Fast-rising home prices gave homeowners more equity than many expected, and they are now tapping that equity at the fastest rate in eight years.

Homeowners gained a collective $570 billion throughout 2016, bringing the number of homeowners with "tappable" equity up to 39.5 million, according to Black Knight Financial Services. Those borrowers have at least 20 percent equity in their homes.

But the fact that mortgage rates were lower last year makes it less likely today's borrowers would want to refinance this year. About 68 percent of tappable equity belongs to borrowers with mortgage rates below today's levels. The vast majority of these borrowers, more than three-quarters, also have FICO credit scores well above average, which gives them more options for cashing out on their homes.

Enter the HELOC. Home equity lines of credit are second loans taken outside the primary mortgage, and millennials are leading the pack to cash in.

"The last time interest rates rose as much as they have over the past few months, we saw cash-out refinances decline by 50 percent," said Ben Graboske, executive vice president at Black Knight. He expects to see more HELOCs instead.

And more millennials are using HELOCs than Gen-Xers or baby boomers, according to a survey by TD Bank. In fact, more than a third of millennials said they are considering applying for a HELOC in the next 18 months, which is more than twice the rate as Gen-Xers and nine times that of baby boomers.

"We were a little surprised about that," admitted Mike Kinane, general manager of home equity products at TD Bank. "I think millennials are taking a more conservative approach, but they recognize that HELOCs have a good purpose, especially for remodeling."

Home remodeling was the No. 1 reason for taking out a HELOC last year, according to TD Bank, with debt consolidation coming in second. The home remodeling industry has seen a huge boost in the last year, as home prices rise and the supply of homes for sale shrinks. Homeowners are finding it harder to find and afford a suitable move-up home, so they're increasingly choosing to stay and remodel.

Millennials are entering the housing market more slowly than previous generations, and those who have in the past few years tended to buy cheaper fixer-uppers. In just a few years, however, they've gained enough equity from rising prices to be able to pull cash out and remodel. They are, however, still very conservative. Borrowers doing cash-out refinances last year still had close to 35 percent equity left in their home, the lowest on record, with an average credit score of 750, according to Black Knight. Borrowers are still using HELOCs at barely one-third the rate they did in 2005.

Cash-out refinances accounted for nearly half of all refinances in the last quarter of 2016, as homeowners withdrew $31 billion. That was the most since 2006 and represented a 50 percent increase from the same quarter of 2015.

Millennials appear to be more focused on value than amenities. Close to half said they would renovate their homes to increase value, according to TD Bank, while other generations said they wanted the house to look more "up to date." Millennials seem to want to avoid leveraging their homes the way their parents did, choosing to hold on to more equity and try to grow it as much as possible. Banks are also more conservative in offering these loans, but Kinane said a lot of homeowners are still leaving a lot of money on the table … or in the home.

"Customers are borrowing a lot less than they could borrow if they needed to," he added.