CBS News
How much equity can you borrow with a HELOC?
Getty Images
American homeowners are sitting on a significant amount of home equity in today’s market, with the average homeowner having approximately $330,000 in equity right now. This substantial cushion provides opportunities for homeowners to access affordable financing through home equity products, like home equity loans and home equity lines of credit (HELOCs), which have become increasingly attractive as other borrowing options grow more expensive.
The stark contrast in borrowing costs compared to other options makes home equity financing particularly appealing right now. For example, personal loan rates have jumped significantly over the last couple of years, and rates on this type of borrowing now average 12.31% — a sharp increase from the average rate of 8.73% in May 2022. Credit card rates have climbed even higher and are sitting at a record-breaking average of over 23%. These high rates have led many borrowers to look for more affordable alternatives.
Against this backdrop, home equity borrowing stands out as one of the most cost-effective financing options available. Home equity loan rates currently average 8.40%, while HELOCs offer similar affordability at an average rate of 8.56%. But while home equity borrowing is one of the best borrowing routes to take right now, there are limits to how much you can borrow. So how much of your home equity can you tap into with a HELOC? That’s what we’ll explore below.
Start comparing the top home equity borrowing rates available to you now.
How much equity can you borrow with a HELOC?
Most lenders allow homeowners to borrow up to 85% of their home’s value across all mortgage loans combined, including both their primary mortgage and any home equity borrowing. This is known as the combined loan-to-value ratio (CLTV). To determine how much equity you can access through a HELOC, you’ll need to subtract your current mortgage balance from 85% of your home’s value.
For example, consider a homeowner who has the average amount of equity ($330,000). If their home is worth $500,000 and they have a remaining mortgage balance of $170,000, here’s what that calculation would look like:
- Maximum borrowing potential (85% of $500,000) = $425,000
- Subtract current mortgage: ($170,000)
- Available equity for HELOC = $255,000
As a result, these numbers can vary significantly based on your specific situation. Here are a few more examples to consider:
For a $750,000 home with a $400,000 mortgage balance:
- 85% of value = $637,500
- Minus mortgage = $237,500 available for HELOC
For a $300,000 home with a $150,000 mortgage balance:
- 85% of value = $255,000
- Minus mortgage = $105,000 available for HELOC
It’s important to note that while these calculations show the theoretical maximum, lenders will also consider other factors like your credit score, income and debt-to-income ratio when determining your actual HELOC limit. As with most other types of borrowing, the better your full financial picture is, the more flexibility you’ll generally have in terms of the amount you’re approved to borrow.
See what HELOC interest rate you could qualify for today.
Can I borrow more with a home equity loan?
While home equity loans and HELOCs are structured differently, they typically have comparable borrowing limits. Both products generally adhere to the same 85% CLTV maximum that lenders use to protect themselves against default risk. However, individual lender policies can vary significantly.
For example, some lenders may offer more conservative limits, only allowing borrowing up to 80% CLTV. Others might extend borrowing up to 90% CLTV for highly qualified borrowers with excellent credit scores and strong income profiles. The key difference between these products isn’t in how much you can borrow, but rather in how you access the funds and repay them.
When choosing between a HELOC and a home equity loan, the decision should focus on your specific needs rather than trying to maximize borrowing capacity. A HELOC comes with a variable rate and offers flexibility with a revolving credit line you can draw from as needed, while a home equity loan provides a lump sum with fixed monthly payments. Both options can provide access to roughly the same amount of equity, just with different terms and repayment structures.
The bottom line
Regardless of which option you choose and how much you borrow, it’s important to remember that borrowing against your home equity is a significant financial decision. While current market conditions make home equity borrowing particularly attractive from a cost perspective, it’s still crucial to have a solid plan for using and repaying the funds. After all, your home serves as collateral for these loans, making it crucial that you borrow responsibly and stay within your means to avoid putting your property at risk.
Transgender students from kindergarten through college at Ohio public and private schools will be banned from using multiperson bathrooms that fit their gender identities under a measure that Republican Gov. Mike DeWine said Wednesday that he has signed.
DeWine signed the law over the objections of Democrats, teachers’ unions and civil rights groups, which had hoped that his objections to a ban on gender-affirming care for minors last year would carry through and prompt another veto. It takes effect in 90 days.
The governor issued no statement regarding the signing.
The Republican-backed measure — labeled the “Protect All Students Act” — requires public and private schools, colleges and universities to designate separate bathrooms, locker rooms and overnight accommodations “for the exclusive use” of either males and females, based on one’s gender assigned at or near birth, in school buildings and other facilities used for school-sponsored events. It contains no enforcement mechanism.
“It revolves around safety, security, and, I think, common sense. It protects our children and grandchildren in private spaces where they are most vulnerable,” said Republican Ohio state Sen. Jerry Cirino, the bill’s sponsor.
Aaron Baer, president of the Center for Christian Virtue, which backed the bill, said in a statement, “Common sense is on a winning streak in America today. No student should be forced to go into the bathroom or locker room with a student of the opposite sex, and Ohio’s kids are better protected now because of Governor DeWine’s decision to sign this bill.”
The ACLU of Ohio was among the groups that had lobbied for a veto, condemning the measure as a violation of the right of privacy of LGBTQ+ Ohioans that will make them less safe.
