Chase formally reenters HELOC business after five years

Chase Home Lending has resumed offering home equity lines of credit after a five-year absence from the product, the company announced.

While parent JPMorgan Chase has participated in HELOC securitizations, it did not originate or service the loans.

In April 2020, just as the pandemic entered full swing, Chase paused taking new applications for HELOCs because of the potential for economic turmoil.

Approximately two years later, comments from Marianne Lake, co-CEO of JPMorgan's consumer and community banking unit, at an investor day event indicated the company was looking into offering more HELOCs, adding the bank would tread lightly if it did reenter the business.

In the interim since Chase pulled back, alternatives like home equity investment products have entered the market. But the HEI business has generated some controversy, including a Massachusetts lawsuit against Hometap, which alleges its offering is actually a loan. A state judge has rejected Hometap's motion to dismiss the case.

When asked why it is getting back into this now, Chase pointed to home values remaining high. But various sources are now reporting those gains have plateaued.

Recent developments with home values

Tuesday's S&P Cotality Case-Shiller Index release found it rose 1.9% on an annual basis in June, a marked slowing of the pace of growth; at the start of 2024, prices grew by 6.4%.

When compared with May, prices grew by just 0.1% on an unadjusted basis.

The Federal Housing Finance Agency Home Price Index fell down 0.2% on a seasonally adjusted basis between May and June. It was flat in the second quarter versus the first quarter.

Compared with one year ago, prices rose by 2.9% in the second quarter, according to the FHFA HPI findings.

How HELOCs are performing

Data from the Federal Reserve Bank of New York noted HELOC balances have increased during the second quarter by $9 billion to a total of $411 billion. It marks 13 consecutive quarters of increase. The annual increase was $31 billion.

Serious delinquencies (90 days or more late on payments) for HELOCs also increased to 115 basis points from 51 basis points in the second quarter of 2024.

Why Chase restarted HELOC lending

Chase's new product is available nationwide, except in Texas. Texas law bars the HELOC product from being offered in the state.

During the time it no longer offered HELOCs, Chase did provide cash-out refinance products to borrowers looking to tap their equity, noted Erik Schmitt, digital channel executive at Chase Home Lending.

However, Chase has received "increased demand from customers looking for more flexible options to borrow against their home's equity," Schmitt said.

While this is the formal roll-out, HELOCs have been available to some Chase customers for several months.

"Amid rolling the product online HELOCs were initially introduced to branches in all available states except Texas in Spring 2025," said Schmitt. "Since then, we've seen a positive response from customers."

Chase has created a HELOC calculator, where consumers can enter details about their property.

"It first assesses the customer's eligibility by considering factors such as property type and occupancy type," Schmitt explained. It uses that information to provide real-time rates, the one-time fees and it estimates monthly costs for the borrower.