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

Your loan-to-value (LTV) ratio is your outstanding mortgage balance divided by your home’s market value, expressed as a percentage. Lenders consider this ratio when determining if you qualify for a home equity loan or home equity line of credit (HELOC). 

LTV limits vary by lender, though many require at least 20% equity for a HELOC or home equity loan. Here’s why your LTV is important, a ratio that matters even more, and some insight into lender requirements.

How to calculate LTV

You can calculate your LTV using this formula:

Outstanding mortgage balance / Home’s appraised value x 100

For example, if your outstanding mortgage balance is $120,000, and your home’s appraised value is $200,000, your LTV is 60%.

Tip

Our home equity loan calculator can help you crunch the numbers.

But LTV isn’t the only ratio your lender considers when evaluating your home equity loan or HELOC application. They’ll also evaluate your combined loan-to-value (CLTV) ratio, which helps determine what you can afford to borrow. LTV only focuses on your primary mortgage balance vs. your home’s market value, while CLTV also factors in your desired loan or credit line.

You can calculate your CLTV with this formula:

Primary mortgage balance + desired loan/credit line / Home’s appraised value x 100

Let’s assume your primary mortgage balance is $120,000 and your home’s appraised value is $200,000, as it was in our earlier example. You’re seeking a $40,000 home equity loan or HELOC. In this case, your CLTV would be 80%.

Tip

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

Home equity loan or HELOC LTV limits

Lenders often require an LTV of 85% or lower to borrow against your home, but some may accept a higher limit. Home equity loan and HELOC requirements vary by lender, but in general, it’s better to have more equity in your home if you’re planning to borrow against it.

Your credit score, where you live, and whether the home is your primary or secondary residence might also factor into lenders’ LTV requirements. 

Below, we’ve broken down home equity LTV requirements for several lenders. If the lender discloses a CLTV requirement, we’ve noted that as well.

Lender	Max. LTV	Our rating
Figure	85%; 95% CLTV	4.9/5
Aven	89%	4.8/5
Bethpage FCU	85%	4.7/5
Hitch	90% LTV/CLTV	4.2/5
Spring EQ	90% LTV/CLTV	4.1/5
Navy Federal Credit Union	100% (loan); 95% (HELOC); 95% CLTV	3.9/5
Guaranteed Rate	85%; 95% CLTV	3.9/5
Unison	70%; 85% CLTV	3.8/5
PenFed	80%; 85% CLTV	3.8/5
M&T Bank	85.99% LTV/CLTV	3.7/5
Lower	95%	3.7/5
Prosper	90% LTV/CLTV	3.6/5
Utah Community Credit Union	90% LTV/CLTV	3.6/5
Citizens Bank	80%	3.6/5
Regions Bank	89% (loan); 80% (HELOC)	3.5/5
Third Federal	80%	3.5/5
Connexus	90%	3.5/5
Flagstar Bank	89.99% CLTV	3.4/5
New American Funding	80%; 85% CLTV	3.4/5
Alliant Credit Union	85% CLTV	3.3/5
Randolph-Brooks FCU	80%	3.3/5
SECU	90% CLTV	3.3/5
PNC	89.9%	3.2/5
AmeriSave	80% LTV/CLTV	3.2/5
Keybank	80% LTV/CLTV	3.1/5

Home equity loans vs. HELOC LTV requirements 

As noted in our table, both LTV and CLTV limits vary by lender. However, these limits can also differ depending on whether you seek a home equity loan or a HELOC. Lenders may set different limits for each product, and HELOCs don’t necessarily have higher LTV and CLTV limits than home equity loans. 

These limits are just one thing to consider when deciding whether a HELOC or home equity loan is best for your situation. Other factors to think about include: 

	HELOC	Home equity loan
Rates	Often variable	Fixed
Terms	Up to 10 years to draw down, up to 20 years to repay	Up to 30 years
Loan type	Credit line	Lump sum loan
Best for	If you’re uncertain how much you’ll need to borrow and are comfortable with a variable rate	If you know how much you need to borrow and want predictable monthly payments

Are high-LTV HELOCs an option?

