Tens of thousands of American homeowners successfully accessed their home equity in 2025 without refinancing their existing mortgages. This article provides insightful advice on how to get money by tapping home equity without disturbing your existing mortgage.  The RefiGuide provides expert insights on strategic methods to tap home equity while preserving favorable mortgage terms—a particularly valuable approach given today’s elevated interest rate environment.

Homeownership represents more than shelter; it’s a wealth-building investment that appreciates over time. As you reduce your mortgage principal and property values increase, you accumulate equity—a financial asset you can leverage for major expenses, investments, or financial goals. The question many homeowners face is how to access this accumulated wealth without the complexity and costs of traditional mortgage refinancing. We will examine multiple proven financing strategies enable homeowners to unlock equity while keeping their current mortgage intact, each offering distinct advantages for different financial situations and goals.

How to Access Home Equity Without Refinancing Your Mortgage in 2026

home equity

Yes, homeowners have several well-established options to extract equity without refinancing their primary mortgage.

The two most common methods—home equity loans and home equity lines of credit (HELOCs)—allow you to borrow against your property’s value while your original mortgage remains completely unchanged.

Home equity loans deliver a one-time lump sum with fixed interest rates and predictable monthly payments, making them ideal for specific large expenses such as home renovations, medical bills, or debt consolidation.

HELOCs function as revolving credit lines, providing flexible access to funds as needed, similar to a credit card but secured by your home and offering substantially lower interest rates.

Both financing structures establish a second lien on your property while preserving your first mortgage’s rate, term, and payment schedule—a crucial advantage for homeowners who secured low rates in recent years.

Understanding Home Equity: Your Financial Foundation

Home equity represents the portion of your property you truly own—calculated as the difference between your home’s current market value and your outstanding mortgage balance. This equity grows through two mechanisms: paying down your loan principal and property value appreciation.

Example: If your home appraises at $500,000 and your remaining mortgage balance is $200,000, you possess $300,000 in equity, representing 60% ownership of your property. This substantial equity position provides significant borrowing capacity through various financing products.

According to data from Intercontinental Exchange, homeowners accessed nearly $56 billion in home equity during the third quarter of 2025 alone, with $33 billion withdrawn through home equity loans. This market activity reflects both accumulated equity from rising property values over recent years and strategic financial planning by homeowners seeking to leverage their real estate investments.

RefiGuide has connected homeowners with vetted lenders for nearly two decades, providing expertise in home equity financing strategies that align with individual financial circumstances and goals.

Current Home Equity and Cash-Out Refinance Rates: January 2026 Snapshot

Understanding current market rates is essential for evaluating your equity access options effectively. As of late January 2026, home equity financing rates reflect the Federal Reserve’s recent policy decisions and broader economic conditions.

Home Equity Loan Rates (Fixed): According to Bankrate and LendingTree’s latest surveys, home equity loan rates average 6.49% APR for a standard $100,000 loan, with rates ranging from 6.25% to 8.50% APR depending on credit profile, loan term, and lender. These fixed-rate products offer payment predictability and protection from market volatility—a significant advantage in uncertain economic conditions.

HELOC Rates (Variable): Home equity lines of credit feature variable rates tied to the prime rate (currently 7.75%). The national average HELOC rate stands at 8.22% APR as of January 2026, with competitive lenders offering qualified borrowers rates between 7.89% and 8.50%. Some lenders advertise introductory promotional rates as low as 4.99% for the first six months before adjusting to standard ongoing rates.

Cash-Out Refinance Rates: For homeowners considering cash-out refinancing despite the drawbacks, current rates average 6.19% to 6.23% for 30-year fixed mortgages, according to Zillow and Fortune data. While these rates represent improvements from 2023-2024 highs, they remain substantially elevated compared to the sub-4% mortgages many homeowners secured during 2020-2022.

The rate differential creates a powerful financial incentive: homeowners with existing mortgages below 5% can preserve their favorable first-mortgage rates by adding a second lien at current market rates, resulting in a lower blended cost than refinancing their entire mortgage balance at today’s rates.

CBS News reports that home equity loans currently represent “the cheapest way to borrow money overall” when compared to personal loans (over 12% APR) and credit cards (over 20% APR), making them strategically attractive for homeowners with genuine borrowing needs.

Should I Avoid Mortgage Refinancing in 2026?

