If your lender uses a different maximum LTV ratio, you may want to do the calculation by hand. Here’s how:
- Divide your lender’s maximum LTV percentage by 100
- Multiply that number by your home’s value
- Subtract how much you owe on your first mortgage from the number you got in Step 2
For example, let’s say your lender allows a 95% LTV ratio and you have a $400,000 home with a $90,000 mortgage balance. You’d multiply 0.95 by $400,000 to get $380,000. You’d then subtract $90,000 from $380,000 to arrive at your home equity loan amount of $290,000.