The 10-year treasury constant maturity rate in the U.S. is forecast to decline by 0.8 percent by 2026, while the 30-year fixed mortgage rate is expected to fall by 1.6 percent. From seven percent in the third quarter of 2023, the average 30-year mortgage rate is projected to reach 5.4 percent in 2026.

Bulgaria was at the top of this ranking of 29 European countries sorted by the growth rate of their volume of loans to households in 2023. Loans to households in the European Union and the European Economic Area are expected to grow on average by over three percent in 2024. Meanwhile, the loans and advances market in Germany is expected to increase by 2.2 percent in 2024. Overall, the total value of the household loans market in the EU as a whole is expected to keep growing during that timeline.

The U.S. mortgage market has declined notably since 2020 and 2021, mostly due to the effect of higher borrowing costs on refinance mortgages. The value of refinancing mortgage originations, amounted to 86 billion U.S. dollars in the first quarter of 2024, down from a peak of 851 billion U.S. dollars in the fourth quarter of 2020. The value of mortgage loans for the purchase of a property recorded milder fluctuations, with a value of 291 billion U.S. dollars in the first quarter of 2024, and a market peak of 477 billion U.S. dollars in the first quarter of 2022. According to the forecast, mortgage lending is expected to slightly increase until the end of 2025. The cost of mortgage borrowing in the U.S. Mortgage interest rates in the U.S. rose dramatically in 2022 and continued to increase in 2023. In 2020, a homebuyer could lock in a 30-year fixed interest rate of under three percent, whereas in 2023, the average rate for the same mortgage type exceeded seven percent. That has led to a decline in homebuyer sentiment, and an increasing share of the population pessimistic about buying a home in the current market. The effect of a slower housing market on property prices and rents According to the S&P/Case Shiller U.S. National Home Price Index, housing prices experienced a slight correction in early 2023, as property transactions declined. Nevertheless, the index continued to grow in the following months. On the other hand, residential rents have increased steadily since 2000.

Forecast: Bank Lending Interest Rate in Italy 2024 - 2028 Discover more data with ReportLinker!

Forecast: Bank Lending Interest Rate in South Korea 2024 - 2028 Discover more data with ReportLinker!

Policy interest rates in the U.S. and Europe are forecasted to decrease gradually between 2024 and 2027, following exceptional increases triggered by soaring inflation between 2021 and 2023. The U.S. federal funds rate stood at 5.38 percent at the end of 2023, the European Central Bank deposit rate at four percent, and the Swiss National Bank policy rate at 1.75 percent. With inflationary pressures stabilizing, policy interest rates are forecast to decrease in each observed region. The U.S. federal funds rate is expected to decrease to 3.5 percent, the ECB refi rate to 2.65 percent, the Bank of England bank rate to 3.33 percent, and the Swiss National Bank policy rate to 0.75 percent by 2025. An interesting aspect to note is the impact of these interest rate changes on various economic factors such as growth, employment, and inflation. The impact of central bank policy rates The U.S. federal funds effective rate, crucial in determining the interest rate paid by depository institutions, experienced drastic changes in response to the COVID-19 pandemic. The subsequent slight changes in the effective rate reflected the efforts to stimulate the economy and manage economic factors such as inflation. Such fluctuations in the federal funds rate have had a significant impact on the overall economy. The European Central Bank's decision to cut its fixed interest rate in June 2024 for the first time since 2016 marked a significant shift in attitude towards economic conditions. The reasons behind the fluctuations in the ECB's interest rate reflect its mandate to ensure price stability and manage inflation, shedding light on the complex interplay between interest rates and economic factors. Inflation and real interest rates The relationship between inflation and interest rates is critical in understanding the actions of central banks. Central banks' efforts to manage inflation through interest rate adjustments reveal the intricate balance between economic growth and inflation. Additionally, the concept of real interest rates, adjusted for inflation, provides valuable insights into the impact of inflation on the economy.

Forecast: Household Expenditure on Mortgage Interest and Charges in the US 2022 - 2026 Discover more data with ReportLinker!

