Home equity is the hottest product in community lending, and credit unions are winning it.
U.S. HELOC balances hit $459 billion in Q2 2026, $142 billion above the early-2022 low and the 17th consecutive quarter of growth (Federal Reserve Bank of New York). At credit unions, HELOCs have climbed from 6.2% of the loan portfolio in early 2022 to 10.8% by Q2 2026 (Callahan). Second mortgages and HELOCs were the industry's biggest growth sector at mid-year (CreditUnions.com).
in U.S. HELOC balances in Q2 2026, the 17th straight quarter of growth and $142 billion above the early-2022 low. Source: Federal Reserve Bank of New York, Q2 2026
The market share story is just as striking. Over the 12 months ending May 2026, banks' share of HELOCs outstanding slipped from 45.2% to 41.4%. Credit unions rose to 29.9%, and mortgage companies jumped from 25.5% to 28.6% (HEL News). Those bank figures cover institutions of every size, and the lesson applies to community banks as much as credit unions: the share is moving toward lenders who make it easy to say yes. Fast-moving nonbanks are taking more of it than anyone. The playbook below is how community institutions take it back.
Share of home equity lines of credit outstanding, by lender type
The math is simple. Millions of homeowners are sitting on low mortgage rates and record equity. Moving would mean a much bigger monthly payment, so they're staying put and borrowing against the house for renovations, big purchases, or debt consolidation (CreditUnions.com).
The rate gap seals it. The average HELOC rate fell to 7.47% in Q2 2026, while the average credit card rate has stayed near 20% (Callahan). For a member carrying card debt, home equity is the cheapest money available.
A member consolidating $20,000 of card debt into a HELOC could save roughly $2,400 a year in interest.
Rates as of Q2 2026. Source: Callahan & Associates. Savings estimate is illustrative.
Coastal Credit Union's chief lending officer put it plainly: members who can't afford to upgrade homes often have plenty of equity to make their current one feel new (CreditUnions.com). That's a need community institutions are built to meet.
Nonbank lenders are winning share by being fast online. Credit unions and community banks win by being trusted in person. Borrowing against a home is a big decision, and many members want to sit across from someone who can walk them through draw periods, variable rates, and whether a fixed home equity loan fits better.
That's exactly where demand gets lost:
A member walks in Saturday ready to talk. The home equity specialist works weekdays at another branch.
Fix: book by expertiseA member sees a line, leaves, and applies online with a nonbank that evening.
Fix: live lobby view and staff matchingYour HELOC ad lands on a rate page with no way to book time with a person.
Fix: a booking button on every pageA HELOC member is also a deposit, card, and insurance conversation, if the banker is prepared.
Fix: know why they're comingEvery one of these misses sends a member, and their equity, to a competitor.
See how RelationshipOS routes HELOC appointments to the right lender, at credit unions and community banks alike.
Book a walkthroughEvery HELOC landing page, email, and social ad should end in a bookable appointment, not just a rate.
Match each member to a lender who knows home equity, and one who speaks their language when that matters.
Many homeowners can only come in after work or on weekends. Build lender schedules around your real traffic data, not habit.
Use campaign tracking and attribution to follow each member from click to appointment booked, kept, and closed, plus what else they opened.
None of this requires a new product. It requires making sure every member who raises their hand gets a prepared person on the other side of the desk.
Check what's true at your institution today.
Community institutions don't need to beat nonbanks on speed. They need to be ready when members choose the relationship.
FMSI's RelationshipOS runs that playbook out of the box:
Institutions on FMSI run a 91% appointment completion rate and three times the industry-average cross-sell (FMSI). First Central Credit Union in Waco, Texas uses appointment scheduling so staff are prepared before members arrive, including members with specific language needs (FFNews).
With onboarding in under 60 days and the option to start with one module, RelationshipOS can be live in under a quarter, in time to capture the home equity demand building right now.
See how RelationshipOS connects your home equity campaigns to booked, prepared lender conversations across 140+ banks and credit unions.
Book a walkthroughReady to turn your branch into a revenue engine? Let’s talk.
