What is the maximum percentagemost lenders typically allow for borrowing against home equity?

Lenders typically allow homeowners to borrow against their home equity up to a maximum percentage, and the range of 80-85% is most commonly accepted in the industry. This means that a borrower can generally borrow up to 80-85% of the appraised value of their home, minus any existing mortgage balances.

This percentage is established to ensure that borrowers maintain sufficient equity in their homes, reducing the lender's risk in the event of default. Borrowing too much against home equity could lead to financial instability for the borrower, particularly if property values fluctuate or if there are changes in their financial situation. Additionally, staying within this range helps to ensure that the homeowner can continue to manage their mortgage payments and other financial obligations without becoming over-leveraged.

The options that fall below or above this range reflect either more conservative lending practices or higher risk thresholds that are less typical among standard lenders.