How to Calculate Home Equity Available to Borrow
The combined loan-to-value formula lenders use to cap home equity borrowing, with a worked example.
Lenders don't let you borrow against 100% of your home's value — they cap total borrowing (your existing mortgage plus any new home equity loan or HELOC) at a combined loan-to-value (CLTV) limit, commonly 80-85%.
The formula
Available to borrow = (home value × max CLTV%) − existing mortgage balance
Worked example
| Input | Value |
|---|---|
| Home value | $450,000 |
| Existing mortgage balance | $250,000 |
| Max CLTV | 85% |
| Max total borrowable | $450,000 × 0.85 = $382,500 |
| Available to borrow | $382,500 − $250,000 = $132,500 |
Notice this is less than raw equity ($450,000 − $250,000 = $200,000) — the gap between raw equity and what a lender will actually let you borrow is the cushion built into the CLTV limit. A lower max CLTV (some lenders use 80% instead of 85%) shrinks the available amount further.
Plug in your own home value, mortgage balance, and CLTV limit in the Home Equity Loan / HELOC Calculator to see your actual borrowing ceiling before comparing loan types.