Every credit union is originating HELOCs; not enough are protecting them
Record home equity and locked-in mortgages are sending members back to the line of credit. Credit unions are originating more of them than anyone putting them in prime position for the opportunity that comes next.
Members are sitting on record equity — and reaching for it
Ask a lending officer what's driving traffic this year and the answer is equity. U.S. homeowners hold record home equity, with roughly $11 trillion1 of it tappable within conventional limits across about 48 million mortgage holders.2 Yet most of those owners are locked into first mortgages below 6%, so a cash-out refinance makes little sense. The home equity line of credit (HELOC) has become the practical way for members to reach that value without giving up a cheap first mortgage.
The numbers show it. Total home equity originations rose 14.3% year over year in the fourth quarter of 20251 — a sixth straight quarterly gain — while HELOC originations reached about $271 billion for 2025,2 up from $230 billion a year earlier, and now make up roughly 87% of all home-equity lending. Outstanding HELOC limits passed $1 trillion,2 and the Mortgage Bankers Association expects HELOC balances to grow nearly 10% in 2026.3
Credit unions are leading the surge
Here's the part credit unions should sit up for: They're originating more HELOCs than anyone. Credit unions held the largest single share of HELOC originations4 — roughly 36%, heading into 2026, ahead of large banks, near 28%. Members already turn to their credit union for equity lending; the current cycle has simply widened that lead. That's a franchise strength worth building on, not just volume statistics.
The next chapter is protection, not just origination
Booking more lines is good. Protecting them is where the durable value sits — and it's a story purpose-built for credit unions. Payment protection, offered as credit insurance or debt protection, cancels or reduces a member's outstanding balance if they die, are unable to work due to injury or illness, or involuntarily lose their job.5 For the members, it's a safety net on a debt secured by their home. For the credit union, it does two things at once: It reduces charge-offs if a borrower can no longer pay, and it generates non-interest income at a time when margins are tight.
The delivery model is changing fast. As more HELOCs move online, the way protection is offered is evolving, as well. The 2026 shift is toward embedded protection — presenting coverage inside the digital loan application rather than as a paper add-on at closing — paired with modernized, self-service digital claims. That's a natural fit for the same digital HELOC flows credit unions are already building. (Every HELOC already requires the member to keep homeowners' coverage on the collateral; payment protection simply extends that safety-net logic from the house to the household's income.) Members increasingly expect simple, digital experiences and clear choices throughout the lending process, including opportunities to protect their financial obligations.
Why the timing matters
Two forces make protection especially relevant right now. First, the equity cushion is thinning as equity growth has slowed. The equity-rich share of mortgaged homes fell to about 43% in the first quarter of 2026 — the lowest since 2021 — and more than 1.1 million borrowers ended 2025 underwater, the most since early 2018.6 Second, a wave is coming as about 901,000 HELOC accounts will reach the end of their draw period by the first quarter of 2027. As those lines move into repayment and monthly payments step up, a member's ability to keep paying becomes the whole ballgame — and a renewal conversation is the perfect moment to re-offer protection.
The takeaway for credit unions
The opportunity is already here. The institutions that integrate payment protection into today’s HELOC growth strategy will likely be better positioned to strengthen member relationships and portfolio performance tomorrow. The credit unions that win this cycle won't simply originate the most HELOCs — they'll protect the most.
Three moves make that real:
- Build payment protection into the digital HELOC application so it's a clear choice, not an afterthought.
- Equip lending staff to explain credit insurance and debt protection in plain terms.
- Treat the 2026–27 end-of-draw pipeline as a re-engagement and re-protection opportunity, not just a renewal.
Record equity created the HELOC boom. Protecting those balances — and the members behind them — is how credit unions turn a cyclical surge into lasting relationships and income.
How Securian Financial can help
Credit unions are leading the HELOC market. Securian Financial can help them protect that growth with credit insurance and debt protection solutions that support members, strengthen portfolios and create opportunities for non-interest income. Learn more at securian.com/financial-institutions.