Traditional mortgage refinancing—replacing your existing loan with a new mortgage—involves comprehensive underwriting, substantial closing costs, and new loan terms that may prove financially disadvantageous in today’s rate environment. Many homeowners secured exceptionally favorable interest rates between 2020 and 2022, with mortgages in the 2.5% to 4.5% range—rates unlikely to be available again in the near future.

Compelling reasons to preserve your existing mortgage include:

Higher Interest Rates: Current refinance rates averaging 6.19% to 6.23% represent a significant premium over pandemic-era loans. If your existing mortgage rate sits below 5%, refinancing would substantially increase your borrowing costs and monthly payments. According to Redfin data, 82.8% of mortgaged homeowners currently hold rates below 6%, creating a strong financial case for preserving existing financing.

Substantial Closing Costs: Refinancing typically incurs fees ranging from 2% to 6% of the loan amount—potentially $6,000 to $18,000 on a $300,000 mortgage. These costs include appraisal fees, title insurance, origination charges, recording fees, and various administrative expenses that can offset years of potential savings from rate reductions.

Extended Loan Term: Refinancing resets your amortization schedule to a new 30-year or 15-year term. If you’ve already paid down 10 years of your current mortgage, refinancing into a new 30-year loan extends your debt timeline by a decade, significantly increasing total interest paid over the loan’s lifetime despite potentially lower monthly payments.

Loss of Special Loan Features: Borrowers with VA loans, FHA mortgages, or USDA financing enjoy specific benefits including reduced down payment requirements, flexible credit standards, and favorable terms. Refinancing into conventional financing forfeits these advantages. Similarly, homeowners with assumable mortgages or rate-lock protections would lose these valuable features.

Real estate economist Matthew Gardner emphasizes this point: “For homeowners who were lucky enough to have been able to take advantage of the historically low rates that we saw during the pandemic, I think that it would be very hard for them to choose to refinance their home as opposed to utilizing a HELOC.”

Laurie Goodman, Institute Fellow at the Urban Institute, concurs: “If you have a low-rate mortgage, you may prefer a home equity line of credit, which allows the first mortgage to remain in place, and only the incremental funds are borrowed.”

This expert consensus reflects the mathematical reality that preserving favorable existing financing while accessing equity through second liens typically delivers superior financial outcomes compared to refinancing in the current rate environment.

How to Borrow from Home Equity without Refinancing​

You can borrow from home equity without refinancing by applying for either a home equity loan or a home equity line of credit (HELOC). Both options sit behind your primary mortgage and don’t alter its rate or term. Home equity loans offer fixed payments, while HELOCs provide flexible, revolving access to funds. Eligibility is based on equity levels, credit profile, debt-to-income ratio, and property value.

1. Home Equity Line of Credit

A Home Equity Line of Credit or HELOC operates like a credit card but is secured by your home. It provides a flexible way to borrow money as needed, up to a predetermined limit.

How It Works:

  • Borrowers receive a revolving line of credit based on home equity.
  • Funds can be withdrawn as needed during the draw period (typically 5–10 years).
  • Monthly payments are based on the amount borrowed. (Shop for the Best HELOC Rates)
  • After the draw period, repayment begins (typically over 10–20 years).

Pros:

  • Lower interest rates than personal loans or credit cards.
  • Flexibility to borrow only what you need.
  • Interest-only payments during the draw period (in some cases).

Cons:

  • Interest rates are often variable, which can lead to higher payments over time.
  • Failure to repay could result in foreclosure.
  • Borrowing too much could lead to financial strain.

2. Home Equity Loan

A home equity loan, often called a second mortgage, allows homeowners to borrow a lump sum based on the equity in their home.

How It Works:

  • Borrowers receive a one-time lump sum with a fixed interest rate.
  • Repayment is made in fixed monthly installments over a set term (typically 5–30 years).
  • The home serves as collateral.

Pros:

  • Fixed interest rates provide predictable payments.
  • Large lump sums can be used for major expenses.
  • Interest may be tax-deductible if used for home improvements.

Cons:

  • Monthly payments begin immediately, unlike a HELOC’s draw period.
  • Defaulting could result in foreclosure.
  • Higher interest rates than primary mortgages.

3. Reverse Mortgage (For Homeowners Aged 62+)

A reverse mortgage allows seniors to convert part of their home equity into cash while continuing to live in the home.

How It Works:

  • Borrowers receive payments based on home equity.
  • No monthly payments are required; repayment occurs when the homeowner sells, moves, or passes away.
  • The amount owed grows over time due to accrued interest.