High LTV HELOCs and home equity loans, or those with a maximum limit of 90% or more, may be an option. But it’s wise to proceed with caution before borrowing. 

If the housing market shifts and your home’s value decreases, you could easily end up underwater, meaning the combined amount you’ve borrowed exceeds your home’s market value. This could make it difficult to profit or break even if you need to sell your home. 

Because a high-LTV home equity loan or HELOC presents more risk for lenders, you might also have a higher interest rate. A high interest rate means your payments will be higher as well, which could put your home at risk if your financial situation changes and your payments become unmanageable.  

Do any lenders offer a 90% LTV HELOC?

Certain lenders offer 90% to 95% LTV HELOCs, but again, these high maximums can come with risks, such as being underwater on your home or overwhelmed by high monthly payments. Here are some lenders offering high LTV HELOCs and home equity loans:

Lender	Product	LTV/CLTV limit
Navy Federal Credit Union	Home equity loan	100%
Navy Federal Credit Union	HELOC	95%
Lower	HELOC	95%
Prosper	Home equity loan; HELOC	90%
Spring EQ	Home equity loan; HELOC	90%
Utah Community Credit Union	HELOC	90%
Connexus	Home equity loan; HELOC	90%

Can you get a 100% LTV HELOC?

You could qualify for a 100% LTV HELOC from Navy Federal Credit Union, though an LTV limit this high is fairly rare. Still, a few other credit unions offer this option:

• Garden Savings Federal Credit Union
• Farmers Insurance Federal Credit Union
• Triangle Credit Union

Expert take: Should you take out a high-LTV HELOC or home equity loan?

Crystal Rau

CFP®

Because this is your home—your primary place for shelter—it makes me nervous when people over-leverage themselves to the point where they cannot cover the costs. You may be able to afford the payment on a HELOC today, however, with a variable interest rate, this payment can adjust to a point where it is no longer affordable. When taking out any debt, I always stand by 30%, meaning your total debt payments should not exceed 30% of your gross income.

How to boost your home equity

If you want to boost your home equity to eventually qualify for a larger HELOC or home equity loan, these strategies could help you attain your goal. 

• Make bi-weekly mortgage payments
• Put extra toward your mortgage principal each month
• Apply any windfalls to your mortgage principal
• Wait for the housing market to shift before applying
• Repair or improve your home

How to apply for a HELOC or home equity loan 

If you’ve decided to move forward with a HELOC or home equity loan, here’s some insight into the general process:

1. Compare lenders and HELOC options
2. Gather important personal and financial documentation, including W-2s, tax returns, bank statements, pay stubs, and more. 
3. Apply for a HELOC online, over the phone, or in person
4. Provide more documents, if your lender requests them, and await approval
5. Close on your loan, if approved

Learn more about how to apply for a HELOC. 

What else influences my HELOC eligibility?

Your lender will consider several factors beyond LTV and CLTV ratios to determine if you qualify for a HELOC. Here’s what they’ll likely review once you apply. 

• Your credit score and reports
• Your debt-to-income ratio 
• Your income and whether you’re employed
• The amount of equity you have in your home

Typically, lenders also order an appraisal to help determine the market value of your home. The appraisal process can vary by lender, with some requiring an in-person appraisal and others doing appraisals online. Your home’s market value will help determine your total equity. 

Alternatives to home equity loans and HELOCs

If you don’t have sufficient equity in your home or are still exploring your options, consider 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, including 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. However, 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.

However, credit cards typically have 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. 

Some credit cards offer a 0% introductory APR for a set time period, though. This promotional APR often applies for 12 or 18 months, allowing you to spread your payments over time. A card like this could be worth considering if you need to finance a smaller expense; just ensure you can repay your balance before the promotional period ends.

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, write the loan terms and repay as promised to avoid harming your relationship.