School employees, emergency situations and people assisting young children or someone with a disability are exempted from the restrictions and schools can still offer single-use or family bathrooms.
With DeWine’s signature, Ohio adds to the pushback that’s cropped up nationally among many Republican politicians, including President-elect Donald Trump, as transgender people have gained more visibility and acceptance on some fronts in recent years.
Twenty-six states have now adopted laws restarting or banning gender-affirming care for transgender minors. The U.S. Supreme Court is scheduled to hear arguments Dec. 4 on whether Tennessee’s ban on such treatments can continue to be enforced; any ruling is likely to impact policies in other states, too.
At least 11 states have adopted laws, like Ohio’s, barring transgender girls and women from girls and women’s bathrooms at public schools – and in some cases, in other government facilities.
And at least 24 states have laws dictating which sports competitions transgender girls and women can join.
Ohio’s bathroom bill was debated for 19 months before finally clearing the GOP-led Legislature on Nov. 13, during Transgender Awareness Week. It was tacked onto a separate piece of legislation by the Ohio House that related to the state’s College Credit Plus program, which allows high-schoolers to earn college credit.
Trump’s campaign leaned heavily into opposing transgender rights in the last weeks of his race against Vice President Kamala Harris, including Trump’s vow at a Madison Square Garden rally that “we will keep men out of women’s sports” and campaign ads saying, “Kamala’s for they/them. President Trump is for you.”
It’s not clear what policies Trump might adopt once he takes office in January. But bills relating to gender issues are already being queued up in state legislatures that come into session early in 2025.
In Texas, for instance, there are proposed measures to bar using state money to pay for “gender reassignment,” to use state money to pay to reverse gender transitions, and to give people who receive gender-affirming care before they turn 15 until they turn 25 to sue their doctors for malpractice, among others. Democrats in the Republican-dominated legislature there have also introduced some bills intended to protect people from discrimination on the basis of “gender identity or expression.”
In Ohio, a law that both bars gender-affirming care for minors and blocks transgender girls and women from participating in girls and women’s sports competitions took effect in August. It took a rocky path, though. The measure became law only after the legislature overrode DeWine’s veto. And after that, a judge put enforcement on hold for about four months before allowing it.
Inflation-weary Americans still plan to spend more than ever this holiday season.
Individual shoppers are projected to spend $641 on gifts and just over $900 in total, according to the National Retail Federation. Another survey conducted this month by Gallup forecasts the overall holiday spending tab at an even higher $1,012 per person.
The most popular category for gifts? Clothing, according to the trade group, which commissioned a survey of 8,135 adults in early November, followed by gift cards, toys, books, video games, and food or candy. More than 183 million Americans are expected to shop during the Thanksgiving Day weekend, the NRF said.
Holiday spending is expected to hit record levels in November and December, growing between 2.5% and 3.5% from 2023 to upwards of $989 billion, the group forecast earlier in the month.
From the start of November through November 24, holiday shoppers had already spent $77.4 billion, according to Adobe Analytics, which tracks spending data in real time. In good news for retailers during what is a key sales period, Adobe forecasts holiday revenue in 2024 to approach $241 billion, which would surpass last year’s figure of roughly $221 billion.
Holiday spending on gift cards is expected to reach $28.6 billion, with the average shopper buying three to four gift cards and spending an average of $51.18 on each, the NRF estimated.
Hot toys
The NRF poll also asked people what kind children’s toys they planned to buy. Here are the top 10 for boys and girls:
Boys
- Legos
- Hot Wheels
- Cars
- Video games
- PlayStation
- Remote controlled cars
- Video game consoles
- Nerf products
- Spider-Man
- Trucks
Girls
- Barbie
- Dolls
- Legos
- Makeup/beauty
- Disney items
- Baby dolls
- Barbie Dreamhouse
- Clothes
- Electronics
- Squishmallows
Toys, video games and electronics will be key drivers of holiday spending, according to Adobe. Among other predictions, the company. expects Bluey Ultimate Lights & Sounds Playhouse to fly off virtual and physical shelves as a gift with strong appeal to the show’s fan base of 3- to 4-year-olds. Popular gifts this holiday season, Adobe found.
- Bluey toys
- Smartphones
- Bluetooth headphones
- MGA’s Miniverse items
- Call of Duty: Black Ops 6 video game
Not all fun and games
The holidays are also a time to consider safety in buying toys, according to the U.S. Consumer Product Safety Commission.
“From online shopping to in-person gatherings, safety and protecting our children should be a top priority this holiday season,” CPSC Chair Alex Hoehn-Saric said in a statement. “By being mindful of product hazards, checking for recalls and purchasing from reputable sources, you can protect your loved ones and ensure a joyous and accident-free holiday for all.”
In 2023, an estimated 154,700 children 12 years or younger were treated in emergency rooms due to toy-related injuries, and 10 kids died in toy-related incidents, the federal agency stated.
Non-motorized scooters accounted for the largest share of injuries — 53,000 — in 2023, and were involved in more than one in every five toy-related injury for children under 15, CPSC found.
Most toy-related deaths related to:
- Choking on small balls or rayons
- Drownings linked to flotation toys
- Entrapment inside a toy chest
- Ingestion of water beads
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.