On paper, you look comfortable with a net worth in the six or seven figures. Your bank statement tells a different story: The checking account runs thin by month’s end.
Homeowners with a mortgage held a record $18 trillion in equity in the second quarter of 2026, according to an ICE Mortgage Monitor analysis, and about $11.7 trillion of that is tappable while keeping a 20% stake in the house.
The average mortgage holder sits on roughly $212,000 in accessible value. Nearly 40% of U.S. homeowners own free and clear, according to the Census Bureau, with the whole house as equity.
Homeowners can trade their home equity for income in several ways. For homeowners on a fixed income who cannot easily carry another bill, a home equity investment trades a share of the home’s value later for cash now, with no monthly payment.
If you are sitting on home equity but feel strapped for cash, Hometap invests in your property, providing you up to $600,000 now in exchange for an agreed-upon percentage of the home’s future value. No monthly payments, no income requirements, and credit scores as low as 575 may qualify.
See how much you could pre-qualify for. Available in AL, AZ, CA, DE, FL, GA, ID, IN, KY, MO, MT, NE, NV, NJ, NM, NY, NC, OH, OR, PA, SC, TN, UT, VA, and WI.
Suddenly having cash to spare may tempt homeowners to splurge on things they do not need. Do not do that. Carefully consider how you will use any equity released.
1. Make the house safe to grow old in
Widening a doorway, adding a walk-in shower, moving a bedroom to the main floor, or installing grab bars can keep you in a paid-for house instead of assisted living, which runs into the tens of thousands of dollars a year. The same features tend to help the home sell later.
2. Wipe out high-interest debt
Credit cards that carry a balance charged an average of about 22% in the second quarter of 2026, according to Federal Reserve data. On a fixed income the monthly minimums are a problem in their own right, tying up cash you need elsewhere.
Clearing those balances stops the interest and frees up the payment, which is often worth more month to month than the same dollars sitting in the walls. It holds up only if the spending that ran up the cards has stopped, or the balances build right back.
3. Buy a bigger Social Security check
For every year you delay claiming Social Security past your full retirement age of 67, the benefit grows by 8%, up to a permanent 24% at age 70, according to the Social Security Administration. The obstacle is covering your bills in the meantime, and home equity can fund that gap, letting you hold off and lock in a larger check for life.
Run the breakeven math and weigh the tradeoffs of waiting first, because the move rewards you only if you live well past your early 80s.
4. Cover a health or long-term care bill
A large medical or long-term care cost often gets paid by pulling a lump sum from a traditional IRA or 401(k). That withdrawal counts as taxable income, and a big one can push you into a higher bracket or raise your Medicare premiums through IRMAA surcharges the next year.
Tapping home equity instead can cover the bill without inflating your taxable income. It is not free money, but it may cost less than the tax hit it avoids.
5. Renovate where the money comes back
Not all improvements return their cost, and the spread is wide. Cheap exterior work tends to pay for itself: A garage door replacement recouped about 268% at resale in the 2025 Cost vs. Value Report from Zonda, with a steel entry door and stone veneer both topping 200%.
Big interior jobs fare far worse, at roughly 51% for a major kitchen and 42% for an upscale bath. The money is best spent on projects that make the house work better for you or hold their value, not on a showpiece remodel you will not recover at closing.
Not just for fun
Money pulled out and spent on nothing in particular is money gone. But when it funds one of these, equity that was earning nothing where it sat starts working for you. If a good use fits, releasing some may be well worth it. Check what Hometap can do for you, now.
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