How much equity can I borrow against?

Usually up to 80–85% of the home’s value minus what you still owe. On a $450,000 house with $280,000 outstanding, an 85% cap allows $382,500 of total debt, so about $102,500 is available — even though you hold $170,000 of equity. Lenders keep a cushion because the collateral is the house.

What is the difference between a home equity loan and a HELOC?

A home equity loan is a lump sum at a fixed rate with a fixed payment. A HELOC is a revolving line at a variable rate, with a draw period — typically ten years, usually interest-only — followed by a repayment period where principal is added and the payment can double or more. The rate on a HELOC moves with the prime rate.

Is the interest deductible?

Only when the money is used to buy, build or substantially improve the home securing the loan, and only within the overall mortgage-interest limits. Borrowing against the house to consolidate credit cards or fund a holiday is not deductible under current law, whatever the marketing says.

The house is the collateral. Unsecured debt turned into secured debt is cheaper precisely because the lender can foreclose, so consolidating cards into a home equity loan lowers the rate and raises the stakes. A variable-rate HELOC adds a second risk: the payment rises with the prime rate, and again when the draw period ends.

Home Equity Calculator

With home value 450000 usd, mortgage balance 280000 usd, lender’s combined loan-to-value limit 85 percent, rate on the new borrowing 8.5 percent and 1 more field, home equity comes to $102,500 — available to borrow. It is reached in 9 steps, the last of which is max(0, 382500 - 280000), and each one is printed on the page with its numbers filled in. The formula is the one published by 12 CFR part 1026 (Regulation Z), not an approximation fitted to it.

How much equity you have, how much of it a lender will actually let you borrow, and what the payment on it would be.

Formula and sources checked 27 August 2026 · How we check

Home value 450000, Mortgage balance 280000, Lender’s combined loan-to-value limit 85, Rate on the new borrowing 8.5

$102,500

Available to borrow for the example below. Editing a field recomputes the calculator below; this figure holds the answer the page was loaded with.

It is written into the HTML rather than drawn by a script, so a search engine reading this page without running JavaScript still finds an answer.

Home valueusdMortgage balanceusdLender’s combined loan-to-value limitpercent80–85% is typical; some lenders go to 90% at a higher rate.Rate on the new borrowingpercentTerm, years

Available to borrow

$102,500

Equity you hold: max(0, 450000 - 280000)$170,000
Equity as a share of the home: 170000 / 450000 * 10037.778 %
Current loan-to-value: 280000 / 450000 * 10062.222 %
Most the lender will allow against the house: 450000 * 85 / 100$382,500
Available to borrow: max(0, 382500 - 280000)$102,500
Equity you cannot borrow against: max(0, 170000 - 102500)$67,500
Monthly payment if you take it all: 102500 * 0.0070833 / (1 - pow(1 + 0.0070833, -180))$1,009
Interest over the term: 1009.358 * 180 - 102500$79,184
Interest-only payment, as a HELOC draw period: 102500 * 0.0070833$726.04

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Worked example

A $450,000 house with $280,000 owed holds $170,000 of equity — but at an 85% combined loan-to-value cap the lender will only go to $382,500 of total debt, so $102,500 is available and $67,500 of the equity stays where it is.

How to work it out yourself

1.Use a realistic value. A lender orders its own appraisal, and an optimistic estimate here is the commonest reason an application comes back smaller than expected.
2.Note that the limit applies to total debt against the house, not to the new loan. The existing mortgage takes up most of the allowance, which is why large equity does not mean large availability.
3.Compare the amortising payment against the interest-only figure. A HELOC draw period is interest-only, and the payment jumps sharply when it ends.

The formula

Equity you holdmax(0, 450000 - 280000)
Equity as a share of the home170000 / 450000 * 100
Current loan-to-value280000 / 450000 * 100
Most the lender will allow against the house450000 * 85 / 100
Available to borrowmax(0, 382500 - 280000)
Equity you cannot borrow againstmax(0, 170000 - 102500)
Monthly payment if you take it all102500 * 0.0070833 / (1 - pow(1 + 0.0070833, -180))
Interest over the term1009.358 * 180 - 102500
Interest-only payment, as a HELOC draw period102500 * 0.0070833

Source: 12 CFR part 1026 (Regulation Z) — Truth in Lending, including home equity plans

Questions people actually ask

How much equity can I borrow against?: Usually up to 80–85% of the home’s value minus what you still owe. On a $450,000 house with $280,000 outstanding, an 85% cap allows $382,500 of total debt, so about $102,500 is available — even though you hold $170,000 of equity. Lenders keep a cushion because the collateral is the house.
What is the difference between a home equity loan and a HELOC?: A home equity loan is a lump sum at a fixed rate with a fixed payment. A HELOC is a revolving line at a variable rate, with a draw period — typically ten years, usually interest-only — followed by a repayment period where principal is added and the payment can double or more. The rate on a HELOC moves with the prime rate.
Is the interest deductible?: Only when the money is used to buy, build or substantially improve the home securing the loan, and only within the overall mortgage-interest limits. Borrowing against the house to consolidate credit cards or fund a holiday is not deductible under current law, whatever the marketing says.
What is the risk?: The house is the collateral. Unsecured debt turned into secured debt is cheaper precisely because the lender can foreclose, so consolidating cards into a home equity loan lowers the rate and raises the stakes. A variable-rate HELOC adds a second risk: the payment rises with the prime rate, and again when the draw period ends.

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