The Quick Read: As of September 28, 2026, homeowners hold a record amount of tappable equity, and borrowing against it just got pricier. The Fed raised its target a quarter point on September 16, its first hike since 2023, and HELOC costs move with it. A fire pit or a landscaping job is easy to want and easy to fund. The harder question is whether you should fund it with a variable-rate line right now.
Here is how I weigh it, using public data only. The facts first, then my opinion, clearly marked.
Key Takeaways
- The Federal Reserve voted 12–0 on September 16 to raise the federal funds target range to 3-3/4 to 4 percent. Prime-linked debt, such as most HELOCs, repriced upward with it.
- Tappable equity is at a record, but the record is thin. It also predates the hike and the September jump in mortgage rates.
- Fixed mortgage rates did not wait for the Fed. They were already climbing, which makes a cash-out refinance a costlier way to reach your equity than it was in the summer.
- Your lender’s lending value on the house is not “free cash.” Decide the project first, then the funding.
- A HELOC leaves your first mortgage alone. That matters more this fall than it did a year ago.
What Changed: The Dated Facts
The Fed raised its target a quarter point on September 16, 2026, and that moved prime. The FOMC statement put the range at 3-3/4 to 4 percent, with a unanimous vote. Advisor Perspectives called it the first increase in the benchmark since 2023.
Prime is the rate banks use as a base for variable loans. TheStreet, citing the Fed, put the prime rate at 7% in late September 2026. It was 6.75% before the hike. Most HELOCs use prime as their foundation and add a margin on top. So the quarter point flowed straight into the cost of an open line.
The Fed’s own projections point to more. J.P. Morgan Asset Management’s summary of the September projections shows the median participant expecting the funds rate to end the year higher than it stands today. That implies one more quarter-point hike before the year ends. It is a projection, not a promise. But it tells you which way the risk leans for anyone with a variable balance.
Fixed mortgage rates jumped around the same time. Freddie Mac’s survey put the 30-year fixed at 6.95% for the week of September 17, per Fox Business’ report of the release. A Realtor.com economist called it the largest one-week move since April 2025. For the week of September 24, Freddie Mac’s survey put it at 7.03%. That was the first reading above 7% since January 2025, according to the same report.
Go back a bit further and the climb is plain. Freddie Mac’s survey had the 30-year fixed at 6.65% for the week of August 20, per Fox Business. That is about 38 basis points in five weeks. One note: the Fed does not set fixed mortgage rates. Those track longer-term Treasury yields and inflation expectations, and they had started rising before the meeting.
Treasuries tell the same story. The Fed’s H.15 release shows the 10-year yield at 5.11% on September 23 and 5.24% on September 28. That is up 13 basis points in three trading days.
Borrowers are reacting. The MBA’s survey for the week ending September 18, released September 23, showed applications down 1.5% overall. Refinance applications fell 3% on the week and sat 62% below a year earlier. The adjustable-rate share of applications rose to 9.8%. Some buyers are already choosing variable products to get through the price of money.
How Much Equity Is Out There?
A lot, and a record amount, though the margin is slim. The ICE Mortgage Monitor released August 10 reported that 47.5 million mortgage holders hold $11.7 trillion in tappable equity. Tappable means the amount left after a lender-style cushion. A year earlier, ICE’s August 2025 report put the figure at $11.6 trillion. So the record is only about 1% above last year.
Two cautions come with that headline.
First, the reading is from the second quarter. It predates the September hike and the rate surge. ICE’s own commentary said rising rates “may soften” further growth in the second half. Home values are not racing ahead to refill the tank. ICE put annual home price growth at 1.5% in July. The NAR existing-home sales report of September 10 put the August median existing-home price at $429,100, up 1.6% from a year earlier. That is modest.
Second, the national figure hides variation. ICE counted about 813,000 borrowers underwater, up 44% from a year earlier. The equity headline is real for most owners. It is not real for all of them.
Owners have already been using it. ICE reported on March 9 that homeowners withdrew $205 billion of equity in full-year 2025, the highest annual total since 2022. Second liens accounted for $116 billion of that. Many owners hold a low first mortgage and would rather leave it alone. A second lien lets them do that.
The pattern shows up in the household debt data too. The New York Fed’s Q2 2026 report, released August 11, showed HELOC balances up $13 billion on the quarter to $459 billion. That is the 17th straight quarterly increase. HELOC limits rose $19 billion. Delinquency transitions improved slightly. These are quarterly figures from before the hike. They show where the market stood when rates were lower.
What Does This Mean for the Fire Pit and the Landscaping?
