If you have built equity in your Utah home, you may be wondering: How much can I actually borrow with a HELOC?
The short answer is that it depends on your home value, current mortgage balance and the HELOC lender’s maximum combined loan-to-value ratio, also called CLTV.
Many HELOC programs allow homeowners to borrow up to a certain percentage of their home’s value after accounting for what they already owe.
Let’s break down how that works.
How Is a Utah HELOC Amount Calculated?
One of the most important numbers when qualifying for a HELOC is your combined loan-to-value ratio, or CLTV.
The basic formula is:
Home Value × Maximum CLTV – Current Mortgage Balance = Potential HELOC Amount
For example, suppose:
- Your Utah home is worth $600,000
- Your current mortgage balance is $350,000
- Your HELOC program allows up to 85% CLTV
First, calculate 85% of the home’s value:
$600,000 × 85% = $510,000
Then subtract your current mortgage:
$510,000 – $350,000 = $160,000
In this example, you could potentially qualify for a HELOC of up to $160,000, subject to credit, income and other lender requirements.
What Does CLTV Mean on a HELOC?
CLTV stands for combined loan-to-value.
It looks at all loans secured by your home compared with the home’s value.
If your first mortgage is $350,000 and you add a $100,000 HELOC, you would have $450,000 in total loans secured by the property.
On a $600,000 home:
$450,000 ÷ $600,000 = 75% CLTV
Different HELOC lenders have different CLTV limits.
For example, Mountain America Credit Union currently explains that many lenders limit HELOC borrowing to around 85% CLTV. Some programs may allow more or less depending on the borrower, property and loan structure.
Utah HELOC Examples
Here are a few simple examples using an 85% maximum CLTV:
| Home Value | Mortgage Owed | 85% of Home Value | Potential HELOC |
|---|---|---|---|
| $400,000 | $250,000 | $340,000 | $90,000 |
| $500,000 | $300,000 | $425,000 | $125,000 |
| $600,000 | $350,000 | $510,000 | $160,000 |
| $750,000 | $450,000 | $637,500 | $187,500 |
| $1,000,000 | $600,000 | $850,000 | $250,000 |
These are examples only. Your actual available HELOC amount will depend on the specific lender and your qualification.
Can You Borrow 100% of Your Home Equity?
Sometimes, but not with every HELOC program.
Some lenders offer programs allowing homeowners to borrow at higher CLTV levels. America First Credit Union, for example, currently lists home equity products reaching as high as 100% LTV, although pricing and qualification can be different from lower-LTV programs.
That means it is important to compare more than one HELOC option.
A homeowner who is told they cannot access enough equity through one bank may have additional options available elsewhere.
What Else Determines How Much HELOC You Can Get?
Having enough equity is only one part of qualifying.
HELOC lenders may also look at:
- Credit score
- Income
- Debt-to-income ratio
- Employment history
- Property type
- Occupancy
- Current mortgage balance
- Requested HELOC amount
- Home value
Some programs also have minimum and maximum line amounts.
So even if your home equity supports a $150,000 HELOC mathematically, you still need to qualify for the loan.
How Is My Home Value Determined for a HELOC?
The lender needs to establish what your home is currently worth.
Depending on the HELOC amount and lender, that may involve:
- An automated valuation
- A property inspection
- A desktop appraisal
- A full appraisal
Utah homeowners who purchased several years ago may be surprised by how much equity they have accumulated, particularly if their property’s value has increased while they have continued paying down their mortgage.
Do I Have to Borrow the Entire HELOC Amount?
Usually, no.
One of the major differences between a HELOC and a traditional home equity loan is that a HELOC is generally a revolving line of credit.
For example, you might qualify for a $150,000 HELOC but initially draw only $40,000.
You generally pay interest based on the amount you have actually borrowed rather than simply the entire approved credit line.
That flexibility is one reason homeowners use HELOCs for projects where expenses happen over time.
How Much Equity Should I Take Out?
Just because you can access a certain amount of equity does not necessarily mean you should borrow all of it.
Before deciding how large your HELOC should be, consider:
- What you actually need the money for
- The expected monthly payment
- Whether the interest rate is variable
- How quickly you expect to repay it
- Whether another loan structure would make more sense
A HELOC can be a valuable financial tool, but your home is securing the debt.
Find Out How Much You Can Borrow With a Utah HELOC
If you are wondering how much you can borrow with a Utah HELOC, the first step is fairly simple.
We can look at your estimated home value, current mortgage balance and the HELOC programs available to determine approximately how much equity you may be able to access.
At Houzd Mortgage, we help Utah homeowners compare HELOC options from multiple lending sources rather than assuming the program at their existing bank is their only choice.
Whether you need $25,000 for a remodel or want to access a larger amount of your home’s equity, our Houzd Mortgage team can help you understand the options available.
Learn more about our Utah HELOC options or contact Houzd Mortgage to see how much equity you may be able to access.