How much equity do you need for a HELOC?

Enough that your mortgage plus the new line stays under the lender's combined loan-to-value cap. Here is the math, and what you can do if you're close.

Reviewed by Shawn Way, NMLS #1007298★ 4.9 from 111 reviewsUpdated October 28, 2026

The formula lenders use

Lenders don't look at equity on its own. They look at your combined loan-to-value ratio, or CLTV: every loan secured by the home, including the full HELOC limit, divided by the home's value. The equity you need is whatever is left after that cap.

• Maximum total debt = home value × the lender's CLTV cap
• Maximum HELOC line = maximum total debt − your current mortgage balance(s)
• Equity you keep = 100% − the CLTV cap

Most lenders cap CLTV at 80%–85% for a primary home, so you keep 15%–20% of the value untouched. Some lenders go to 90% or higher for strong credit, at higher rates. Second homes and rentals usually cap lower. Equity is only one test: you also need to meet the lender's credit and income rules, such as a score of at least 620 and a debt-to-income ratio near 43% or lower. See the full HELOC requirements.

Worked examples at 15%, 20% and 30% equity

Example only. Each case uses a $500,000 home and compares an 80% cap with an 85% cap. At 80%, total debt can reach $400,000. At 85%, it can reach $425,000.

At 15% equity

You're already at 85% CLTV before any line. With a typical cap there is nothing left to borrow. Only a lender that goes to 90% would offer a line, and on this home that's $450,000 − $425,000 = $25,000, usually at a higher margin and with stricter credit rules.

At 20% equity

You're at 80% CLTV. A lender capped at 80% has no room. One capped at 85% could offer about $25,000. Many lenders also have a minimum line size, so a small line may not be offered at all. See HELOC minimums and maximums.

At 30% equity or more

This is where a HELOC becomes clearly useful. At 30% equity you can open $50,000 to $75,000 on this home, depending on the cap. At 40% equity it's $100,000 to $125,000. More equity also tends to earn a better margin, because lower CLTV means less risk for the lender.

If the home is paid off

With no mortgage you have 100% equity, and the line is simply value × the cap. On a $500,000 home that's $400,000 to $425,000, though income, the lender's maximum line, and its rules on large lines usually set a lower number. See a HELOC on a paid-off house.

How to raise your usable equity

If the numbers come up short, these are the levers that actually move CLTV:

• Check the value first. Your own estimate may be off. Recent sales of similar homes nearby matter more than online estimates, and the lender's appraisal or valuation sets the number. See does a HELOC require an appraisal.
• Challenge a low appraisal with evidence. If you have better comparable sales or the appraiser missed upgrades, you can ask the lender for a reconsideration of value.
• Pay down the mortgage. Every dollar of principal you pay adds a dollar of room under the cap. A lump sum before you apply can open a line that wasn't possible.
• Pay off another lien. An old second mortgage, solar lien or existing HELOC counts against the cap. Clearing or shrinking it frees room.
• Ask for a smaller line. A line at 75% CLTV can price better than one at 85%, and it may be all you need.
• Wait. Principal payments and price changes both move your equity over time. If you're just short, a few months can make a difference.

Improvements can raise value, but spending money to qualify for a loan rarely makes sense on its own.

Run your own numbers

Use the how much can I borrow calculator with your home value and balance to see your line at different caps. To see your own numbers, get your HELOC rate from Shawn. A HELOC is secured by your home, rates can change, and this is not an offer of credit.

Related question: High-LTV HELOCs

Related question: How to calculate home equity

Questions people ask

Can I get a HELOC with 10% equity?

Rarely. With 10% equity you're at 90% CLTV before the line, so only lenders that go above 90% could offer a HELOC, and few do. Paying the mortgage down or waiting usually works better.

Can I get a HELOC with 20% equity?

Sometimes, but a HELOC with 20% equity is small. A lender with an 85% cap can lend about 5% of the home's value, about $25,000 on a $500,000 home, and an 80% cap leaves nothing.

Does the full HELOC limit count against my equity?

Yes. Lenders count the whole credit limit in CLTV, not just what you've drawn, because you can draw the full line at any time.

How much equity do I need for a HELOC on a rental property?

You usually need more equity for a HELOC on a rental property than on a primary home. Investment property HELOCs often cap at 70%–80% CLTV, so you'd need more than 20%–30% equity. See HELOCs on investment property.

Does more equity get me a lower HELOC rate?

Often, yes. Lenders price the margin partly on CLTV, so a line that keeps you under about 70% CLTV tends to price better than one near the cap.

More in HELOC guides

• What is a HELOC?
• HELOC requirements
• When the draw period ends
• How HELOC interest is calculated
• HELOC pros and cons
• Is a HELOC a bad idea?
• How to get a HELOC
• Does a HELOC show on your credit report?

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