How Much Can You Borrow Against a $200,000 Home?
With $120,000 still owed on a $200,000 home you hold $80,000 of equity — but the 80% lender limit caps borrowing at $40,000.
A $200,000 home with $120,000 left on the mortgage gives you $80,000 of equity on paper. You cannot borrow all of it. Lenders cap total debt against the property at a percentage of its value — commonly 80% — which on this house means $160,000 of combined borrowing, and since $120,000 of that is already used by the mortgage, $40,000 is what is actually available.
Borrowing the full $40,000 over 15 years at 7.5% costs $371 a month and $26,745 in interest over the life of the loan. That is on top of the mortgage you already pay. The calculator below is set to this scenario — change the balance to your real one, and try a HELOC instead of a fixed loan to compare the interest-only draw period.
Home Equity Calculator
Calculate your borrowing limits and project monthly payments for home equity loans
Results
Monthly Payment
$463.51
Loan Term: 15 yrs
62.2%
73.3%
Home Equity Breakdown
Borrowing against a $200,000 home — by lender limit
With $120,000 still owed. The LTV cap is the lender's policy, not a law, so it is worth shopping.
| LTV limit | Max total debt | Available to you | Monthly payment |
|---|---|---|---|
| 80% | $160,000 | $40,000 | $371 |
| 85% | $170,000 | $50,000 | $464 |
| 90% | $180,000 | $60,000 | $556 |
Frequently Asked Questions
- $40,000 at a standard 80% limit, with $120,000 still owed. Find a lender who goes to 90% and it rises to $60,000. Your equity is $80,000, but the portion you can borrow against is always smaller — lenders keep a cushion so the property still covers the debt if prices fall.
- A home equity loan hands you $40,000 at once at a fixed rate and you repay it on a set schedule — $371 a month here. A HELOC is a credit line you draw from as needed, usually variable-rate, with an interest-only period first and much larger payments after it ends. Fixed loans suit a known one-off cost; a HELOC suits staged spending you cannot size up front.
- Anything, legally — but the collateral is your house, which should narrow the list. Home improvements that raise the property's value, or consolidating debt at a much higher rate, are the two uses where the arithmetic clearly works. Funding consumption against your home converts a want into a fifteen-year secured obligation.
- Under current US rules, only when the money is used to buy, build or substantially improve the home securing the loan — and only if you itemise. Borrowing against the house to pay off credit cards or fund a holiday is not deductible. Keep records of what the money went on; the deduction depends on use, not on the loan type.
- Usually, and it is where the plan can change. Everything above rests on the home being worth $200,000; if the appraisal comes in lower, the 80% cap applies to the smaller number and your borrowing power falls with it. Some lenders accept an automated valuation on smaller draws, which is faster and cheaper.
Borrowing power by home value
Home values