Does a HELOC have different rules than a cash-out?

Yes — HELOCs and home equity loans allow up to ~85% CLTV and often skip a full appraisal, while a cash-out refinance caps at 80% LTV and resets your first mortgage.

Combined Loan-to-Value (CLTV) Limits

Understanding combined loan-to-value (cltv) limits up front prevents surprises in underwriting. The 2026 specifics are below.

The rule for 2026

Lenders cap your combined loan-to-value (CLTV) - all mortgage liens divided by home value. In 2026 HELOCs and home equity loans typically allow up to 85-90% CLTV for strong borrowers, while a cash-out refinance is usually capped at 80%. Investment properties are tighter, generally 70-75%.

Lenders set their own overlays on top of the basics. Meet the standard below first, then confirm whether your lender layers anything extra.

Documentation you'll typically need

Recent pay stubs and two years of W-2s or returns
Two months of bank statements
Your current mortgage statement and homeowners insurance
A recent appraisal or automated valuation

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Frequently Asked Questions

Combined Loan-to-Value (CLTV) Limits — the bottom line for 2026?: Lenders cap your combined loan-to-value (CLTV) - all mortgage liens divided by home value. In 2026 HELOCs and home equity loans typically allow up to 85-90% CLTV for strong borrowers, while a cash-out refinance is usually capped at 80%. Investment properties are tighter, generally 70-75%.
Does a HELOC have different rules than a cash-out?: Yes — HELOCs and home equity loans allow up to ~85% CLTV and often skip a full appraisal, while a cash-out refinance caps at 80% LTV and resets your first mortgage.