Can you increase your HELOC limit? What to know

Your home's value has gone up since you first got your home equity line of credit (HELOC). But can you increase your HELOC limit to access more of that equity? 

The short answer is that your limit doesn't automatically grow with your home's value. To tap into your increased equity, you typically need to take action by applying for a loan modification, getting a new HELOC, or refinancing your existing one.

Let's explore what's possible when it comes to increasing your HELOC limit and what factors lenders consider.

Can I increase my HELOC limit?

Yes, you can often increase your home equity line of credit limit. Lenders may reevaluate your situation if you’ve experienced:

— Income growth

— Credit score improvements

— Home value appreciation since your original application

Increasing your limit isn't automatic, and it's not guaranteed. Most lenders require you to go through an application process similar to when you first got your HELOC. This typically involves ordering a new appraisal to determine your home's current market value, providing updated financial documentation to prove your income and assets, and submitting to a fresh credit check to verify your creditworthiness.

If your financial situation has improved since your original application, you might also qualify for a larger credit line than you currently have. You might be pleasantly surprised to discover you can double or even triple your available credit during this process.

Does your HELOC limit grow if your home value appreciates?

Unfortunately, your HELOC limit doesn't automatically increase when your home value increases — even if that appreciation is huge. A HELOC uses your home's value at the time of approval to determine your maximum credit line. 

Many homeowners who got HELOCs several years ago are sitting on substantial untapped equity. For example, if your home was worth $300,000 when you got your HELOC and is now worth $450,000, that extra $150,000 in value doesn't automatically become available through your existing credit line. The only way to access this additional equity is to increase your credit line or obtain new financing.

...in as little as 3 minutes – no credit impact

How to increase your HELOC limit

There are several ways to increase your HELOC limit and access more of your home's value:

Loan modification

A loan modification involves working directly with your current lender to adjust the terms of your existing HELOC, including potentially increasing the credit limit. This process requires proving that your financial situation has improved or demonstrating that your home's value has increased since you originally qualified.

Your lender will require:

— New appraisal to confirm the current market value

— Pay stubs

— Tax returns

— Bank statements

The main advantage of this approach is that you work with your existing lender, which may streamline the process since they already have your file and payment history. And if you've been a good borrower who always pays on time, they may be more willing to work with you. 

Keep in mind that not all lenders offer modification options, and some may have strict requirements that make this route harder than it seems. But it’s worth it to ask and see what your options are.

Apply for a new HELOC

Another option is to get a second HELOC or replace your current one with a new, larger credit line from a different lender. A new HELOC allows you to shop around to find better terms, lower interest rates, or a higher credit limit based on your home's current value and improved financial situation.

A new HELOC application typically requires:

— Financial documentation

— Credit check and employment verification

— New home appraisal

— Debt-to-income ratio review

— Financial stability assessment

Remember that you'll go through the complete application process again, including paying for a new appraisal (typically $300–$500) and potentially other closing costs. But it could be worth it if you pay less interest later. Some homeowners choose this route to take advantage of better interest rates or more favorable terms available in the current market, even if their existing lender would approve a modification.

Refinance your HELOC

Refinancing your HELOC replaces it entirely with a new loan that offers a higher credit limit and potentially better terms. This makes sense if you can secure a better interest rate, lower fees, or if your home has appreciated since your original HELOC.

When you refinance, you start fresh with a new lender. They'll evaluate your current financial situation, order a new appraisal, and determine what credit limit you qualify for based on today's criteria rather than what you qualified for years ago.

It always helps to explore your options. Start with Better. Better's One Day HELOC offers a fast solution for eligible homeowners looking to access their equity. Qualified applicants can get a decision in as little as 24 hours after closing.

What do lenders consider when setting your maximum HELOC amount?

Understanding the factors that influence your limit can help you prepare for the application process and potentially qualify for an increase to your HELOC. Lenders use a few different factors to determine how much they're willing to give you:

Your loan-to-value ratio

Your loan-to-value (LTV) ratio compares your total debt against your home's current market value. Most lenders allow you to borrow up to 80–85% of your home's value, minus what you still owe on your primary mortgage and any other liens. A lower LTV ratio typically means you can qualify for a larger HELOC and better interest rates.

