The materials available in this article are for informational purposes only and not for the purpose of providing legal advice. You should contact your own advisors with questions regarding the home equity lending content herein. The opinions expressed in this article are the opinions of the individual authors and may not reflect the opinions of MeridianLink, Inc.
What do homeowners think about home equity lending? We asked and the results reveal a clear opportunity for lenders like you.
Our SVP of Mortgage JP Kelly joined HousingWire Daily to unpack key home equity lending insights. In the podcast episode he shared findings from our latest survey and the massive opportunity home equity loans offer in today’s market.
In short, the tipping point has arrived.
Home equity is at a record high of $35 trillion. Interest rates are the most affordable that they’ve been since May 2023. And consumers are facing mounting pressures with rising credit card debt due to higher interest rates and inflation, as well as resurfacing student loan payments.
In response, people are starting to examine how they can balance the scales. The result? Interest in taking out a home equity loan in the next 12 months rose from 21% in 2024 to 28% in 2025, and consumer understanding of home equity loans has risen to 53%, compared to last year’s 41%.
As Kelly puts it, “Why pay credit card debt with interest rates in the mid-twenties when you’re sitting on $200k in home equity?”
With such a stark difference in rates—and more home equity available than ever—it simply makes sense. But that’s not to say that people aren’t still nervous about home equity loans. Fear of risking homeownership and uncertainty around repayment terms linger. But with the right education and guidance—which consumers are seeking—lenders can help consumers find the best option for their needs.
To help consumers approach home equity loans with more confidence, Kelly recommends taking a consultative approach.
“It’s education: understanding what not to get and what the best use cases are.” This means helping borrowers recognize their limits based on their unique situation and showing how they can avoid double-digit credit card rates by choosing a home equity loan with rates around eight or nine percent.
Lenders who want to successfully dive into the large home equity pool need to prove trustworthy and knowledgeable.
It can’t be a transactional interaction. It needs to involve a deep understanding of the consumer, from their current financial situation to their goals and gaps in understanding home equity lending.
Fortunately, lenders are proving to do just that. From expanding home equity loan options to improving their technological frameworks, they’re delivering tailored solutions and streamlining the application-to-funding process.
What does that look like in practice?
It’s an in-application tool that can immediately pull a consumer’s home valuation and determine their equity. It’s a fast credit check. And all the tools and automation that help qualified borrowers get approved as quickly as possible.
But the response to our consumer survey was clear. Nearly half of consumers want the convenience of digital tools and personalized service and guidance.
Data is how you achieve this balance.
When used effectively, data is your window into what consumers need and when they’re likely to need it. Technology that connects data across your organization—like recent account activity, credit trends, or major life events—paints a full picture of each borrower’s situation. That deeper insight helps you deliver the right guidance, faster.
But it’s not just about identifying the need—it’s about educating borrowers on their options based on their unique situation. Afterall, home equity loans aren’t just for kitchen remodels or second homes. For example, if someone is looking to consolidate credit card debt, you can explain how a home equity loan might offer lower interest rates and manageable payments. If medical bills are the concern, you can help them understand loan terms that fit unexpected expenses without straining their budget. And if building emergency savings is the goal, you can guide them toward solutions that provide financial flexibility when it matters most.
These proactive, personalized conversations show you’re not just selling—you’re supporting. That builds trust, deepens engagement, and turns prospects into loyal, long-term accountholders.
And that’s where MeridianLink comes in.
We’re the engine behind faster approvals and more personalized lending experiences. With MeridianLink® One, you get a connected suite of solutions—and third-party partners—that provides the data you need to tailor financial options, simplify the application process, and accelerate decisioning and funding through automation. It’s all designed to help you deliver smarter lending from start to finish, so you can focus more on consulting and building those important relationships.
Want the full picture on home equity lending?
Start with our HousingWire Daily podcast episode for a quick look at today’s market, and how our solutions are helping lenders like you.
Then check out our 2025 Home Equity Report for exclusive insights, key trends, and the biggest opportunities ahead.
