Nonbank HELOC Lenders Gain Share as Equity Reaches $11 Trillion

Nonbank lenders have substantially increased their market share in originating Home Equity Lines of Credit (HELOCs), a trend driven by a significant rise in tappable home equity across the United States. From 2023 to 2025, nonbank originations for HELOCs saw an approximate 140% growth. This contrasts sharply with the more modest growth rates observed at depository institutions, which experienced only a 7% to 20% increase in HELOC originations during the same period. This divergence in growth indicates a strategic shift in the lending landscape, with nonbank entities becoming more dominant players in this segment of the mortgage market.

The surge in tappable equity, which reached an estimated $11 trillion, provides a substantial pool of capital for homeowners to access. Tappable equity refers to the amount of equity a homeowner can withdraw while maintaining at least 20% equity in their home, a common threshold for lenders. This substantial increase in available equity creates a fertile ground for lenders, and nonbanks appear to be capitalizing on this opportunity more effectively than traditional banks. The white paper detailing these trends highlights the growing importance of nonbank lenders in facilitating homeowner access to funds secured by their property.

This market shift is occurring against a backdrop of evolving economic conditions and homeowner financial strategies. As interest rates have fluctuated, homeowners may be seeking alternative lending channels that offer more flexibility or competitive terms. Nonbank lenders, often characterized by more agile operational structures and specialized product offerings, may be better positioned to adapt to these changing market dynamics. Their increased activity in HELOC originations suggests a successful strategy in attracting borrowers who are looking to leverage their home equity for various purposes, such as home improvements, debt consolidation, or other significant expenses.

The white paper's findings underscore a significant transformation in how home equity is being accessed and financed. The substantial growth in nonbank HELOC originations points to a competitive advantage these lenders may hold, potentially due to factors such as streamlined application processes, faster funding times, or more tailored loan products. As the total tappable equity remains at a high $11 trillion, the continued expansion of nonbank lenders in this market is likely to be a key feature of the mortgage industry in the coming years, influencing both borrower choices and the competitive strategies of traditional financial institutions.