A new national survey from MeridianLink, Inc. reveals a growing interest in home equity lending among American homeowners. Nearly three in 10 homeowners (28%) say they’re likely to take out a home equity loan or HELOC in the next 12 months—up from 21% in 2022, according to the company’s latest research.
The findings, based on responses from roughly 1,500 homeowners, show that interest in tapping into home equity is rising, but significant barriers remain. Of those hesitant to borrow, 54% cite affordability as a primary concern, with 63% pointing to high interest rates, 22% worried about risking homeownership, and 18% unsure about repayment terms.
“Homeowners recognize the potential of home equity lending, but many are still on the sidelines due to financial uncertainty and lack of education about their options,” said JP Kelly, SVP of Mortgage at MeridianLink.
Despite these concerns, home improvement remains the top motivator, with 45% of likely borrowers citing renovations as their primary reason for tapping home equity. Other leading motivations include investing in new properties (16%) and debt consolidation (16%).
What Interested Homeowners Are Looking For
When choosing a lender, borrowers care about more than just rates. While affordability is key, respondents also said a seamless, personalized experience was critical, highlighting the importance of digital tools, speed of approval, and tailored service. Of particular interest, 43% cited lender reputation and trust as a major deciding factor, underscoring that consumers seek transparent, reliable lending experiences alongside competitive rates.
Knowledge around home equity lending is improving, but gaps remain. While 53% of respondents rated their understanding as strong, up from 43% in 2022, 23% of survey respondents still admitted to having an incomplete understanding of the process and product options.
To encourage more adoption, homeowners said they’d be more likely to borrow if lenders offered lower interest rates (68%), more flexible repayment terms (36%), and a simplified application process (18%).
The survey results suggest financial institutions have a major opportunity to close the gap by educating borrowers, streamlining processes, and delivering a digital-first, customer-friendly experience to support growing demand for home equity lending.
