See your equity, LTV ratio, and how much you could borrow with a HELOC.
Home Equity Products Compared
| Product | Type | Rate | Good For |
|---|
| HELOC | Revolving line | Variable (Prime + 1-2%) | Ongoing expenses, flexibility |
| Home Equity Loan | Lump sum | Fixed (6-9%) | Large one-time projects |
| Cash-Out Refi | New mortgage | Fixed | Large amounts, lower rate |
Why the 80% LTV Threshold Matters
When your LTV drops below 80%, three things happen at once: PMI disappears (typically $50–$200/month in savings), HELOC lenders become far more willing to approve you, and refinancing rates improve. The monthly PMI savings alone often exceed the benefit of chasing a marginally better rate — so paying down principal to hit 80% is frequently the highest-return move available to a homeowner.
LTV Ranges at a Glance
| LTV Range | Status |
|---|
| Below 80% | No PMI; best HELOC and refi rates |
| 80–90% | PMI required; HELOC still possible |
| 90–95% | PMI required; limited HELOC options |
| Above 95% | Negative equity risk; very few loan options |
How to Build Equity Faster
- Pay extra principal each month — Even $100/month extra on a 30-year mortgage cuts years off your loan and saves tens of thousands in interest.
- Switch to biweekly payments — 26 half-payments per year equal 13 full monthly payments, adding one extra month of principal annually.
- Avoid cash-out refinancing — Every time you tap equity, you reset the LTV clock and lose compounding progress.
- Targeted renovations — Kitchen and bathroom remodels typically return 60–80% of cost as increased appraised value.