Lenders don’t let you borrow against all of your equity. They stop at a combined loan to value limit, and every lender sets its own. In the example below, a $450,000 home with $270,000 owed has $180,000 in equity. At an 80% limit, the most you could borrow is $90,000, which is half of it.
The numbers in the boxes are examples to show how it works. They aren’t a quote, a current market rate or any lender’s terms, so swap in your own.
What your result means
Your big number is a ceiling, not an offer. It’s how much more debt fits under the limit you picked once your current loans are counted. Get zero? Then your loans already sit at or past that limit.
Notice how much equity stays untouched. That cushion is the point of a limit.
It protects the lender, and it protects you if prices dip.
Bottom line: use the number as a ceiling to compare real quotes against.
What it leaves out
A lender uses an appraisal, not the value you type, and also looks at your credit, income and other debts. Your approved amount can come in lower than this ceiling. Closing costs aren’t counted either, and they come out of your pocket or your loan.
What to check with a lender
Ask for their maximum combined loan to value, the minimum credit score and how they set your home’s value. Does the limit change for a HELOC versus a home equity loan? Rerun this with their number instead of the 80% placeholder.
How this is calculated
Equity is your home value minus what you owe. Combined loan to value is what you owe divided by your home value. The most you could borrow is your home value times the limit you pick, minus what you owe, and never less than zero.
Amounts are rounded to the nearest dollar and percentages to one decimal. The limit can be set from 60% to 90%, home value and balance up to $50,000,000. Anything outside that is moved to the nearest allowed number and you’ll see a note saying so. The 80% in the box is a common starting point used here as an example, not a rule and not any lender’s limit.
How much equity can I borrow questions
It is all the debt secured by your home, your mortgage plus the new loan, divided by what the home is worth. A lender caps it so you keep some equity as a cushion.
Usually not. The limit leaves part of your equity untouched, which is why the ceiling above is smaller than your equity. Where the limit sits depends on the lender and the product.
Not really. An agreement has its own limits, set by the company as a share of your home’s value. Use the home equity agreement calculator to see what one would cost when you settle.
Want to see ways to get at your equity without a refinance? This guide compares them. Short on credit? Here’s a home equity loan with bad credit. Or compare what a home equity loan would cost each month and see our best home equity agreement companies, then browse the rest of our home equity guides.