interior and exterior inspection. The remaining 3 percent of originations used a different valuation method.

HELOCs:

• Average HELOC commitment volume (total credit offered) was $1.7 billion per company in 2024, up from $1.6 billion in 2023 for repeat companies.
• The average FICO score rose to 771 in 2024 from 760 in 2023. Average combined loan-to-value (CLTV) for funded HELOCs at closing decreased to 51 percent in 2024 from 53 percent in 2023.
• Average closings-to-applications pull-through for HELOC accounts remained relatively flat at 49 percent in 2024 from 48 percent in 2023.
• Weighted average HELOC outstandings in dollars rose by 5.4 percent from the beginning of 2024 until the end of the year.
• Despite higher outstandings, HELOC utilization rates (dollar volume of outstandings compared to maximum credit facility) declined in 2024 when examining the rates across origination vintage-year cohorts. For example, at nine months from origination, utilization was 42 percent in 2024 compared to 45 percent in 2023.
• Lenders expect HELOC debt outstanding to increase 9.8 percent in 2025 and 9.5 percent in 2026.

Home Equity Loans:

• Average home equity loan originations were $844 million per company in 2024, up from $788 million in 2023 for repeat companies.
• The average FICO score rose to 749 in 2024 from 742 in 2023. Average CLTV at closing remained flat from 2023 to 2024 at 62 percent.
• Average closings-to-applications pull-through for home equity accounts increased to 46 percent in 2024 from 39 percent in 2023.
• Weighted average home equity outstandings in dollars rose by 19.0 percent from the beginning of the year to the end of the year 2024.
• Lenders expect home equity loan debt outstanding to increase by 6.6 percent in 2025 and 4.1 percent in 2026.

MBA’s Home Equity Lending Study for lending and servicing open-ended HELOCs and closed-end home equity loans was conducted in the spring of 2025. MBA collected data representing $24.8 billion in originations volume for 2024; $167.4 billion in maximum credit extended to borrowers as of December 31, 2024; and $70.0 billion in outstanding borrowings as of December 31, 2024. The report includes benchmarking data such as volume and product mixes, utilization rates, operational metrics including costs, and growth expectations.