How much home equity loan can you get?

Home equity loans¹ are a good option for homeowners looking for ways to tap into their equity. These loans come with fixed interest rates for predictable monthly payments. Plus, home equity loans are usually more affordable than other types of financing. 

If you’re considering a home equity loan, it’s useful to know that most lenders will allow you to borrow up to 80% of your home’s value. Understanding how to calculate your home equity loan limit can help you find the financing that’s right for you. 

How do lenders determine the maximum amount I can borrow?

A home equity loan allows you to borrow money using the equity you’ve built in your home as collateral. Home equity is the amount your home is currently worth, minus the amount of your mortgage loan. For example, if your home is worth $550,000 and you owe $300,000 on your mortgage, you have $250,000 in home equity.

Lenders look at your loan-to-value (LTV) ratio and combined loan-to-value (CLTV) ratio to determine how much you can borrow. Your LTV ratio compares the total loan amount with the appraised value of the property. Here’s the formula lenders use:

LTV Ratio = (Total Loan Amount / Appraised Property Value) x 100

If you’ve taken out a home equity line of credit (HELOC) or home equity loan in the past, your lender will consider your CLTV. This ratio compares all loans secured by the property to the appraised value of your home. 

Most lenders will let you borrow up to 80% of your home equity, though some will go as high as 90%. Other lenders may prefer to set a dollar cap or minimum loan threshold instead. 

What affects your maximum home equity loan amount? 

In addition to your home’s value and your current mortgage balance, the following factors can affect your maximum home equity loan amount:

• Your credit score and history: Most lenders will want to see a minimum credit score between 620 to 680. However, a higher credit score will lead to better interest rates and terms on your loan. 
• Your debt-to-income ratio (DTI): Your debt-to-income ratio measures the percentage of your monthly income that’s going toward debt payments. Most lenders look for a DTI ratio of 43% or less.
• Your income and employment stability: Lenders want to see that you have a stable income so you can afford the monthly loan payments. And many lenders like to see at least 2 years of consistent employment. 
• The type of property you own and its condition: You’ll qualify for higher borrowing limits on a primary residence than you will on a second home or investment property. Your home’s condition also plays a role since a poorly maintained home may appraise for less. 
• Your home’s appraisal results: A higher appraisal amount will increase your total home equity and possibly allow you to borrow more money. 
• The lender’s internal loan limit or cap: Some lenders put their own internal loan limit or cap on how much you can borrow.
• Closing costs: Home equity loans come with closing costs, which reduce the amount of cash you’ll receive. Your closing costs include lender fees, third-party fees, and prepaid expenses like homeowners insurance.  

How to calculate your home equity loan limit 

Calculating your home equity loan limit is fairly simple, and you’ll start by figuring out your total home equity. From there, you’ll use the following formula:  

Max loan = (Home value × Allowed LTV) – Outstanding mortgage balance

When you’re done, you can use the Rocket Mortgage home equity calculator to double-check your math. Let’s look at each of these steps in more detail.

1. Determine your home’s value and mortgage balance 

Online tools like the Redfin home value estimator can give you an initial idea of what your home’s market value is. However, hiring a licensed appraiser is the most accurate method and the only one your lender will accept. Your lender can provide you with a statement showing your outstanding mortgage balance. 

For instance, let’s say Sheryl is interested in taking out a home equity loan. She starts by getting an idea of her home’s current value, then logs into her mortgage servicer’s online portal to find her current mortgage balance. Sheryl’s current home value is $435,000, and she owes $285,000 on her mortgage. 

2. Multiply your available loan amount by the lender’s limit

Sheryl’s lender will allow her to access up to 80% of her home equity. So next, she multiplies her home’s value by 80%:

435,000 x 0.8 = 348,000

This gives her a maximum borrowing limit of $348,000.

3. Subtract your mortgage balance from your home’s value

Finally, Sheryl subtracts her mortgage from the maximum borrowing limit:

348,000 – 285,000 = 63,000

The most Sheryl can take out in a home equity loan is $63,000.

