Updated
Apr 05, 2023 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?
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.