Here’s the quick answer: take your home’s appraised value, multiply it by 80%, then subtract what you currently owe on your mortgage. That’s the maximum equity you can access under Texas law. The rest of this article walks through why, with a real example.
The Quick Answer: How Much Equity You Can Access
Texas law caps combined home equity borrowing at 80% of your home’s appraised value. Your accessible equity is calculated as: (Home Value × 80%) minus your current mortgage balance. Whatever’s left after that calculation is the maximum you could potentially access through a Texas home equity loan, HELOC, or cash-out refinance.
Texas Home Equity Rules Every Homeowner Should Know →
Why Texas Caps Access at 80% Combined Loan-to-Value
This isn’t a lender preference, it’s written into the Texas Constitution. The 80% cap exists specifically to make sure homeowners always retain at least 20% equity in their homes, a protection against the kind of over-leveraging that hurt homeowners nationally in the years before the 2008 financial crisis.
Texas Finance Commission – Official Home Equity Consumer Disclosure
A Simple Example
Say your home is appraised at $450,000, and you currently owe $220,000 on your mortgage. Here’s the math: 80% of $450,000 is $360,000. Subtract your $220,000 balance, and your accessible equity is $140,000. That’s the maximum you could potentially borrow against, combined across any home equity lien on the property.
Accessible Equity Is Not the Same as Total Equity
This is the part that catches homeowners off guard. In the example above, your total equity, home value minus what you owe, is actually $230,000. But your accessible equity is only $140,000, a full $90,000 less. That gap exists because Texas requires you to keep 20% equity in the home at all times. Your total equity and what you can actually borrow against are two different numbers, and conflating them is one of the most common misunderstandings homeowners have about Texas home equity lending.
What Is a Texas Cash-Out Refinance? →
What Affects Your Number
A few factors move this calculation. Your home’s appraised value, not your purchase price or an online estimate, is what actually counts, and that value can only be confirmed through a real appraisal at the time you apply. Any existing liens against the property, not just your primary mortgage, reduce your accessible equity further. And if you already have a home equity loan on the property, Texas’s one-loan-at-a-time rule and 12-month waiting period both apply before you can access more.
How to Get Your Exact Number
The formula above gives you a solid estimate, but your actual accessible equity depends on a current appraisal and a full review of any existing liens. Running your specific numbers through a real calculator, and reviewing your Texas Home Equity Decision Guide, gives you a far more accurate picture than a rough estimate based on an online home value tool.
Mortgage Planner’s Perspective
Knowing your accessible equity before you start planning a project, a debt consolidation, or any other use of your home’s value keeps expectations grounded in what’s actually possible under Texas law, rather than a number based on your total equity that was never fully accessible in the first place.
NEXT STEP
See your own accessible equity number. Run your scenario through our Texas Cash-Out Calculator.
Or download our free Texas Home Equity Decision Guide for a deeper walkthrough.
RELATED ARTICLES
What Is a Texas Cash-Out Refinance?
Texas Home Equity Rules Every Homeowner Should Know
Texas Cash-Out Refinance vs. HELOC: Which Is Better?
Texas Home Equity Loan vs. Cash-Out Refinance
Texas Cash-Out →
FREQUENTLY ASKED QUESTIONS
The Formula
Q: How much equity can I access from my Texas home?
A: Multiply your home’s appraised value by 80%, then subtract your current mortgage balance. The result is your maximum accessible equity under Texas law.
Q: Why is my accessible equity less than my total equity?
A: Texas requires homeowners to retain at least 20% equity in their home at all times. Your total equity (value minus what you owe) is often higher than what you can actually borrow against.
What Affects the Number
Q: Does my home’s purchase price count, or its current value?
A: Current appraised value, confirmed through a real appraisal at the time you apply, not your original purchase price or an online estimate.
Q: Do other liens on my home affect my accessible equity?
A: Yes. Any existing liens against the property reduce your accessible equity, since the 80% cap applies to your combined total borrowing, not just your primary mortgage.
Q: Can I access more equity if I already have a home equity loan?
A: Not immediately. Texas allows only one home equity loan at a time, and requires a 12-month wait between closing one and closing another on the same home.
Texas Mortgage Plan – 50+ years of combined mortgage experience, serving homeowners and homebuyers across Flower Mound and the DFW Metroplex. Elizabeth Rose, NMLS 252686, CDLP® Certified Divorce Lending Professional | Shea Patton, Mortgage Advisor, NMLS #251397, Licensed Realtor. Texas Mortgage Plan is a d/b/a of Legacy Mortgage, NMLS #1759275 | Equal Housing Lender
