Here's how to boost your home equity in 2026, according to experts
The majority of homeowners have seen their home equity rise considerably, along with their home values, in recent years. The average homeowner with a mortgage now holds roughly $204,000 in tappable equity, according to the latest ICE Mortgage Monitor data. But those equity gains may slow as home value growth cools and borrowing costs remain elevated for new mortgage loans, as well as home equity loans and home equity lines of credit (HELOCs).
That means building or preserving your home equity in 2026 may require you to make some intentional moves and not just wait for home appreciation to drive up your home's value. What are the best moves to boost your home equity in 2026, though? And what should homeowners prioritize?
Find out how affordable your home equity borrowing option could be now.
Here's how to boost your home equity in 2026, according to experts
If you want to boost your home equity in the new year, it may help to consider the following expert-recommended strategies.
Pay down principal and reduce debt
With U.S. home price increases slowing, 2026 may be a good year to increase your home equity by paying down the principal balance on your mortgage.
"Increasing your monthly payment above and beyond the required monthly payment amount is a great way to build equity fast," says Michelle Parkison, senior vice president at AD Mortgage. "If you can afford the additional monthly cost, any funds above the required payment go directly to paying down the loan principal, which means you own more of that home."
So, you may want to consider applying tax refunds, work bonuses and any other cash windfalls you receive toward your home loan's principal balance.
Compare your home equity borrowing offers online now.
Invest in value-adding improvements and maintenance
Another proven way to boost your home's equity is by directly increasing your property value through improvements and repairs. For example, you'll get the strongest return on your investment and recoup an average of 268% of your costs by replacing the garage door, according to Zonda's 2025 Cost vs. Value Report. Or, a minor kitchen remodel and a wood deck addition return an average recouped value of nearly 113% and 95%, respectively.
"Homebuyers love a good outdoor space," says Parkison. "Look into an enticing backyard retreat that you can enjoy. Kitchens are another big area that can make or break a home. Focus on areas in the house that become gathering spaces."
Stay mindful of market and timing factors
As home values cool, make sure you understand your local market's value trends before you invest in upgrades.
"This is always important—a very good idea to discuss any updates you are considering with a local real estate agent who can advise on what will get you the best bang for your buck," says Sarah DeFlorio, vice president of mortgage banking at William Raveis Mortgage.
You should also be sure to avoid a common home equity mistake by matching any upgrades you make with the lot and neighborhood.
"Homeowners make mistakes in both building and over-improving homes that are on poor lots or in neighborhoods that are not desirable," Jeff Lichtenstein, president and broker at Echo Fine Properties, says.
Strong surrounding growth can support higher values, though.
"If the neighborhood surroundings are growing, then even if it's top of the market, there is room to grow—even if it's a record price—so long as the lot is a premium," Lichtenstein says.
It's also important to factor in timing.
"Thinking about how long you want to stay in your home should be a main factor in how you grow home equity," Parkison says. "If your answer is that you are not going to stay in your house very long, focus on cheaper enhancements to your home that will make it more attractive."
Recast your mortgage
DeFlorio suggests an often-overlooked strategy to increase your equity position: a mortgage recast. With a recast, you make a large one-time payment toward your principal, which increases your equity immediately, and your monthly payment is recalculated based on your lower balance. With mortgage rates still elevated, a recast can be a beneficial way to pay down principal instead of refinancing into a higher rate.
"Not all mortgages offer this feature, but a recast is a great way to boost your equity if you have extra funds lying around. This means you pay down the principal balance, and the monthly payment for the mortgage will adjust to reflect the lower loan amount," DeFlorio says.
The bottom line
Growing home equity in 2026 may take a multi-faceted approach rather than waiting for property values to rise. And, as we get ready to turn the page to a new year, it's a great time to create your home equity growth plan. In particular, prioritize reducing your loan balance, making smart home upgrades and understanding your local market and how long you plan to stay in your home. These moves could ultimately impact your equity growth far more than speculating on future home appreciation alone.