It means the funding choice matters more than the project. A backyard upgrade is a want, not an emergency. That gives you room to choose how to pay for it. Three routes are common, and the September data changes how each looks.
| Route | What it does to your first mortgage | Rate behavior |
|---|---|---|
| HELOC | Leaves it alone | Variable, tied to prime |
| Fixed home equity loan | Leaves it alone | Set at closing, no repricing |
| Cash-out refinance | Replaces it | New fixed rate on the whole balance |
HELOC. A home equity line of credit works like a credit card secured by your house. You borrow what you need, when you need it. Most carry a variable rate. After September 16, the interest on any outstanding balance rises with prime. If the Fed moves again, so does your cost. That is the trade-off for flexibility.
Yahoo Finance, citing Curinos, reported on September 25 an average adjustable HELOC rate of 7.09% for top-tier applicants. Experian, also citing Curinos, put the average at 7.53% as of September 11. The two disagree because the borrower mixes differ. Both lag the September 17 prime move. Treat them as direction, not as a number you will see on your own offer.
Fixed home equity loan. This is a lump sum with a set rate. It does not reprice when prime moves. If you know the project cost and want a stable carry, it is worth a look. It also means you are borrowing the full amount on day one.
Cash-out refinance. This replaces your first mortgage with a new, larger one. That resets the whole balance at the current fixed rate, not just the new money. With Freddie Mac’s survey above 7% for the week of September 24, that is a big change for anyone sitting on a much lower first-lien rate. The math often argues against it for a modest project.
A hypothetical shows the gap. Suppose a first mortgage sits at 4% and the market fixed rate is 7%. A cash-out refinance moves the entire balance up by three full points to fund one new project. A second lien leaves the 4% alone and prices only the new borrowing. That is why second liens have been the main way owners tap equity.
Lendmire arranges and compares HELOC programs, and the page carries the current guidelines. I won’t repeat figures here. Each lender sets its own terms, and eligibility is subject to lender guidelines, credit review and a property valuation.
If the property you want to tap is a rental, that is a different product with its own rules. I covered the mechanics in tapping investment property equity with a cash-out refinance.
My Take
Winter is a good time to plan the project and a poor time to fund it casually. That is my opinion, and here is the reasoning.
The Fed’s September 16 hike is small on its face. A quarter point is a quarter point. But the projections imply another, and the first hike in three years changes the direction of the trend. If I were holding a variable balance, I would plan as if prime could go up again before spring. I would not plan as if it will fall.
The equity headline also invites a mistake. “Record equity” sounds like a pile of cash. It is a calculated amount, and what a lender will extend on your particular house is a different question. Home prices are barely moving. Inventory is rising. NAR’s September 10 report put August supply at 4.9 months, the highest in more than a decade, with 1.62 million homes on the market. A softer market can mean softer valuations. Do not borrow against a number you assume will grow.
One more point I find easy to miss. A project that adds enjoyment is not the same as a project that adds value. A fire pit and good landscaping can make a house nicer to live in. They are not the same as a roof or a heating system. I would borrow for the second kind more readily than the first, and I would size the first kind to what I could repay comfortably if the line got more expensive.
Honestly, this is a close call for many owners. A modest project, paid off over a short stretch, may be fine on a HELOC even with a higher prime. A larger project drawn over a long period is where the variable rate can hurt. I lean toward a fixed structure for anything that will take a long time to repay. Others will reasonably weigh it differently.
Here is what I would not do. I would not refinance the whole first mortgage to fund a patio. Not with fixed rates where they are.
What I’d Do Now
Start with the project, not the equity. Write down what you want to build and what it costs. Get contractor quotes in hand. Then decide how much you need to borrow. Most people do this backward, starting from how much the bank will lend.
Decide how you will repay it before you draw. If you plan to pay it back soon, a variable line carries less risk. If you plan to carry it for years, the prime exposure is the cost to price in. Ask yourself what happens if prime rises another quarter point, or two.
Ask what is fixed and what floats. Some HELOCs allow you to convert part of a balance to a fixed rate. Others do not. Some carry a cap on how far the rate can rise, and many do not. These terms vary by lender and by program. Ask for them in writing before you decide.
Compare offers from the same day. Rates have been moving. Freddie Mac’s survey rose in consecutive weeks through September 24. Two quotes pulled a few days apart are not a fair comparison. If you gather quotes, gather them close together. A broker can pull several at once, which is part of why people use one.
Understand what a lock does. A rate lock holds a quoted rate for a set period while the loan is processed. It applies to fixed-rate products such as a cash-out refinance or a fixed second lien. A HELOC’s rate floats with prime, so there is nothing to lock. If you have a fixed product in motion and you like the quoted rate, lock it. Floating on a rising trend is a bet. The September data does not suggest it is a good one.
