How Much Heloc Can I Get?: Calculate Your Maximum Credit Line

If you’re considering a home equity line of credit (HELOC), one of your first questions is probably: “How much can I actually borrow?” The answer depends on several factors, but you can estimate your potential credit line before you apply.

The Basic Formula: Combined Loan-to-Value Ratio

Most lenders use a Combined Loan-to-Value (CLTV) ratio to determine how much you can borrow:

Maximum HELOC Amount = (Home Value × Maximum CLTV) - Current Mortgage Balance

Most lenders allow a CLTV of 80-85%, though some may go up to 90% for well-qualified borrowers.

Example Calculation

Let’s say you have:

• Home value: $400,000
• Current mortgage balance: $250,000
• Lender’s maximum CLTV: 85%

Your potential HELOC amount:

• Maximum total debt allowed: $400,000 × 85% = $340,000
• Minus your mortgage balance: $340,000 - $250,000 = $90,000 available

What Determines Your HELOC Amount

1. Your Home’s Current Value

Lenders require a professional appraisal to determine your home’s market value. If your home has appreciated significantly since you bought it, you may have more equity available than you think.

2. Your Credit Score

Your credit score primarily affects the interest rate you’ll receive rather than how much you can borrow:

• 740+: Best interest rates
• 680-739: Competitive rates
• 620-679: Higher interest rates, but still eligible

Some lenders may reduce their maximum CLTV for lower credit scores (e.g., 85% CLTV for 720+ vs. 80% CLTV for 620-719), though this varies by lender. A higher credit score also means lower monthly payments, which helps keep your debt-to-income ratio favorable.

3. Your Debt-to-Income Ratio

Your DTI ratio measures your monthly debt payments against your gross monthly income. Most lenders require DTI below 43%.

Important for debt consolidation: If you’re using your HELOC to pay off existing debt, lenders with debt consolidation features will calculate your DTI based on your financial picture after paying off that debt. This can significantly increase the amount you qualify for.

For example, if you’re paying $800/month on credit cards that you plan to consolidate, that $800 can be removed from your DTI calculation, potentially qualifying you for a larger credit line.

4. Property Type

Some lenders cap CLTV at different levels depending on whether the property is a primary, secondary or investment property.

• Primary residence: Up to 85% CLTV
• Second home: Often 75-80% CLTV
• Investment property: Usually 70-75% CLTV (some lenders don’t offer HELOCs on investment properties)

How Much Equity Do You Need?

Most lenders require minimum 15-20% equity in your home to qualify. This means your mortgage can’t exceed 80-85% of your home’s value before adding a HELOC.

Calculate Your Available Equity

Step 1: Determine your home’s current value (check recent comparable sales or use online estimators)

Step 2: Find your current mortgage balance (check your latest statement)

Step 3: Apply the formula

• Multiply your home value by 0.85
• Subtract your current mortgage balance
• The result is your estimated maximum HELOC amount

Step 4: Verify your DTI stays below 43% (if consolidating debt, subtract payments you’ll eliminate)

Real World Examples

Example 1: Significant Home Appreciation

• Current home value: $550,000
• Mortgage balance: $280,000
• Credit score: 760
• Maximum HELOC (85% CLTV): $187,500

Example 2: Recent Home Purchase

• Current home value: $620,000
• Mortgage balance: $480,000
• Credit score: 720
• Maximum HELOC (85% CLTV): $47,000

Example 3: Debt Consolidation

• Home value: $450,000
• Mortgage balance: $300,000
• Has $30,000 in credit card debt ($900/month payments)
• With debt consolidation underwriting: Larger amount possible due to improved DTI after payoff

How Trovy Maximizes Your Credit Line

• Competitive CLTV Ratios: We offer CLTV ratios up to 85% for qualified borrowers for all property types.
• Debt Consolidation Underwriting: If you’re consolidating high-interest debt, we calculate your DTI based on your post-consolidation financial picture, helping you qualify for a larger credit line.
• No Mandatory Draw: Your approved credit line is available when you need it—you’re never required to borrow upfront.

Tips to Maximize Your HELOC Amount

1. Pay down existing debt to lower your DTI ratio
2. Document all income sources including bonuses or freelance work
3. Shop around - lenders have different maximum CLTV ratios
4. Consider debt consolidation if paying off high-interest debt

The Bottom Line

Most homeowners can access between 80-85% of their home’s value, minus what they still owe on their mortgage.

To estimate your potential HELOC amount:

• Use the formula: (Home Value × 0.85) - Mortgage Balance
• Make sure you have at least 15-20% equity
• Verify your DTI is below 43%
• Consider how debt consolidation underwriting might increase your available credit

Ready to find out exactly how much you can borrow? Trovy makes it easy to see your potential credit line and access your home equity with low rates and flexible terms.