The benchmark interest rate in Ireland was last recorded at 4.50 percent. This dataset provides - Ireland Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

The Dutch Central Bank (DNB) estimated that the growth of mortgage lending will slow down in 2023 and 2024, after originations rose by 3.5 percent in 2022. That can be explained with the accelerated house price growth in recent years and the higher interest rates, eroding housing affordability. Within Europe, the Netherlands counts as one of the countries with the highest mortgage debt among private individuals. This has a political background as the Dutch tax system allowed homeowners to deduct interest paid on mortgage from pre-tax income for a maximum period of thirty year, essentially allowing for income support for homeowners. In the Netherlands, this system is known as hypotheekrenteaftrek.

Forecast: Bank Lending Interest Rate in Viet Nam 2024 - 2028 Discover more data with ReportLinker!

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Home Equity Lending Market Size 2025-2029

The home equity lending market size is forecast to increase by USD 48.16 billion at a CAGR of 4.7% between 2024 and 2029.

The market is experiencing significant growth due to several key trends. One major factor driving market expansion is the massive increase in home prices, which has resulted in homeowners having more equity in their properties. Another trend is the rise in residential property values, leading to an increase in the number of homeowners with sufficient equity to access loans or lines of credit, with property management and digital lending playing a significant role in facilitating these transactions.
However, the lengthy procedures involved in securing these loans can present challenges for both lenders and borrowers. Despite this, the benefits of lending, such as lower interest rates compared to other types of debt, make it an attractive option for many consumers looking to finance home improvements, debt consolidation, or other major expenses. Overall, the market is poised for continued growth in the coming years.

What will be the Size of the Home Equity Lending Market During the Forecast Period?

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The market in the United States has experienced significant growth, driven by the increasing collateral value of residential real estate and the resulting equity available to borrowers. Monetary authorities' efforts to keep inflation in check and stable housing prices have contributed to this trend. Homeowners have utilized loans and lines of credit to fund various expenses, including home improvements, tax deductions, and debt consolidation.



The interest rate on these loans often remains competitive with other forms of borrowing, making them an attractive option for many. Banks and credit unions are the primary providers of these loans, offering borrowers the ability to access a lump sum amount or a revolving line of credit secured against their residence and property. Regulatory restrictions on high-interest debt and outstanding mortgages may impact the market's growth, but the demand for loans is expected to remain strong as homeowners continue to seek ways to access the value of their homes.

How is this Home Equity Lending Industry segmented and which is the largest segment?

The home equity lending industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Source

  Mortgage and credit union
  Commercial banks
  Others


Distribution Channel

  Offline
  Online


Geography

  North America

    Canada
    US


  Europe

    Germany
    UK
    France


  APAC

    China
    Japan
    South Korea


  South America



  Middle East and Africa

By Source Insights

The mortgage and credit union segment is estimated to witness significant growth during the forecast period.

Home equity lending is a financing solution for homeowners looking to access the value of their property. Mortgage and credit unions serve as trusted providers in this market, offering various financial services including loans and lines of credit. These institutions not only offer consumer loans but also manage deposits, handle checking and savings accounts, disburse credit and debit cards, and grant house loans. Credit unions, in particular, provide personalized services with live representatives, ensuring a human touch in understanding complex financial matters.

Homeowners can secure competitive rates on loans through credit unions, making them a preferred choice over other lenders. With a strong focus on consumer protection and affordability, mortgage and credit unions are an excellent option for homeowners seeking to tap into their for renovation projects or other financial needs.

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The mortgage and credit union segment was valued at USD 82.39 billion in 2019 and showed a gradual increase during the forecast period.

Regional Analysis

North America is estimated to contribute 47% to the growth of the global market during the forecast period.

Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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The market in North America experienced notable growth in 2024, driven by the increase in home values and fewer regulations. Homeowners in Canada have been utilizing their properties as collateral for loans, with residential mortgages accounting for 74% of household debt and lines of credit for 16%. The balance of Lines of Credit (HELOC) rose by 1% to USD 128 billion in February 2022.

