Seventy-four percent of homeowners plan to remain in their current home over the next two years, with 58 percent citing the rate on their existing loan influencing their decision not to sell, according to a survey from TD Bank.
“Although recent interest rate reductions have begun to shift the housing conversation, overall activity remains subdued, as many homeowners are reluctant to move and forego their current favorable mortgage rates,” Steve Kaminski, TD Bank head of residential lending, said. “As a result, we are seeing an increasing number of individuals leveraging their home equity as a means to enhance their financial position.”
Given financial market uncertainty and unpredictable interest rates, home equity has emerged as an essential consideration for many households. The vast majority of survey participants, 86 percent, said a home equity line of credit is an important part of their financial safety net, with 70 percent saying it can help them manage expenses and boost financial confidence.
Additionally, 82 percent of homeowners recognize the substantial advantages of using a HELOC, citing benefits such as flexibility for home repairs, renovations, educational expenses or unforeseen emergencies (59 percent), lower interest rates relative to many other types of credit (42 percent), and the opportunity to consolidate higher-interest debt into a single loan (36 percent).
Nearly the same percentage of homeowners, 84 percent, carry non-mortgage debt and 65 percent of those homeowners’ maintain balances of $10,000 or more.
More than 2,000 U.S. homeowners who purchased a home within the past 10 years and acquired a mortgage when they bought their most recent home were included in the nationwide survey. The survey explored how homeowners are building and leveraging equity to help them achieve their long-term financial objectives.