Want to borrow home equity without refinancing? 3 options to consider this May
Summary
Many American homeowners have a record amount of home equity they can borrow against in 2025. Because interest rates are likely to stay high, refinancing a mortgage may not be the best way to access this money. Instead, homeowners can consider other options that do not require refinancing, such as home equity loans, home equity lines of credit (HELOCs), or reverse mortgages for seniors.Key Facts
- Average home equity in the U.S. is at a record high in 2025.
- The Federal Reserve is keeping interest rates steady but high, with no expected cuts soon.
- Refinancing a mortgage to borrow home equity means getting a new loan at current higher mortgage rates.
- A home equity loan offers a fixed interest rate around 6.96% and keeps the original mortgage rate unchanged.
- A HELOC has a slightly higher rate (7.11%), works like a credit card for home equity, and allows interest-only payments early on.
- Both home equity loans and HELOCs may offer tax deductions on interest used for home improvements.
- Reverse mortgages are available only to homeowners 62 and older; they provide funds without monthly payments but reduce the inheritance value of the home.
- These options help borrowers access cash from their home without refinancing their existing mortgage.
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