Bank Lending Rate in Netherlands decreased to 3.38 percent in January from 3.47 percent in December of 2024. This dataset provides - Netherlands Bank Lending Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

Mortgage interest rates worldwide varied greatly in 2024, from less than four percent in many European countries, to as high as 44 percent in Turkey. The average mortgage rate in a country depends on the central bank's base lending rate and macroeconomic indicators such as inflation and forecast economic growth. Since 2022, inflationary pressures have led to rapid increase in mortgage interest rates. Which are the leading mortgage markets? An easy way to estimate the importance of the mortgage sector in each country is by comparing household debt depth, or the ratio of the debt held by households compared to the county's GDP. In 2023, Switzerland, Australia, and Canada had some of the highest household debt to GDP ratios worldwide. While this indicator shows the size of the sector relative to the country’s economy, the value of mortgages outstanding allows to compare the market size in different countries. In Europe, for instance, the United Kingdom, Germany, and France were the largest mortgage markets by outstanding mortgage lending. Mortgage lending trends in the U.S. In the United States, new mortgage lending soared in 2021. This was largely due to the growth of new refinance loans that allow homeowners to renegotiate their mortgage terms and replace their existing loan with a more favorable one. Following the rise in interest rates, the mortgage market cooled, and refinance loans declined.

The benchmark interest rate in Germany was last recorded at 4.50 percent. This dataset provides - Germany Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

The benchmark interest rate in Japan was last recorded at 0.50 percent. This dataset provides - Japan Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

Forecast: Bank Lending Interest Rate in Japan 2022 - 2026 Discover more data with ReportLinker!

Georgia MOF Forecast: Interest Rate: GEL: Deposits data was reported at 6.260 % in 2022. This records a decrease from the previous number of 6.760 % for 2021. Georgia MOF Forecast: Interest Rate: GEL: Deposits data is updated yearly, averaging 9.769 % from Dec 1996 (Median) to 2022, with 27 observations. The data reached an all-time high of 18.425 % in 1998 and a record low of 6.260 % in 2022. Georgia MOF Forecast: Interest Rate: GEL: Deposits data remains active status in CEIC and is reported by Ministry of Finance of Georgia . The data is categorized under Global Database’s Georgia – Table GE.M005: Market Deposit and Lending Rates: Forecast: Ministry of Finance of Georgia.

Bank Lending Rate in Thailand remained unchanged at 6.75 percent in February. This dataset provides - Thailand Prime Lending Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

Key information about Germany Long Term Interest Rate

• Germany Long Term Interest Rate: Month Avg: Germany: ECB Harmonised was reported at 2.18 % pa in Dec 2024, compared with 2.31 % pa in the previous month.
• Germany Long Term Interest Rate data is updated monthly, available from Jan 1990 to Dec 2024.
• The data reached an all-time high of 9.09 % pa in Oct 1990 and a record low of -0.65 % pa in Aug 2019.
• Long Term Interest Rate is reported by reported by CEIC Data.

• In the latest reports, Germany Short Term Interest Rate: Month End: EURIBOR: 3 Months was reported at -0.57 % pa in Nov 2021.
• The cash rate (Policy Rate: Month End: Main Refinancing Operations) was set at 3.15 % pa in Dec 2024.
• Germany Exchange Rate against USD averaged 0.92 (USD/EUR) in Jun 2023.

Due to interest rates decreasing in recent years, mortgages in the United Kingdom have become overall more affordable: In 2007, when mortgages were the least affordable, a home buyer spent on average 23.6 percent of their income on mortgage interest and 7.2 percent on capital repayment. In 2019, the year with the most affordable mortgages, mortgage interest accounted for 5.9 percent and capital repayment was 11.5 percent of their income. As interest rates increase in response to the rising inflation, mortgage affordability is expected to worsen. Though below the levels observed before 2007, the total mortgage repayment between 2022 and 2026 is expected to exceed 23 percent of income.