Home equity in 2026: 4 predictions every credit union should prepare for

Home equity lending is in the midst of a major shift, and for credit unions, it is both a challenge and an opportunity. Over the past two years, demand for home equity loans and HELOCs has surged, fueled by high interest rates and low inventory. But as we look ahead to 2026, this growth won’t be about volume alone. Instead, it will also be about evolution.

How borrowers use equity, how they expect to access it, and how they choose a lending partner are all changing rapidly. And the institutions that prepare now will be best positioned to grow, serve, and lead.

Here are four predictions every credit union should be preparing for, as well as how to act on them.

As of Q3 2025, U.S. homeowners held a staggering $11.6 trillion in tappable equity, with the average US homeowner holding $213,000 in accessible value from their home. Yet in Q1 2025, consumers accessed just 0.41% of that available equity.

With refinancing less attractive and mortgage rates still elevated, more homeowners are turning to home equity products to meet short- and long-term needs. In today’s rate environment, many borrowers choose to keep their low-interest mortgage rather than refinance, even when they need cash. This makes home equity loans and HELOCs the preferred options for tapping into a home’s equity without disrupting the favorable terms of the mortgage.

Whether it’s to consolidate debt, fund a major purchase, or make necessary home repairs, today’s borrowers see home equity as a flexible tool that can be used not only as a financing solution but also as a smart financial strategy.

For credit unions, that means the opportunity isn’t just about loan growth, it’s about positioning home equity as a core product in their 2026 member strategy.

While home improvements are still common, the use cases for leveraging home equity are evolving. Today’s borrowers are just as likely to use equity for debt consolidation, education expenses, emergency costs, or preparing a home for sale.

This shift from “project financing” to “life financing” means equity lending is no longer just a seasonal or situational product. It’s a recurring tool for financial stability, and also a key relationship entry point.

Credit unions that recognize this shift will be positioned to build deeper, longer-lasting member relationships. And the ones that modernize their approach to meet new expectations will gain a serious advantage over both big banks and fintechs.

Fintechs are actively targeting home equity as a significant growth area. They’ve already grown from 2% of home equity originations to 15% in just five years, a massive gain that reflects how quickly consumers will migrate toward speed and ease.

With deep pockets and aggressive marketing engines, they’re capturing attention—and they’re capturing business.

But what fintechs can’t easily replicate is what credit unions do best: high-trust relationships, personalized guidance, and community commitment.

Still, it’s not enough to simply rely on those strengths alone. To stay competitive, credit unions need to pair service with efficiency. That means moving beyond temporary, quick solutions or “just okay” experiences and leaning heavily into tools that let you deliver speed and support.

Here’s what forward-thinking institutions are doing:

Fintechs are betting that traditional lenders can’t move fast enough. And savvy credit unions have the opportunity to prove them wrong.

In a tighter lending market, efficiency isn’t optional. It’s your edge. Today’s borrowers want a better experience … but what does that mean? Simply put, they’re defining “better” as faster, easier, and more transparent.

According to ICE Mortgage Technology’s 2023 Borrower Insights Survey, 79% of borrowers said an easy digital application process was important, and 71% expected faster closings when applying online. That aligns with what we’re hearing from credit unions across the country: speed and simplicity are no longer perks; instead, they are expectations.

Yet many institutions still use systems designed for first mortgages or generic consumer loans to process home equity. These legacy workflows often involve multiple systems, duplicate data entry, and confusing borrower communication—all of which increase the chance of drop-off or delays.

That speed isn’t just about automation; it’s also about smart orchestration. Automated doc ordering, online communication portals, and real-time task management allow teams to move faster without burning out staff or sacrificing compliance.

The right technology helps lenders provide a convenient, streamlined equity lending experience, which, in turn, helps them build trust and loyalty.

Home equity is no longer a niche or seasonal product. Today, it’s a strategic growth engine. And credit unions are in the best position to lead, as long as they’re willing to evolve.

Borrowers aren’t just comparing you to the lender across the street or even across town. Instead, they’re comparing you to Amazon, Rocket, and every app that gives them instant answers. That doesn’t mean you have to abandon your values. Quite the contrary, in fact. It means you have to deliver them faster and more clearly.

That’s why we built Coviance: to help community lenders move faster, serve better, and grow sustainably. We’ve partnered with more than 425 credit unions and community banks across the country, helping them originate smarter, close faster, and empower staff to do more without burning out.

As 2026 approaches, the question isn’t whether the market will change—it’s whether or not you’ll be ready for it.

If your institution is ready to simplify, scale, and stand out, we’d love to show you what’s possible. Explore the Fast Track difference today.