Example calculations

Let’s look at a few different scenarios with varying home values, mortgage balances, and LTV caps. The first outlines a moderate-equity scenario, which is most homeowners. The next scenario would be common for a new homeowner with limited equity, while the final example shows a high-equity borrower. 

How to maximize your loan amount 

If you’re not happy with your initial loan estimate, here are some steps you can take to improve your position:

• Raise your credit score: A higher credit score can improve your odds of getting approved and help you secure a lower interest rate.
• Paying down your mortgage: Reducing your mortgage balance increases your available equity.
• Lowering your DTI: Paying off high-interest debt like credit cards improves your overall affordability.
• Comparing lenders: Loan limits, rates, and underwriting standards vary by lender, so shopping around can help you find the best loan terms.

Should I get a home equity loan? 

Home equity loans can be a low-cost way to access your home equity, but they do come with risks. Because your home secures the loan, your lender can foreclose on your home if you’re unable to make the payments. And borrowing too much against your home’s value can leave you in a difficult position if your income changes.

Interest and closing costs also reduce the overall value of the loan. While home equity loans usually offer lower rates than personal loans or credit cards, those costs still add up over time.

Interest on a home equity loan may be tax deductible when the funds are used for qualified home improvements, but not for personal expenses. And if home values decline after you take out the loan, you’ll lose equity, making it harder to refinance or sell without owing money at closing

Alternatives to a home equity loan

If a home equity loan isn’t the right fit, here are some alternatives worth exploring:

• HELOC: A home equity line of credit (HELOC) works like a credit card backed by your home. It offers flexible access to the funds with a variable interest rate. Note that Rocket Mortgage does not offer HELOCs at this time.
• Cash-out refinance: A cash-out refinance² replaces your existing mortgage with a larger one and lets you take the difference in cash.
• Personal loan: Personal loans are unsecured, so they won’t put your home at risk, but will likely come with higher interest rates.
• Reverse mortgage: These loans are designed for homeowners age 62 and older to convert equity into income with no monthly payments. Rocket Mortgage does not offer reverse mortgages, but we are here to help you understand your options.
• Portfolio loan: These nontraditional loan options may be available through local banks or credit unions with flexible underwriting standards.

The bottom line: Know your numbers before you apply for a home equity loan 

The size of your home equity loan depends on your home’s value, your mortgage balance, your credit score, and your lender’s borrowing limits. Running the numbers before you apply can help you avoid surprises and choose a loan amount that aligns with your needs and your long-term financial stability.

Rocket Mortgage makes it easy to explore your home equity options and apply online. When you’re ready to take the next step, you can see what you qualify for and find the right loan for your situation.

Rocket Mortgage is a trademark of Rocket Mortgage, LLC or its affiliates.

¹Home Equity Loan product requires full documentation of income and assets, credit score and max loan-to-value (LTV), combined loan-to-value (CLTV), and home equity combined loan-to-value (HCLTV) ratios. Requirements were updated 11/19/25 and are tiered as follows: 680 minimum FICO with a max LTV/CLTV/HCLTV of 80%, 700 minimum FICO with a max LTV/CLTV/HCLTV of 85%, and 740 minimum FICO with a max LTV/CLTV/HCLTV of 90%. Your debt-to-income ratio (DTI) must be 50% or below. Valid for loan amounts between $45,000.00 and $500,000.00 (minimum loan amount for properties located in Michigan is $10,000.00). Product is a second standalone lien and may not be used for piggyback transactions. Product not available on Ameriprise products. Guidelines may vary for self-employed individuals. Some mortgages may be considered “higher priced” based on the APOR spread test. Higher‑priced loans in the State of New York are subject to additional regulatory requirements. Additional restrictions apply. This is not a commitment to lend.

² Refinancing may increase finance charges over the life of the loan.