New Hampshire’s banking industry has entered new real estate lending territory due to the recent up-and-down gyrations of interest rates.

Over the past 10 years in New Hampshire, residential real estate loan activity in the state has dramatically shifted away from a heavy emphasis on purchase mortgages to greater focus on non-purchase loans.

Indeed, home equity lines of credit (HELOCs) and other home equity loans now make up the largest share of residential mortgage lending statewide, in dollar terms, since at least 2019, according to data from the Warren Group, the real estate data analytics firm and publisher of The Registry Review and Boston’s Banker & Tradesman.

During the first six months of 2026, HELOCs and residential refinance loans issued by banks, credit unions and non-bank lenders accounted for a combined $3.72 billion compared to $2 billion for residential purchase mortgages in New Hampshire.

Similar loan trends – with HELOCs and residential refinance loans outpacing residential purchase mortgages – also occurred during the first six months of 2020 through 2025.

But in 2019, before COVID-19 and its associated, dramatic interest-rate fluctuations, purchase loans outpaced HELOCs and refinances, as was the case in years prior to this decade, according to Warren Group data.

The main reason for the residential loan-product shift in the early 2020s: historically low mortgages rates, often in the 3 percent range, encouraged a massive wave of refinancings across the state as homeowners sought to secure mortgages at super-low rates.

But the main reason for the loan-product shift in more recent years: rising interest rates in 2022 and 2023 ended up hurting home sales, and thus purchase loans, while at the same time HELOC products began to rise in popularity.

In addition, refinance loans, which took a huge multibillion-dollar hit to loan volumes when interest rates began to rise in 2022, have experienced a mini-comeback over the past 10 months or so, helping to further boost lending institutions’ non-purchase loan activity.

The result: non-purchase loans made up 34.99 percent of the total loans issued in New Hampshire, by dollar volume, in the first half of 2026.

A Shift of Surprising Magnitude

New Hampshire bank executives said they were quite aware of the shift in loans away from purchase mortgages to HELOCs and other equity-loan products.

But some said they didn’t realize the magnitude of the statewide shift away from purchase loans.

“I wouldn’t have expected those numbers,” said Tyler Gilday, chief retail lending officer at Mascoma Bank in Lebanon.

Gilday emphasized that purchase mortgages remain a larger portion of overall real estate lending at Mascoma, despite the statewide shift away from purchase products.

Ben Wheeler, CEO of Piscataqua Bank in Portsmouth, said his bank also continues to see a “quite good” purchase-mortgage business.

But he agreed that the overall statewide shift away from purchase loans is significant.

“I’m a little surprise to see those [statewide] numbers,” he said. “A lot has changed in recent years.”

Fabien Thierry, head of home equity lending at Rhode Island-based Citizens Bank, which is by far the largest overall real-estate lender in New Hampshire, said the purchase-mortgage business has definitely taken a hit in recent years.

“Purchase mortgages are still an important part of our business, but the market looks different than it did a few years ago,” said Thierry, in an email interview with The Registry Review. “Limited housing inventory and affordability pressures are shaping a lot of what we see.”

He added: “Many homeowners are choosing to remain in their current homes longer rather than move and take on a significantly higher mortgage rate. That makes products that let them tap existing equity or adjust their financing more attractive than they used to be.”

High Rates Squeeze Purchase Lending

The purchase mortgage market has definitely been helped by the relentless rise in home prices over the years in New Hampshire, leading to higher dollar-value mortgages.

But that rise wasn’t enough to offset the overall plunge in the number of purchase mortgage deals statewide, from 8,389 in the first half of 2019 to 4,126 in the first half of 2026, according to data

The most recent result of the decline in deals: During the first six months of 2026, banks, credit unions, mortgage companies and other lenders did about $2 billion in purchase-loan business, down 13.5 percent compared to the same period in 2025.

But in the first six months of 2026, refinance loans hit $2.84 billion, up 22.6 percent compared to 2025, while HELOCs hit $884.16 million, up 9.7 percent compared to the same period in the year prior.

Mascoma’s Gilday said the “locked in, locked down, locked out” phenomenon – in which many homeowners are locked into low pre-2022 interest rates and don’t want to move, while many first-time owners are locked out of today’s market due to high prices and low inventory – has clearly hit the purchase-mortgage business.

“It’s been a unique problem,” Gilday said. Purchase “mortgages have been hurt by lower inventory and sales.”

 Why Are HELOCs So Popular?

With so many people opting to stay in their current homes rather than sell and move elsewhere, HELOCs have become a popular way for homeowners to tap into the growing equity of their homes for renovations, additions and other purposes.

Indeed, HELOCs’ share of the state’s overall real estate lending market has risen from 4.8 percent during the first half of 2020 to 15.4 percent in during the same time period, in 2026, with lines of extended credit growing from $363 million to $822 million during that same time period, according to Warren Group data.

Most recently, banks accounted for about 67 percent of all HELOC activity in New Hampshire, compared to 14.5 percent for credit unions and 19 percent by other lending institutions, according to data.

Mascoma’s Gilday emphasized that total lines of credits are not the same as actual dollar amounts drawn on those lines of credit.

“Someone might take out a $500,000 HELOC and then only use $20,000 of it,” he said.

Still, the overall 126 percent growth of total lines of credit since 2019 has been impressive by any standard.

And it’s mostly being driven by people opting to stay in their homes longer, rather than selling and moving elsewhere.

“Recent Citizens data found that nearly half of homeowners, 44 percent, say renovating their current home feels more realistic than moving in the next few years, and that mindset is helping drive the rise in HELOC demand,” said Citizens Bank’s Thierry.

A Refinance Roller-Coaster

It’s been a roller-coaster ride for the refinance market since the start of the decade.

New Hampshire refi loan volume hit a high of $7.27 billion in the first half of 2021, the year before the Federal Reserve began raising its benchmark interest rate, then plunged to $1.45 billion in 2023, or by 80 percent, after consumer interest rates responded and began their push upward, according to data.

But the refinance business has been slowly inching back up in New Hampshire, hitting $2.32 billion in the first half of 2025 and then $2.84 billion during the same time period this year.

Mascoma’s Gilday said the refi business was helped late last year when the typical rate on a 10-year Treasury note dropped below 4 percent, making refinances more attractive to people who have taken out mortgages at higher rates in recent years.

“But the Iran War pushed the 10-year Treasury back up to 4.5 percent. There was a brief window there for refinancings, but it’s mostly closed now due to the war,” Gilday said.

In general, Citizens Bank’s Thierry said the ongoing popularity of equity loan products will remain relatively high as long as higher interest rates and the low inventory of homes for sale discourage people from leaving their homes.

“Looking ahead, any improvement in housing supply or mortgage rates could support more activity across the market,” Thierry said. “Until then, the equity homeowners have built gives them real options, and I expect many to keep putting it to work.”