How Much Home Equity Can I Borrow? (80/85/90% CLTV)
Borrowable amount = (home value × CLTV cap) − mortgage balance. That’s it — but each input has a catch: value comes from the lender’s appraisal (often 3–8% below Zillow-style estimates), the cap is 80% for best rates, and the mortgage balance is the payoff figure, not your last statement.
Worked examples ($450,000 home, $280,000 owed)
- 80% cap: $360,000 − $280,000 = $80,000 borrowable. Equity is $170,000 but the cap leaves a $90,000 cushion the lender won’t touch.
- 85% cap: $382,500 − $280,000 = $102,500 — if you can find a lender offering it at an acceptable rate.
- 90% cap: $405,000 − $280,000 = $125,000 — rare, pricey, and usually requires excellent credit plus low DTI.
Why “I have $170k equity” doesn’t mean $170k available
Lenders never let you borrow to 100% CLTV on a second lien — the cushion protects them if prices dip. Fees, minimum draws ($10,000 is common), and DTI caps (usually 43–50% including the new payment) shrink the headline figure further. Type your numbers into the homepage calculator and press “Use max at 80% CLTV” for the honest figure.
Questions, answered
Do lenders use my Zestimate?
No — they order an appraisal or automated valuation. Expect it to land below listing-site estimates, especially after fast price run-ups.
Can I borrow above 90% CLTV?
A few credit unions stretch to 95–100% for stellar borrowers, but rates jump sharply and options are thin. Above 80% always price-shop at least three lenders.