Most Bostonians take out home equity loans to improve their homes, but large minorities of homeowners end up spending their loans on cars, major home purchases, and emergency expenses, according to a survey by TD Bank.
Three out of every five home loans went toward home renovations and expansions, the survey found, but a third of Boston residents used their equity loans to buy a car, despite only 21 percent expecting to use their loans for that reason at the outset. Similarly, 13 percent of borrowers said they expected to their loans for emergency expenses, but 21 percent actually did.
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The margin of error for the local sample was high, at 9 percentage points.
Michael Kinane, TD Bank’s head of mortgage and consumer lending products, said the numbers were not troubling. Many consumers ultimately do not draw on emergency lines of credit, he said, and banks are “more careful” about their lending than they were before the recent recession.
“It’s actually a very positive sign that consumers are confident in their borrowing abilities,” Kinane said.
Home equity loans have been rising in Massachusetts since 2011. Previously, borrowing had dropped off after home values collapsed in the recession that started in 2007. Earlier this summer, Massachusetts banks reported their home equity loan volumes had risen as much as 40 percent.
Compared to its national sample, TD Bank reported that homowners in Greater Boston were less likely to use their home loans for debt consolidation and health care expenses. In the rest of the United States, debt consolidation was the second-most popular reason for borrowing against one’s home; in Boston, it was the fourth-most popular reason. Health care expenses were the reason given for 18 percent of borrowing nationally, but just 11 percent in Boston.
The survey interviewed more than 1,300 homeowners nationally and 115 borrowers in Greater Boston.
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Jack Newsham can be reached at jack.newsham@globe.com. Follow him on Twitter @TheNewsHam.