Fewer Americans are borrowing against their homes after getting nailed in the financial crisis - and it's hurting banks

• The number of home equity lines of credit, or Helocs, has been cut in half since the financial crisis, according to Bloomberg.
• It's taken away a big chunk of revenue for banks.
• Americans have grown wary of the loans after 2008. Today, there are easier ways to access credit that consumers often prefer.
• Read more on Business Insider.

The housing market recovery over the last decade hasn't been matched by homeowners taking out home equity lines of credit, or Helocs, which are loans that use property as collateral.

The change is hurting banks, which once counted on homeowners taking the loans as a solid source of revenue, Bloomberg reported Monday. At Bank of America, Helocs produced $552 million of interest income in the third quarter, down almost 70% from a decade ago, the report said.

A main reason is that American homeowners have grown wary of the products following the financial crisis.

The years leading up to the crisis saw doubled volumes of Helocs, according to the Federal Reserve Bank of New York. Because property prices were so high at the same time, homeowners could borrow significantly against their homes to boost consumer spending - some used loans for renovations, college payments, and more, according to the report.

But, when the housing bubble burst, that left those who had taken out the so-called "piggy bank" mortgages unable to repay debts when the prices of the houses they'd borrowed against fell.

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Now, many homeowners are foregoing the products. In the last decade, the number of Helocs has fallen by almost half, according to data from the New York Fed. That means in 2016, only 4% of households in the US had an open home equity line, down from 10% during the 2000s.

In addition, low mortgage rates today and easy access to different types of personal loans have made Helocs less appealing. Currently, the typical interest rate on a 30-year mortgage is lower than the rate on a Heloc, which means that borrowers are more likely to go for a cash-out refinancing, Bloomberg reported, citing Rutger van Faassen, a vice president of consumer lending at Informa.

Often borrowers would also rather apply for personal loans, many of which can be done online and approved quickly, than fill out paperwork and wait 45 days for a Heloc, the report said. Consumers can be more comfortable with personal loans too because if they default, they don't risk losing their homes like they would with a Heloc, according to Bankrate.

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