Estimate how much cash you can access from your home's value.
Excellent (740+)
Good (670-739)
Fair (580-669)
Your Estimated Loan Results
Total Available Equity:
Max Combined Loan-to-Value (CLTV):
Maximum Home Equity Loan Amount:
*Estimates based on standard industry LTV limits. Actual approval depends on income, debt-to-income ratio, and appraisal.
How to Calculate Your Home Equity Loan Limit
A home equity loan, often called a "second mortgage," allows you to borrow a lump sum of money using your home as collateral. Lenders typically allow you to borrow up to a certain percentage of your home's appraised value, minus what you still owe on your primary mortgage.
The 80% Rule Explained
Most traditional lenders utilize an 80% to 85% Combined Loan-to-Value (CLTV) limit. This means your total debt (existing mortgage + new home equity loan) cannot exceed 80% of your home's current market value.
Real-World Example:
Home Value: $500,000
Current Mortgage: $300,000
LTV Limit (80%): $400,000
Maximum Loan: $400,000 – $300,000 = $100,000
Home Equity Loan vs. HELOC
While both use your home as collateral, they function differently:
Home Equity Loan: Fixed interest rate, fixed monthly payments, and a lump sum payout. Best for specific projects like roof replacement or debt consolidation.
HELOC (Line of Credit): Variable interest rate, flexible borrowing (like a credit card), and interest-only payment options during the draw period.
Factors That Affect Your Borrowing Power
Debt-to-Income (DTI) Ratio: Most lenders prefer a DTI below 43%.