Seven ways your origination business can leverage home equity lending

Over the past several years, the mortgage landscape has undergone significant shifts. The early 2020s saw many homeowners lock in ultra-low interest rates, but by 2022 and 2023, surging rates and resilient home prices deepened the affordability crisis. With a wave of homeowners recently refinancing at historic lows, housing inventory has struggled to keep up with demand. Now, rates continue to fluctuate at elevated levels, affordability remains a challenge, and economic uncertainty prevails. Amid this turbulence, one constant stands out: home equity in the U.S. has reached record highs, and homeowners are eager to leverage it.

According to the ICE Mortgage Monitor, U.S. mortgage holders had $17.2 trillion in equity by the end of 2024, with $11.2 trillion considered 'tappable'—accessible while maintaining 20% equity. The ICE 2025 Borrower Insights Survey revealed that 26% of borrower respondents are considering a home equity loan in the next year, while 23% are exploring home equity lines of credit (HELOCs).

What does this mean for mortgage lenders?

The rising borrower demand for home equity presents a significant opportunity for lenders who are prepared to offer home equity lending products. The question is, do you have the right tools and people in place to support this shifting market? Here are the top seven ways your business can leverage home equity lending:

1. Meet customers where they are

Homeowners have more accessible equity than ever, and there is something to be said about meeting consumers when and where they need you the most. Whether they are looking to pay down high-interest debt, or finish home improvement projects, offering a quick and efficient home equity lending experience will allow you to support each borrower's unique needs.

2. Remember your refinance customers

Now is the perfect time to connect with your refinance customers, in addition to marketing to new borrowers. Homeowners “locked in” to their current homes present a prime opportunity for home equity loans, lines of credit, and similar offerings as the mortgage market recovers. By late 2024, about 55% of U.S. homeowners with mortgages have interest rates below 4%. Additionally, the average homeowner holds $313,000 in equity, as outlined in the March 2025 Mortgage Monitor report. Reaching out to these customers about tapping into their equity while keeping their low-rate first mortgage intact can help unlock liquidity and deepen relationships. This also positions your business as top of mind when they’re ready to purchase their next home.

3. Reach out to current home equity line of credit (HELOC) customers

You may already have a book of home equity borrowers. Knowing how much of their revolving credit is being used and how much more equity they can tap into is important, as this can help to expand usage and open up more borrowing potential. Marketing to these customers should be part of your strategy, not only to cultivate home equity opportunities, but also to support overall retention.

4. Adopt the right tools to market and manufacture home equity loans

Having the tools to promote and manufacture home equity products at scale is incredibly important. Starting with sales and marketing tools, your lending platform should provide fully integrated lead management and CRM solutions as part of your single system of record. ICE Customer Acquisition for example, for example, provides industry-leading sales automation and CRM support, delivering streamlined lead management that seamlessly integrates with your loan origination system (LOS). When it comes to your LOS, ensure your system has built-in home equity technology to help you originate, process, and close more home equity loans in less time.

5. Leverage your retail sales force to sell home equity products

In today’s market, having dedicated teams for manufacturing different lending product types can seem like a luxury. Many lenders are realizing that in order to remain competitive and offer alternative lending products at scale, they need to pull in their retail sales force to sell and originate home equity products. This means ensuring that your business strategy includes properly incentivizing these teams to sell home equity products.

6. Compliance is key

So, you’re all in on offering home equity products and you have the team in place to sell. Have you thought about the compliance risks of your team operating out of two systems of record? With today’s reporting regulations, more and more lenders are making the shift toward moving their home equity business out of a consumer lending platform and into a single system of record. By ensuring that you are using a compliance-driven LOS, you have the benefit of built-in support and reporting for all loan categories, including HMDA for home equity.

7. Remain relevant in a changing market

The mortgage industry is cyclical, and it's important to stay ahead of market changes and anticipate consumer needs. Offering and promoting different types of lending products is essential to remaining competitive in any market.

Now more than ever, lenders require a platform that can evolve with their business.

Encompass® is the industry's most widely used and proven solution for managing all loan types with speed and agility. Click here to learn why top lenders trust the Encompass platform to deliver a fast, efficient, and compliant home equity lending experience.

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