For example, if your home is worth $400,000 and you owe $200,000 on your primary mortgage, a lender might allow you to borrow up to $120,000 with an 80% LTV ratio ($400,000 × 0.80 = $320,000, minus $200,000 = $120,000). 

Lending limits and guidelines can change regularly, such as the recent Federal Housing Finance Agency (FHFA) loan limit adjustments, which could affect your borrowing capacity.

Your credit score

A higher credit score demonstrates to lenders that you're a responsible borrower who pays bills on time and manages debt well. That means they might give you a higher credit limit and better interest rates. 

Most lenders prefer good credit scores for HELOCs, but the best terms usually go to borrowers with great credit (like above 740). If your credit score has improved since you first got your HELOC, this could work in your favor when requesting an increase.

Your debt-to-income ratio

Lenders examine your debt-to-income (DTI) ratio to ensure you have sufficient income to handle your existing debts plus the potential new HELOC payments. They typically prefer a DTI ratio below 40%, though some lenders may accept higher ratios for borrowers with good credit or more assets. For example, Better allows a max DTI of 50%.

A lower debt-to-income ratio shows you have more financial breathing room, which can help you qualify for a larger credit line. This improvement could boost your borrowing capacity if you've paid down other debts or increased your income since getting your original HELOC.

Your employment history and income stability

Lenders prefer to see a few years of steady employment, though they may make exceptions for borrowers who've changed jobs within the same industry or received promotions. Self-employed borrowers or those with variable income may face additional scrutiny, but they can still qualify with proper documentation like tax returns, bank statements, and other proof of income stability.

Your home's appraised value

Professional appraisers consider recent comparable sales in your neighborhood, your home's condition and features, local market trends, and any improvements you've made since your last appraisal. Recent home improvements or general market appreciation can work strongly in your favor. On the flip side, declining property values in your area might limit your options. 

Access your equity faster with Better

While your HELOC limit doesn't automatically increase with your home’s value, you have several viable options to access more of your equity. Whether you change your existing loan, apply for a new HELOC, or refinance entirely, the key is understanding what lenders look for and preparing your application accordingly. 

Better's One Day HELOC provides qualified homeowners with a fast way to access additional funds, with an approval decision in 24 hours and cash in as little as 7 days. If you're considering increasing your access to home equity, Better’s your new trusted lender. Apply for pre-approval in just 3 minutes.

...in as little as 3 minutes – no credit impact

Frequently asked questions

What increases equity in your home?

Your home equity grows in two ways. First, every mortgage repayment you make reduces your loan balance, increasing your ownership stake in the property. Second, your home's market value might appreciate over time, which could be due to neighborhood improvements, favorable market conditions, local economic growth, or home renovations.

What's the maximum HELOC amount I can get?

Most lenders allow you to borrow up to 80–85% of your home's current market value, minus your existing mortgage balance and other liens. The exact percentage depends on your credit score, income, debt-to-income ratio, and the lender's requirements. Better allows borrowers to access up to 90% of their home’s equity, up to $500,000.

How much does a HELOC cost?

HELOC rates and costs vary by lender, but there will be a few fees. Common HELOC costs include: 

— Application fee: $0–$500

— Appraisal fee: $300–$500

— Origination fee: 0.5–2% of credit line

— Annual maintenance fee: $25–$100

Can I have multiple HELOCs on the same property?

While having multiple HELOCs on the same property is technically possible, most lenders prefer that you consolidate your home equity borrowing into a single credit line — and one bill is easier to handle than two or three. Multiple HELOCs can complicate your finances, make it harder to track your total debt, and may limit your borrowing capacity with each lender.

How long does it take to increase a HELOC limit?

The timeline for increasing your HELOC limit varies by lender and your specific situation, but the process typically takes 30–45 days from application to final approval. This timeframe includes application review, home appraisal scheduling and completion, income and asset verification, credit checks, and final underwriting.

Some lenders — like Better — offer faster processing for qualified borrowers. In fact, you can get a custom quote in as little as 3 minutes, and cash in as little as 7 days.

...in as little as 3 minutes – no credit impact