How Much Can You Borrow With a HELOC?
Most lenders let you borrow up to 80% to 90% of your home’s value, minus your mortgage balance. The formula, worked examples, and what else affects your limit.
The short version
- Typical HELOC limit = home value × lender’s maximum CLTV (often 80%–85%, sometimes 90%) − mortgage balance.
- A $400,000 home with a $250,000 mortgage could support a HELOC of about $70,000 to $110,000.
- Credit score, debt-to-income ratio, and income also cap what you’re approved for.
- HELOCs usually have a 10-year draw period followed by a 20-year repayment period, with a variable rate.
- Interest is tax-deductible only if you use the money to buy, build, or substantially improve the home.
A home equity line of credit (HELOC) lets you borrow against the value of your home that you’ve paid off. How much you can access depends mostly on two numbers you already know — what your home is worth and what you still owe — plus a limit set by the lender.
The HELOC formula
Lenders cap your combined loan-to-value ratio (CLTV): your mortgage plus the HELOC, as a share of your home’s value. Maximum HELOC = (home value × maximum CLTV) − mortgage balance. Many lenders cap CLTV at 80% or 85%; some go to 90% for strong borrowers.
| Lender’s maximum CLTV | Total borrowing allowed | Maximum HELOC |
|---|---|---|
| 80% | $320,000 | $70,000 |
| 85% | $340,000 | $90,000 |
| 90% | $360,000 | $110,000 |
Your home value comes from an appraisal or automated valuation when you apply, which may differ from online estimates. Run your own numbers with the HELOC calculator.
What else limits your HELOC
- Credit score: many lenders want scores in the high 600s or better, and the best rates and highest CLTVs go to higher scores.
- Debt-to-income ratio: lenders count a payment on the full line, and many look for total DTI under about 43%.
- Income and employment: you’ll need to document that you can repay.
- Property type and occupancy: limits are often lower for second homes, investment properties, and condos.
How a HELOC works after you’re approved
A HELOC works like a credit card secured by your home. During the draw period — usually 10 years — you can borrow, repay, and borrow again up to your limit, and many lenders require only interest payments. After that comes the repayment period, often 20 years, when you can no longer draw and pay back principal plus interest, so the payment can jump. Most HELOCs have variable rates tied to the prime rate.
Your home is the collateral
If you can’t repay a HELOC, the lender can foreclose. Borrow for things that add lasting value — a renovation, consolidating much higher-rate debt — and plan for the payment rising when rates do or when the draw period ends.
Is HELOC interest tax-deductible?
Only when you use the money to buy, build, or substantially improve the home that secures it, and only if you itemize. Interest on HELOC money used for other purposes, such as paying off credit cards or buying a car, isn’t deductible under current law.
HELOC or something else?
A home equity loan gives you a lump sum at a fixed rate, a cash-out refinance replaces your whole mortgage, and a personal loan doesn’t put your house at risk. Compare all three in HELOC vs. home equity loan vs. personal loan.
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Frequently Asked Questions
How much can I borrow with a HELOC?
Typically your home’s value times the lender’s maximum combined loan-to-value ratio — often 80% to 85% — minus your mortgage balance. With a $400,000 home and a $250,000 mortgage, that’s about $70,000 at 80% or $90,000 at 85%.
What is CLTV?
Combined loan-to-value: all loans secured by the home, divided by its value. A $250,000 mortgage plus a $90,000 HELOC on a $400,000 home is an 85% CLTV.
Do you need good credit for a HELOC?
Generally yes. Many lenders look for credit scores in the high 600s or above and a debt-to-income ratio under about 43%, and offer the best rates and limits to higher scores.
Can I get a HELOC with little equity?
It’s difficult. If your mortgage is already above about 80% to 90% of your home’s value, most lenders won’t have room to offer a line.
Sources
This article is for general education and is not financial, tax, or legal advice. Figures reflect published IRS and SSA amounts as of the date above; verify current limits with the linked sources or a qualified professional before acting.
About the author
David Miles is the founder of FigureMoney and builds independent, source-backed personal-finance tools across the Modern Site Builders network. Every calculator and guide cites the IRS, SSA, or primary research behind its numbers.
Calculators in this guide
HELOC & Home Equity Loan Calculator
See how much you can borrow from your home value, mortgage balance, and CLTV limit, plus the monthly payment.
Debt-to-Income Ratio Calculator
Calculate your debt-to-income (DTI) ratio from your monthly debt payments and gross income — the number lenders use to approve a mortgage or loan.
Refinance Calculator
See if refinancing your mortgage is worth it. Compare your current payment to a new loan, find the break-even month on closing costs, and total interest saved.
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