Two numbers, both true right now, and most homeowners have never seen them sitting side by side.
I put a breakdown on Instagram this week that came out of the same conversation I keep having on the phone with homeowners. It starts with two numbers, both true right now.
The average credit card is charging 21.15%. The average home equity loan is charging 7.35%.
Same dollar. Same borrower. Triple the cost. (Sources: Federal Reserve G.19, May 2026; Curinos via Yahoo Finance, August 26, 2026.)
One caveat on that second number, because you deserve it up front. The 7.35% is what Curinos sees quoted to borrowers with a 780 credit score who still have plenty of equity left over after the loan. Yours will sit higher if either of those is not you. The gap narrows. It does not close.
The balance is not the problem
Americans are now carrying $1.26 trillion in credit card debt, up $21 billion in a single quarter. (Source: NY Fed Household Debt and Credit Report, Q2 2026.)
Roughly 175 million Americans have a credit card, and about 60% of them do not pay it off in full each month.
On a $35,000 balance at 21% APR, the interest charged in month one alone is $612. I walked through what that looks like over the life of the debt in an earlier post on the same $35,000, including a family I did this for.
At that rate, minimum payments barely dent the principal. The balance is not the problem. The rate is.
Meanwhile, equity hit a record
Homeowners are sitting on a record $18 trillion in equity.
Of that, $11.7 trillion is tappable, meaning it could be borrowed while still leaving a 20% cushion in the home. Across 47.5 million mortgage holders, that averages $212,000 per borrower. (Source: ICE Mortgage Monitor, August 2026, using Q2 2026 data.)
The most expensive debt in the country and the cheapest collateral in the country are usually sitting in the same house.
This almost never means refinancing your whole mortgage
A cash-out refinance replaces your entire loan at today's rate. If your first mortgage is in the 3s or 4s, a cash-out refi torches the best financial decision you ever made.
Keep the low first. Add a fixed second. A second lien or a HELOC sits behind your first mortgage and leaves that rate untouched, and the cards get paid. That is why more than half of all equity pulled out earlier this year came through second liens instead. In Q1 2026 it was 54%. (Source: ICE Mortgage Monitor, June 2026.)
A cash-out refi does still win in two spots. If you bought or refinanced between 2023 and 2025 at 7% or higher, or you are in an FHA loan and can shed the mortgage insurance, then one loan lowers your rate and clears the balances at the same time.
The move is not the lower payment
The move is taking the money you were sending to the card companies and pointing it at the new loan.
The lower payment is what makes that possible. Cut the payment, spend the difference, and in three years you are carrying both the second lien and a fresh set of card balances.
The honest part
This only works if the cards stay at zero.
You are converting unsecured debt into debt secured by your home. That is a real tradeoff, not a technicality. If something goes wrong later, what is at stake has changed.
Stretch the balance over 15 or 20 years and only pay the minimum, and you can end up paying more in total interest than you would have.
And if your income is already unstable, a credit counselor may be the better first call. I would rather say that than write you a loan you should not be taking.
Run the numbers on your own situation
Every figure above is a national average. Yours will be your own, and yours are the only ones that matter.
I do this across Forsyth County and the rest of North Georgia, and the first conversation costs nothing. Run the numbers before you do anything. Happy to run them with you, or you can start an application here and we will go from there.
Adam Buice Branch Manager & Senior Loan Officer, Stockton Mortgage NMLS #1619090 | Company NMLS #8259 404.416.6380 [email protected] https://adambuice.com
Equal Housing Lender. This is educational content, not an offer or commitment to lend. Rates, terms and payments vary by borrower and are subject to credit approval. Example figures are illustrative only.
