What LTV Is Needed for a Home Equity Loan or HELOC?

Your loan-to-value (LTV) ratio is one crucial factor lenders consider when you apply for a home equity loan or home equity line of credit (HELOC). They use it to determine whether you qualify. 

The LTV you need for a home equity loan or HELOC varies by lender. Here’s why LTV is essential and a look at 19 lenders’ LTV requirements.

In this guide:

• Why is LTV important?
• What LTV is required for a home equity loan or HELOC?
• How to calculate LTV
• FAQ

Why is LTV important?

LTV is important because lenders consider it when deciding whether to approve you for a home equity loan or HELOC. They also use it to calculate how much you can borrow.

Before you apply for a HELOC or home equity loan, you should know your LTV to determine whether you meet a lender’s requirements.

A lender may approve you for a home equity loan or HELOC if your LTV is lower than its maximum LTV requirement and you meet other eligibility requirements. 

In our research, lenders offering HELOCs and home equity loans generally have the same LTV requirements for both options.

What LTV is required for a home equity loan or HELOC?

Most lenders require an LTV of 85% or lower for a home equity loan or HELOC. You’ll likely need at least 15% equity in your home to qualify, though home equity loan and HELOC requirements vary by lender.

Your maximum LTV depends on many factors, including your credit score, where you live, and whether the home is your primary or secondary residence. 

Below is a table that breaks down the maximum LTV requirements for the 19 lenders we researched:

Lender	Maximum LTV	Offers a HELOC or home equity loan?
Alliant Credit Union	80%	HELOC
Bank of America	85%	HELOC
Bethpage Federal Credit Union	65% – 75%	HELOC
Chase Bank	80%	Home equity loan
Citizens	80% – 85%	HELOC
Connexus Credit Union	90%	Both
Credit Union of Texas	80%	Both
Discover	89.99%	Home equity loan
Figure	85% for primary residences; 70% for secondary properties	HELOC
Flagstar Bank	80% for home equity loans; 89.99% for HELOCs	Both
Frost Bank	80%	Both
Guaranteed Rate	85%	HELOC
PenFed Credit Union	85%	HELOC
PNC Bank	85% – 89.9%	HELOC
Regions	75% – 89%	Both
Rocket Mortgage	75% – 90%	Home equity loan
SoFi	95%	HELOC
Spring EQ	95%	Both
Third Federal	80%	Both

How to calculate LTV

Your loan-to-value ratio (LTV) divides your outstanding mortgage balance by your home’s appraised value. 

Calculate your LTV using this formula: 

Outstanding mortgage balance / Home’s appraised value x 100

For example, if your outstanding mortgage balance is $150,000, and your home’s appraised value is $200,000, your LTV is 75%.

Consider using our home equity loan calculator if you need help crunching the numbers.

Afterward, you can compare your results with your lender’s LTV requirements to determine whether you might be approved or denied based on your LTV.

Important: You can calculate your LTV without an appraisal using a home value estimate tool, but the results may not be accurate. Many lenders require a professional appraisal before approving you for a home equity loan.

FAQ

What is the LTV requirement for a home equity loan?

Based on the lenders we researched that offer home equity loans, the average home equity loan LTV requirement is 84.37%. The chart below shows the maximum LTV requirement for each lender.

Lender	Maximum LTV
Chase Bank	80%
Connexus Credit Union	90%
Credit Union of Texas	80%
Discover	89.99%
Flagstar Bank	80%
Frost Bank	80%
Regions	75% – 89%
Rocket Mortgage	75% – 90%
Spring EQ	95%
Third Federal	80%

What is the LTV requirement for a HELOC?

For the lenders we researched that offer HELOCs, the average LTV requirement is 85%. The following table shows the maximum LTV requirement for each lender.

Lender	Maximum LTV
Alliant Credit Union	80%
Bank of America	85%
Bethpage Federal Credit Union	65% – 75%
Citizens	80% – 85%
Connexus Credit Union	90%
Credit Union of Texas	80%
Figure	85% for primary residences; 70% for secondary properties
Flagstar Bank	89.99%
Frost Bank	80%
Guaranteed Rate	85%
PenFed Credit Union	85%
PNC Bank	85% – 89.9%
Regions	75% – 89%
SoFi	95%
Spring EQ	95%
Third Federal	80%

What if my LTV is too high to get a home equity loan or HELOC?

If you don’t have sufficient equity in your home or are still exploring your options, consider these alternatives to home equity loans and HELOCs.

Personal loans

A personal loan is a fixed-rate installment loan from a bank, credit union, or online lender. You can use a personal loan for almost any purpose, such as debt consolidation, home improvements, or emergencies.

These loans are often unsecured, meaning you don’t risk losing your home if you don’t make payments. But a potential downside is that average personal loan rates are often higher than home equity loan rates.

Credit cards

Credit cards are similar to HELOCs because you can borrow against a line of credit as needed. Unlike HELOCs, however, you don’t need to pay closing costs or risk equity in your home.

A potential downside is that credit cards often have much higher rates than home equity loans and HELOCs. If you don’t pay your credit card balance in full on or before the due date, you could owe hundreds of dollars in interest.

Family loans

Another alternative is to ask a family member for a loan. An advantage is that a loved one may loan you money at a lower rate than a traditional lender. If they agree, put the loan terms in writing. Then repay them as promised to avoid harming your relationship.