Key Takeaways
- Most lenders allow you to borrow up to 80-85% of your home's appraised value, minus your current mortgage balance.
- Your combined loan-to-value (CLTV) ratio determines your maximum borrowing limit, with some lenders allowing up to 90% for well-qualified borrowers.
- Shopping multiple lenders can help you find higher borrowing limits and better terms.
Tapping into your home equity can put tens of thousands of dollars within reach, but lenders won’t let you borrow it all. Most cap your borrowing at 80-85% of your home’s value minus what you still owe on your mortgage.
Your actual limit depends on factors like your credit score, income, and which lender you choose. Below, we’ll walk through how to calculate your borrowing power, what affects your approved amount, and how to maximize what you can get.
In this article (Skip to..)
- How much home equity can you borrow?
- How to calculate your home equity loan limit
- Factors that affect how much you can borrow
- Home equity loan vs HELOC borrowing limits
- How to borrow more from your home equity
- FAQ
How much home equity can you borrow?
You can generally borrow up to 85% of your home’s appraised value, minus what you still owe on your mortgage. So if your home is worth $400,000 and you owe $250,000, you might qualify for up to $90,000 with a lender that allows 85% loan-to-value.
That said, not every lender goes that high. Many cap borrowing at 80% of your home’s value, while others may stretch to 90% if you have excellent credit and a strong income. The range depends on the lender and your financial profile.
Here’s the key point: lenders want you to keep some equity in your home as a cushion. That’s why you’ll never be able to borrow 100% of your equity with most lenders, even if you have a perfect credit score.
How to calculate your home equity loan limit
Before you start shopping for lenders, it helps to know roughly how much you might qualify for. A quick calculation can give you a realistic starting point.
Check your home equity loan options. Start here(Appraised Home Value × LTV Limit) - Current Mortgage Balance = Potential Loan Amount
Let’s break that down:
- Appraised home value: What your home is worth today based on a professional appraisal
- LTV limit: The maximum percentage of your home’s value the lender will allow (typically 80-85%)
- Current mortgage balance: What you still owe on your primary mortgage
Sample calculation for a home equity loan:
Say your home appraises at $350,000 and you owe $200,000 on your mortgage. If your lender allows an 85% LTV:
- Multiply your home value by the LTV limit: $350,000 × 0.85 = $297,500
- Subtract your current mortgage balance: $297,500 - $200,000 = $97,500
- Your potential home equity loan amount: up to $97,500
Keep in mind, this is a ceiling, not a guarantee. Your actual approved amount could be lower depending on your credit, income, and the lender’s assessment of your ability to repay.
What is combined loan-to-value ratio?
CLTV measures your total mortgage debt compared to your home’s value. Add your current mortgage balance to your new loan amount, then divide by your home’s appraised value.
Example: Owe $200,000 on a $300,000 home and borrow $40,000 → 80% CLTV.
Most lenders prefer 80% or less, though some allow 85%–90% for highly qualified borrowers.
Factors that affect how much you can borrow
The formula gives you a ballpark figure, but lenders look at the full picture when deciding your actual loan amount. Four factors carry the most weight.
Check your home equity loan options. Start hereYour available home equity
Equity is simply your home’s current market value minus what you owe on it. The more equity you’ve built up, the more you can potentially borrow.
However, lenders typically require you to maintain at least 15-20% equity in your home after the loan closes. This built-in buffer protects both you and the lender if home values drop.
Credit score requirements
Most lenders look for a minimum credit score of 620 for home equity loans, though some set the bar at 680 or higher. Borrowers with scores above 740 often qualify for larger loan amounts and lower interest rates.
If your score falls below 620, you may still find lenders willing to work with you, but expect lower borrowing limits and higher rates.
Debt-to-income ratio
Your debt-to-income ratio, or DTI, compares your monthly debt payments to your gross monthly income. Lenders typically prefer a DTI of 43% or less, though some allow up to 50%.
A lower DTI signals that you have room in your budget for the new loan payment. If your DTI is on the higher side, lenders may approve you for a smaller amount than your equity would otherwise allow.
Lender-specific policies and limits
Different lenders have different rules. Some banks cap home equity loans at $250,000 regardless of how much equity you have, while others may lend $500,000 or more.
Credit unions, traditional banks, and online lenders each approach home equity lending differently. Shopping around often reveals surprising differences in how much you can borrow.
What are maximum and minimum home equity loan amounts?