Pros:

  • No monthly mortgage payments.
  • Provides financial security for retirees.
  • Borrowers can receive a lump sum, monthly payments, or a line of credit.

Cons:

  • The loan balance increases over time.
  • Heirs may need to sell the home to repay the loan.
  • Upfront fees and insurance costs can be high.

4. Cash-Out Through a Shared Equity Agreement

A shared equity agreement allows homeowners to access home equity without taking on debt. Instead of a loan, an investment company provides cash in exchange for a share of the home’s future appreciation.

How It Works:

  • Homeowners receive a lump sum in exchange for a percentage of the home’s future value.
  • No monthly payments are required.
  • The agreement is settled when the home is sold or after a set term (e.g., 10–30 years).

Pros:

  • No monthly payments or interest charges.
  • No risk of foreclosure due to missed loan payments.
  • Allows homeowners to access cash even with low income or credit issues.

Cons:

  • The company takes a percentage of the home’s appreciation.
  • If the home appreciates significantly, homeowners may pay more than they would with a loan.
  • Limited availability based on location and home value.

5. Selling the Home and Downsizing

Selling your home and purchasing a smaller, more affordable property can be a practical way to access home equity.

How It Works:

  • Sell the current home at market value.
  • Pay off the existing mortgage.
  • Use the remaining equity to purchase a new home or invest.

Pros:

  • Provides a large lump sum of cash.
  • Reduces or eliminates mortgage payments.
  • Allows homeowners to move to a more suitable living arrangement.

Cons:

  • Requires moving, which may not be desirable.
  • Market fluctuations can impact home sale prices.
  • Closing costs and moving expenses can reduce net proceeds.

Takeaways on Tapping Home Equity Without Refinancing​ in 2026

You can still get a home equity loan without refinancing. This unique second mortgage has its own interest rate and repayment schedule, while your original mortgage remains unchanged. Home equity loans are popular when homeowners want cash but don’t want to give up a low first-mortgage rate. Approval depends on available equity, credit score, and income verification. This option is ideal for homeowners who secured low interest rates on their primary mortgage and want to avoid restarting the loan term or paying new first-mortgage closing costs.

Accessing home equity without refinancing is possible through HELOCs, home equity loans, reverse mortgages, shared equity agreements, and selling the home. Each option has unique benefits and drawbacks, making it essential to evaluate personal financial goals before deciding.

Home equity is like a hidden treasure chest, holding financial potential that, when used wisely, can bring stability and opportunity. But, like all treasure chests, unlocking it requires careful thought—choosing the right key can make all the difference.

Frequently Asked Questions:

What is Loan-to-Value (LTV)?

Loan-to-Value (LTV) is a financial metric that compares the amount of a mortgage loan to the appraised value of a property. It is calculated by dividing the loan balance by the home’s market value and expressing it as a percentage. For example, if a home is worth $300,000 and the mortgage is $240,000, the LTV is 80%. Lenders use LTV to assess risk—lower LTV ratios often qualify for better loan terms and interest rates. Learn more about how to qualify for a home equity loan.

Cash Out Refinance vs Home Equity Loan

Compare the pros and cons of both cash out refinancing and taking out a home equity loan or second mortgage. The RefiGuide can connect you with multiple lenders so you can shop and compare rates, payments and closing costs.

How Do You Leverage Home Equity?

You can leverage home equity by borrowing against it through a 2nd mortgage, home equity line of credit, reverse mortgage or a cash out refinance. These options provide access to funds to finance home remodeling, bill consolidation, real estate investments, or other financial needs. However, since your home is collateral, responsible borrowing is essential to avoid foreclosure.

Can you get a HELOC without refinancing?

Yes, you can obtain a HELOC without refinancing your existing mortgage. A HELOC allows you to borrow as needed during the draw period. Unlike home refinancing, it does not replace your existing mortgage but adds a second mortgage lien on your home. It typically has a variable interest rate, and repayment terms vary by lender, so reviewing terms carefully is essential.

References

Consumer Financial Protection Bureau. (2023). Home equity loans and HELOCs from the CFPB.

National Association of Realtors. (2023). Understanding shared equity agreements.

Reviewed by: Bryan Dornan, Mortgage Lending Expert (25+ years)  |  Last Updated: January 2026  |  Fact-Checked ✓

facebookShare on Facebook
TwitterTweet
FollowFollow us