How much can you borrow with a HELOC?

Your HELOC credit limit is determined by a formula, not negotiation. According to the CFPB, lenders typically set your maximum at 85% of your home's appraised value minus your outstanding first mortgage balance. Your credit score, income, and DTI can then push that number down from the mathematical ceiling.

The CLTV formula explained

Combined loan-to-value (CLTV) = (first mortgage balance + HELOC limit) ÷ appraised value. Lenders set a maximum CLTV — commonly 80% or 85%. Here is how the math works:

• Home appraised at $400,000 × 85% CLTV cap = $340,000 maximum total debt
• Subtract your existing mortgage balance of $250,000
• Maximum HELOC = $90,000
• If your lender caps at 80% instead: $320,000 − $250,000 = $70,000 maximum

What can lower your actual limit

Even if the equity math supports a high limit, lenders can pull it back based on risk factors. A lower credit score or higher DTI typically results in a more conservative CLTV cap or a flat dollar cap. Property type also matters — lenders often apply a lower CLTV to investment properties or second homes than to primary residences.

• Credit score below 680: many lenders reduce the maximum CLTV to 75–80%
• High DTI (above 43%): may result in a lower approved limit even if equity supports more
• Investment or vacation property: typically capped at a lower CLTV than a primary home
• Property condition: a low appraisal (relative to your estimate) directly reduces the available equity the formula can work with
• Recent late payments or derogatory marks: can trigger manual underwriting with more conservative limits

Is the limit the same as what you should draw?

Your approved credit limit and what you should actually borrow are two different questions. Drawing up to your maximum leaves you with minimal equity cushion — if home values decline, you could end up underwater. Financial regulators have consistently advised homeowners to treat HELOCs as structured borrowing tools, not as a way to cash out all available equity. A practical rule: keep your CLTV below 80% even after draws, giving you a buffer against value fluctuations.