Keep a cushion. Do not borrow to the edge of what is offered. Leave room for the next repair, a job change or a rate move. The underwater count, up 44% in ICE’s data, is a reminder that equity is not fixed in place.
Check your timing. The refinance market has gone quiet. A published survey for the week ending September 18 showed refinance applications 62% below a year earlier. That tells me rate-driven refinancing has largely stopped. A cash-out refinance for a backyard project is swimming against that current.
If you’re weighing a purchase or a refinance this fall, Lendmire can walk you through how the current programs fit your file.
Is the Fed Still Easing?
No. The Fed is tightening. It raised the target on September 16, and its projections imply more. The earlier cuts after September 2025 are over for now. If you took a HELOC a year ago expecting costs to keep falling, the direction has reversed.
There is also a reading problem worth flagging. The headline “HELOC rates hit a 2026 low” comes from surveys that lag the September 17 prime move. If prime stays at 7%, the direction from here is up, not down. Read those averages as a look in the rear-view mirror.
What the Data Does Not Tell Us
Several things are unknown, and I would rather say so. Equity data runs through the second quarter. The September rate surge is not in it. Whether equity keeps growing in the second half is an open question.
The Census Bureau’s new residential sales report, released September 24, put August new-home sales at a 684,000 annual rate. That is 6.4% above July and 2.0% below a year earlier. The margin of error on the monthly change is large, so the Census data does not show a real shift. NAR’s pending sales rose 0.3% in August but fell 4.7% from a year earlier, per its September 17 report. Those contracts were signed before the rate surge. They do not show how buyers are reacting to it.
I found no new federal action on home equity lending in the last 45 days. I also found no dated public data on how investors, self-employed borrowers or non-QM borrowers are behaving this month. I won’t guess.
For the end-to-end picture of how DSCR loans work — qualification, structures, and the full process — see Lendmire’s complete DSCR loans guide.
Frequently Asked Questions
Did the Fed’s September hike raise my HELOC cost?
If your HELOC is variable and tied to prime, yes, on any balance you carry. Prime rose with the Fed’s September 16 decision, to 7%. The change applies from when your lender’s terms say it does, so check your agreement. A fixed-rate home equity loan does not reprice.
Is record equity the same as money I can borrow?
No. ICE’s $11.7 trillion tappable figure is a calculated national total that leaves a cushion. What a lender extends on your home depends on its guidelines, your credit, and a valuation of the property. Check the HELOC programs page for the current guidelines, since they vary by lender.
Should I use a cash-out refinance for a backyard project?
Usually it is the costlier route this fall, but it depends on your first mortgage. A cash-out refinance resets the whole balance at today’s fixed rate. Freddie Mac’s survey was above 7% for the week of September 24. If your current first-lien rate is much lower, a second lien often keeps the cheaper loan intact.
Will the Fed hike again?
It is possible. According to the J.P. Morgan summary of the September projections, the median participant expects the funds rate to finish the year about one quarter point higher, which implies one more increase. Projections change with data, especially inflation. August core PCE inflation was running at roughly 3% annually, per the same summary. Plan for the chance of another increase if you carry a variable balance.
Why do HELOC rate surveys disagree?
They sample different borrowers and dates. Curinos figures reported on September 25 showed an average of 7.09% for top-tier applicants. Experian’s figure from September 11 was 7.53%. Neither reflects the full effect of the September 17 prime move, and neither is a rate you will necessarily see.
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As a mortgage broker (NMLS# 2371349), Lendmire arranges DSCR investor loans in 40 states plus Washington, D.C. — 41 markets — and, on its consumer platform, bank statement, home equity and down payment assistance financing in 16 states, through wholesale lenders. Lendmire never underwrites or funds a loan itself. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Federal Reserve FOMC statement, September 16, 2026
2. Advisor Perspectives, Fed decision of September 16, 2026
3. TheStreet, average HELOC rates and prime
4. J.P. Morgan Asset Management, FOMC statement summary, September 2026
5. Fox Business, Freddie Mac survey report, September 24, 2026
6. Fox Business, Freddie Mac survey report, August 20, 2026
7. Federal Reserve H.15 Selected Interest Rates
8. MBA weekly applications survey, September 23, 2026
9. NAR existing-home sales, August 2026
10. Yahoo Finance, Curinos HELOC averages, September 25, 2026
This article is part of Lendmire’s Mortgage News series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: Smart Home Tech After The Fed Hike: Should Record Equity Pay For It? · Outdoor Living Upgrades After The September Fed Hike: Tap Equity Or Wait? · The Attic Upgrade Decision As Rates Climb And Home Equity Hits A Record
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.