Maximums: Your borrowing limit depends on your home’s value, lender caps, LTV limits (often 80%–90%), and your qualifications. Some credit unions may allow up to 100% LTV for highly qualified borrowers, but that leaves little equity cushion if home values fall.
Minimums: Most lenders require at least $10,000–$25,000. If you need less, a personal loan or 0% APR credit card may be a better fit.
Home equity loan vs HELOC borrowing limits
Both products tap your home equity, but they work differently and may offer different borrowing limits.
Check your home equity loan options. Start hereHow much can you borrow with a HELOC
A home equity line of credit, or HELOC, typically allows borrowing up to 85-90% of your home’s value minus your mortgage balance. Some lenders offer higher limits for HELOCs than for home equity loans.
The main difference is structure. A HELOC works like a credit card: you get a credit line and borrow what you need, when you need it. A home equity loan gives you a lump sum upfront.
Which option lets you borrow more
| Feature | Home Equity Loan | HELOC |
| Typical LTV limit | Up to 80-85% | Up to 85-90% |
| Loan structure | Lump sum | Revolving credit line |
| Interest rate | Fixed | Usually variable |
| Best for | One-time expenses | Ongoing or uncertain costs |
A HELOC might offer a higher borrowing limit, but a home equity loan’s fixed rate gives you predictable payments. The right choice depends on what you’re using the money for, not just how much you can get.
How to borrow more from your home equity
If you want to maximize your borrowing potential, a few strategies can help.
Check your home equity loan options. Start hereShop multiple lenders
LTV limits and qualification criteria vary more than you might expect. Comparing at least three lenders can reveal options you’d otherwise miss.
Don’t assume your current mortgage lender offers the best deal. Online lenders, credit unions, and traditional banks each have different strengths.
Pay down existing debt
Reducing your mortgage balance increases your available equity. Paying off credit cards or other debts lowers your DTI, which can also boost your approved loan amount.
Even modest improvements to your debt profile can make a meaningful difference in what lenders offer you.
Improve your credit score
Higher credit scores often unlock higher LTV limits and larger loan amounts. Before applying, check your credit report for errors and consider paying down credit card balances to lower your utilization ratio.
A few months of focused effort can pay off in better loan terms.
Request a new home appraisal
If your home has appreciated significantly since you bought it, a new appraisal could increase your borrowing power. This strategy works best if you’ve made improvements or if local home values have risen substantially.
Appraisals cost money, typically $300-$500, so weigh the potential benefit against the expense.
How much should you actually borrow?
Just because you can borrow a certain amount doesn’t mean it’s the right move. Your home serves as collateral, which means falling behind on payments could lead to foreclosure.
A few things to consider:
- Borrow only what you need: Maxing out your available equity leaves you vulnerable if home values drop or your financial situation changes
- Factor in monthly payments: Make sure the new payment fits comfortably in your budget with room to spare
- Think about market risk: Home values can decline, potentially leaving you owing more than your home is worth
- Understand what's at stake: Unlike credit card debt, missing home equity loan payments puts your home at risk
A conservative approach protects your financial stability and preserves equity for future needs or emergencies.
Find out how much home equity loan you can get
Your borrowing power depends on your home’s value, existing mortgage balance, credit profile, and the lender you choose. Most homeowners can access 80-85% of their home’s value minus their mortgage balance, though some lenders offer more.
The best way to know your actual borrowing limit is to get quotes from multiple lenders. Each will evaluate your situation and provide a specific loan amount you qualify for, often without affecting your credit score during the initial inquiry.
FAQs about home equity loan amounts
Time to make a move? Let us find the right mortgage for youMost lenders cap borrowing at 80-90% of your home's value, requiring you to maintain some equity cushion. However, certain credit unions and specialized lenders may allow up to 100% CLTV for borrowers with excellent credit and strong income. Borrowing 100% of your equity carries significant risk since any decline in home value would leave you owing more than your home is worth.
You can technically have multiple home equity loans or lines of credit on the same property. However, your combined debt typically cannot exceed the lender's CLTV limits, and qualifying becomes harder with each additional lien on your home. Most homeowners find one home equity product sufficient for their needs.
Most lenders do not restrict how you use home equity loan funds. Common uses include home improvements, debt consolidation, medical expenses, and education costs. Some lenders may prohibit certain uses like gambling or speculative investments, so check your loan agreement for any specific limitations.
