HELOC on a Paid-Off House: How Much You Can Borrow
Yes, you can get a HELOC on a house with no mortgage. With no other loan on the property, all of the home's equity counts toward your limit, and the HELOC becomes the only lien on the home.
At a glance
- All your equity counts toward the limit.
- The HELOC becomes the first and only lien on the home.
- Most programs allow it. Some cap the line amount regardless of equity.
- Often faster and cheaper to close than a cash-out refinance.
How much you can borrow
| Maximum CLTV | Room for a HELOC |
|---|---|
| 70% | $420,000 |
| 80% | $480,000 |
With nothing owed, the limit is simply the home's value times the CLTV cap. Many programs also set a maximum line amount, so on a high-value home the program cap can be what limits you. Run your numbers in the calculator with a balance of zero.
The HELOC becomes the first lien
With no existing mortgage, the HELOC sits in first position. Most HELOC programs allow that. If you sell or refinance later, it's paid off first, like any mortgage.
HELOC or cash-out refinance?
On a paid-off home there's no low first-mortgage rate to protect, so the usual argument for a HELOC doesn't apply. The comparison comes down to amount, speed and cost:
- Smaller amount, needed soon: a HELOC usually closes faster with lower costs.
- Large amount, long-term: compare a cash-out refinance quote. A 30-year term means a lower payment, but more total interest.
See HELOC vs. cash-out refinance for how to compare offers.
Who uses it
- Retirees who want cash available without selling
- Investors buying another property with cash
- Owners funding a renovation or helping family
What lenders still check
Owning the home outright helps, but lenders still review credit, income or an alternative way of qualifying, title, insurance and the property itself. If the home is held in a trust or an LLC, see the title notes in HELOC requirements.
Frequently asked questions
Can you get a HELOC on a paid-off house?
Yes. Most HELOC programs allow it, and with no other loan on the home, all of your equity counts toward the limit.
How much can I borrow on a house with no mortgage?
Typically the home's value times the program's combined loan-to-value cap, such as 70% or 80%, up to the program's maximum line amount.
Is a HELOC better than a cash-out refinance on a paid-off home?
For smaller amounts needed soon, a HELOC usually closes faster with lower costs. For large long-term borrowing, compare a cash-out refinance quote.
Does the HELOC become a first mortgage?
Yes. With no other loan on the home, the HELOC is in first position.