How much could you borrow?
80% CLTV limit$0
85% CLTV limit$0
HELOC and home equity loan limits vary by lender. Approval also depends on income, credit score, and DTI.
How home equity works
Home equity is the portion of your home you truly own — your home's current market value minus what you still owe on the mortgage. It grows two ways: as you pay down your mortgage principal each month, and as your home appreciates in value over time.
Using home equity to borrow
Once you have enough equity, you can access it through a HELOC (home equity line of credit) or home equity loan. Most lenders require at least 15–20% equity remaining after the loan, meaning they'll lend up to 80–85% of your home's combined value (CLTV). The calculator above estimates your borrowing limit at both thresholds.
LTV ratio explained
LTV (loan-to-value) is your mortgage balance divided by your home's value. LTV below 80% means you have at least 20% equity — the key threshold for avoiding PMI on a conventional loan, qualifying for better refinance rates, and accessing HELOCs. Use our refinance calculator to see if lower rates are available to you.
Frequently asked questions
How do I calculate home equity?
Home equity = current home value − outstanding mortgage balance. If your home is worth $400,000 and you owe $280,000, your equity is $120,000 (30%).
How much can I borrow with home equity?
Most lenders allow up to 80–85% combined LTV. Subtract your mortgage from 80% of your home value: $400K × 80% = $320K − $280K mortgage = $40K maximum HELOC/home equity loan.
What is LTV ratio?
LTV (loan-to-value) is your mortgage balance ÷ home value. 80% LTV means 20% equity. LTV at or below 80% is typically needed to avoid PMI and qualify for HELOCs.
How long does it take to build equity?
With 20% down on a 30-year mortgage, you build equity slowly at first (most early payments go to interest). Significant equity builds in later years and through home appreciation. Making extra payments speeds this up — see our extra payment calculator.