While inflation, interest rates and home prices all may be higher than many Americans would prefer right now, there have been a few silver linings. One of those became clear this week after the latest Intercontinental Exchange (ICE) Mortgage Monitor report was released. The report showed homeowners in possession of $313,000 worth of home equity, on average. 

While that’s down slightly from the November 2024 report, it’s still up 6% year over year, giving homeowners a natural opening to borrow that money at an affordable rate via a home equity loan or home equity line of credit (HELOC). Both home equity borrowing products come with interest rates lower than many alternatives right now – and with a rise in equity year-over-year, there’s likely more than enough to be utilized as needed.

But that doesn’t mean that owners should just borrow without a plan, either. Since the home functions as collateral in this scenario, lenders could take the home back if homeowners fail to make repayments as agreed upon. So, it’s critical that the math works before getting started. Fortunately, there are some timely and helpful ways homeowners can exploit this overall rise in equity to their advantage. Below, we’ll detail three of them.

Start by seeing how much home equity you’d be eligible to borrow here.

What homeowners should do with their equity right now

Here are three ways homeowners can take advantage of the average six-figure home equity amount right now:

Complete certain home projects and renovations

Did you know that select home projects and renovations can qualify for a tax deduction? If you use a home equity loan or HELOC to finance items like a kitchen remodel, for example, you may qualify to deduct the interest on the loan or line of credit when you file your tax return for the year in which the funds were used. And with the average amount of home equity higher year-over-year, this could be a smart and tax-friendly way to use that money now.

Get started with a home equity loan here.

Pay down high-interest debt

HELOC rates are now just 8.12% after falling to a two-year low. Home equity loan rates, meanwhile, are averaging around 8.40% after declining for much of the last year. This makes either product a natural choice for those who need to pay down high-interest debt. Credit card interest rates, by comparison, are near 23% – a record high. That makes either home equity borrowing option almost three times cheaper. 

It makes sense, then, to use the latter to pay down the former. With a lower HELOC or home equity loan interest rate you can pay down your existing debt at a much more affordable rate and wipe out the balance in a much quicker fashion. And with so much equity to potentially utilize, this can be a viable option for a vast majority of those with significant, high-rate credit card debt.

Invest it in income-earning opportunities

Not every use of your home equity is a valuable one. But with the average amount now over $300,000, some homeowners may find it effective to move some of those funds into income-earning opportunities. Items like starting a business or even buying a second home for renting can be beneficial, particularly if you can get invested or buy in at a reasonable entry price point. These uses may not be broadly applicable, but for the right homeowner, particularly now, it can set them up for long-term income-earning opportunities that they may never have otherwise realized if they waited for other startup funds.

The bottom line

With a sizable median amount of equity at their disposal, homeowners may want to start utilizing those funds in select ways. By completing specific home projects, paying down high-rate debt or investing in income-earning opportunities, homeowners can make their home equity work for them right now and, potentially, for multiple years into the future.

Compare your home equity loan and HELOC options online today.