Published:
September 16, 2022
Last updated:
March 10, 2026
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Sammamish Mortgage
5 min read
Home Equity Loans and HELOCs on the Rise in Washington State
In This Article

A new report showed that home equity loans and home equity lines of credit, or HELOCs, have become more popular in Washington State and across the U.S.

More and more homeowners have turned to equity loans and HELOCs as a way to tap into their home equity. Relatively high (though currently declining) mortgage rates have influenced this shift.

Home Equity Loans, HELOCs More Popular in Washington

Recently, the Urban Institute’s Housing Finance Policy Center published its latest “Housing Finance at a Glance” report. This report offers insight into a variety of mortgage lending and home financing trends.

The group’s latest report showed a steep increase in the use of home equity lines of credit (HELOCs) in Washington State and nationwide. The use of “regular” equity loans has also risen in recent months, according to the report.

Home equity loans and HELOCs represent about 4.0% of total U.S. mortgage debt outstanding, equal to roughly $0.6 trillion as of Q2 2025.

Because mortgage rates remain higher than many homeowners’ existing mortgage rates, equity extraction through traditional cash-out refinancing has remained subdued, which indirectly increases the relative importance of alternatives such as HELOCs for accessing home equity.

Clearly, these financing options have become more popular among Washington homeowners. We’ll look at the reasons why in just a moment. But first, for those who aren’t familiar with the subject, here’s a quick rundown on home equity loans and HELOCs.

How a Home Equity Line of Credit Works

The terminology in use here can be confusing, especially for those who have never used equity-based financing in the past. There are two similar products with similar-sounding names, but they work differently.

Here are the key features and differences:

  • Secured against the home. A home equity loan is simply a loan that’s secured by the property. As the borrower, you receive a specific amount of money that must be repaid over a set period of time. The payments are usually fixed, with equal amounts spread over the life of the loan. The amount you can borrow will depend on your income, your credit history, and the current market value of the home.
  • Revolving credit. A home equity line of credit, or HELOC, is a revolving line of credit that works much like a credit card. The difference is that the HELOC is secured by your home. Borrowers receive a certain amount of credit, which they borrow from as needed by using a check or credit card tied to the account. Unlike a home equity loan, which usually has a fixed interest rate, HELOCs typically have a variable rate that can go up or down over time with market conditions.
  • To summarize the difference: A HELOC is a line of credit that lets homeowners borrow money as needed with a variable interest rate. A home equity loan, on the other hand, is a lump sum that’s disbursed up front and paid back in fixed installments over time.

A Response to Higher Mortgage Rates

For many homeowners across Washington State, home equity loans and HELOCs have become more attractive than the cash-out refinance loan. That’s because mortgage rates remain relatively high comared to a few years ago, though they are on a declingin trend as of March 2026. Homeowners with existing mortgage rates that are lower than current market rates often shy away from refinancing, even when it’s a cash-out refi.

During the second week of March 2026, the average rate for a 30-year fixed mortgage was hovering around 6.0%. That’s about 0.63% lower than the same time last year.

View WA State Mortgage Rates

Price Growth Has Boosted Equity for Washington Homeowners

Many homeowners in Washington are now able to convert some of their equity into cash. In fact, the number of homeowners who could benefit from equity-based financing has risen sharply over the past few years. The reason — price growth.

According to Zillow, the median home value for Washington State currently sits at $585,669, as per Zillow. That’s actually a slight dip of 0.5% year over year. That said, prices in the state have still risen quite a bit over the past decade.

As a result, many homeowners in the state currently have a lot more equity than they did a few years ago. And that equity could be used for a wide variety of purposes.

Some homeowners use home equity loans and HELOCs to pay off high-interest debt, to cover the cost of college tuition, or to fund a renovation project.

Pro Tip: Check out our 2026 Conforming Loan Limits and FHA Loan Limits pages to help you understand how much you can borrow with a specific mortgage program.

Ready to Buy a Home and Apply For a Mortgage in WA?

Are you considering buying a home in Washington State? Sammamish Mortgage can help. We are a local mortgage company serving the broader Pacific Northwest region, including Washington, Idaho, Colorado, Oregon, and California. We are proud to offer a wide variety of mortgage programs and products with flexible qualification criteria, including our Diamond Homebuyer Program, Cash Buyer Program, and Bridge Loans, among others. Visit our website to get an instant rate quote or to use our online mortgage calculator. Please contact us if you have any questions or are ready to get pre-approved for a mortgage.