PenFed Mortgage with Confidence


How Much HELOC Can I Get? How to Qualify for a HELOC?

What You'll Learn: How a HELOC works, how much equity you need to qualify, and HELOC LTV limits


How Much HELOC Can I Get?

Thinking of a home equity line of credit (HELOC) to fund home improvement projects or other needs? Read on to learn how much equity you need for a HELOC, the HELOC maximum amount, and how much loan you may qualify for.

How does a HELOC work?

A HELOC is a line of credit that you draw from as needed. It's similar to a credit card, where you have a credit limit - except it's secured by the equity you have in your home.

Another important difference between a HELOC and a typical revolving credit line is that a HELOC has two periods:

  • Draw Period - During the draw period, you can access funds and make interest-only payments. This commonly lasts 10 years.
  • Repayment Period - In the repayment period, you make regular monthly payments with principal and interest. You can no longer borrow during this time.

Why use a HELOC and not other forms of credit? Many homeowners prefer to finance things like home improvements with a HELOC because they usually offer lower interest rates and the flexibility of a draw period. HELOC rates are usually variable and often more favorable than unsecured loans like most credit cards. Just like other types of home loans, rates can depend on how much equity you have, your credit score, and whether you live in the property.

How much equity do I need for a HELOC?

Every lender has their own HELOC guidelines. Many require borrowers to have at least 20% equity (although some will go as low as 15%) and a loan-to-value ratio (LTV) of 80% - that's the max HELOC LTV at PenFed.

How much HELOC can I qualify for?

Your HELOC loan amount will depend on many factors. Your income, credit score, property type, and whether or not you live in the home make a difference in eligibility and loan size. It helps to have a favorable debt-to-income ratio (DTI). The max DTI for a HELOC varies by lender, but is typically between 43% and 50%. How much equity you have in your home is another important variable.

If you meet the qualifications, many lenders allow you to access up to 80% of the equity in your home. But the final line of credit also takes into account your outstanding mortgage balance. Let's see what that looks like for two theoretical scenarios.


Borrower 1

Borrower 2

Current Home Value



Mortgage Balance



LTV Ratio



Credit Score



DTI Ratio



Property Type

Primary Residence


May Qualify For



In this example, both borrowers were within the HELOC DTI and LTV limits and qualified for a credit line. Keep in mind their credit scores and property types could have affected the loan limits and interest rates. You can run a simple estimate using a HELOC qualification calculator.

What is the maximum HELOC amount?

Every lender has their minimum and maximum loan amount. As of December 2022, for PenFed, the minimum HELOC amount is $25,000. The max HELOC loan amount is $500,000.

Can I increase my home equity line of credit?

When you receive your HELOC, you will have a set credit limit for the life of that line credit. If you need additional funds over your HELOC limit, you'll have to apply for another loan. That's why you may want to consider taking out the maximum amount you might need over the next several years. You only draw the money you need and you're only charged interest on the funds you take out.

How many HELOCs can you have?

Can you apply for multiple HELOCs? As long as you qualify, you can have multiple HELOCs or home equity loans. Depending on your circumstances, a cash-out refinance can sometimes be a better option.

What is the average HELOC amount?

According to Experian, the average HELOC balance in 2021 was $39,556 - a 5.7% decrease from the prior year.

How much HELOC should I get?

Many borrowers choose to accept the maximum amount they qualify for so they don't have to worry about a HELOC increase (which would require a new loan).

If you're considering doing several remodeling projects over the next 10 years, you may want to apply for enough funds to cover all of those projects even though they may be several years out. For example, say you want to remodel your kitchen this year and add a pool next year. In that case, wait to finance the pool until next year. That way, you're only paying interest on the money you're using.

How do I get a HELOC?

To apply for a HELOC, contact your lender and complete an application. By going through the process, you'll get an idea of how much you may need to borrow. One of the advantages of this type of home equity line of credit is that it is easier and faster than a traditional mortgage.



Ready to see if you qualify? Start a HELOC application.


1-800-970-7766 OR

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5


Rates as Low as % APR with flexible use of funds

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5