How Much Can You Borrow on a HELOC to Pay Medical Bills?

The Quick Read: It depends on your equity, not the size of the bill: a lender takes the home’s value, applies a combined loan-to-value ceiling that varies by property type and credit profile, and subtracts what you already owe. Credit, debt-to-income, and property type can pull the final number lower.

• Formula: home value × the lender’s CLTV ceiling, minus every lien already on the property.
• Investment property: 70% CLTV, a $25,000 minimum line, and a $500,000 maximum, with a 700 credit minimum.
• Primary residence: ceilings run up to 90% CLTV by credit tier, with lines up to $750,000.
• Second home: ceilings run from 75% to 90% CLTV by credit tier, with lines up to $500,000.
• Sizing: on this network at least 75% of the line is drawn at closing, so the line should match the bill.

A few notes on how to read these figures. A combined loan-to-value ratio (CLTV) adds your first mortgage and the new line together, then divides by the home’s value. Every figure here comes from the wholesale lenders Lendmire works with. Each is subject to lender guidelines and full file review, and none is a commitment to lend. Home equity lines of credit (HELOCs) through this network are available in 16 full-service states, a narrower footprint than Lendmire’s 41-market DSCR platform.

The Formula: How Much Can You Borrow?

Your maximum line equals the home’s value times the CLTV ceiling, minus what you still owe on existing liens. The medical bill never enters the math. A $9,000 bill and a $90,000 bill get the same maximum line from the same house.

Percentages make the method easy to see. Say a primary residence carries a first mortgage equal to 60% of its value, and your credit tier allows 70% CLTV. The room is 10% of the home’s value. If the first mortgage is 50% of value, the room is 20%. Then the line cap applies, so a very valuable home still stops at the program maximum.

Investment property runs tighter. At a 70% ceiling, a rental with a mortgage at 60% of value leaves only 10% of value to borrow against. A rental bought with 20% to 25% down already sits at 75% to 80% LTV on its first mortgage, so there is typically no room at all.

Lenders also leave a cushion on purpose. The federal consumer-finance regulator’s guide to using home equity says lenders typically require you to keep 10% to 20% of the home’s value as equity. That is why borrowing 100% of your equity is not an option.

What the Network Allows by Property Type

The ceiling depends on occupancy, so any single number you see quoted is probably for one property type. These are the ranges across the wholesale network, and a few tiers are worth knowing.

Lower credit tiers on a primary residence step down further. A 620 profile reaches 70% CLTV, and the lowest tiers drop below that.

The 90% ceiling exists only at a 720-or-better credit profile. A 700 score on a primary residence gets 85% at most, and the 75% tier at that score is what opens lines above $500,000. Texas primary residences are capped at 80% CLTV.

That describes the broader market. On this network, an investment property tops out at 70%.

Lines above $500,000 are primary-residence only. They cap at 75% CLTV, need a full appraisal, and require a credit profile of 700 or better (720 on the longer-runway program). The longer-runway program is the one with a five-year interest-only draw and a 25-year repayment period. The other wholesale program uses a three-year draw and a 17-year repayment.

What Shrinks Your Line Below the Equity Number

Equity sets the ceiling, but several tests can push the real line lower:

• Credit tier. Each step down in score lowers the allowed CLTV. The credit report can be no more than 90 days old at closing, and there are no rescores.
• Debt-to-income (DTI). The maximum is 50%, or 45% for profiles from 600 to 679. A ratio above 45% requires a 680 minimum.
• The payment test. The lender reviews your file on the interest-only payment calculated on the maximum line, not on what you plan to draw. A big line you do not need can still hurt your DTI.
• Property type. Single-family, 2-4 units, PUDs, townhomes, and condos (including non-warrantable) are eligible. Manufactured homes, co-ops, condotels, log homes, commercial, mixed-use, and agricultural-zoned properties are not. Sub-640 profiles are limited to single-family primary residences.
• Valuation. Lines at or below $500,000 usually run on an automated valuation. A higher CLTV may require a secondary valuation, and you can always request a full appraisal. Every line above $500,000 gets one.
• Exposure. A borrower is limited to three lines, and anyone with more than 15 financed properties is not eligible.
• Title. The property must be held by you personally or by a revocable living trust. LLCs, corporations, partnerships, and irrevocable, blind, or land trusts cannot hold title.

Rent does not help here. A HELOC is reviewed on your credit, your DTI, and your equity. As NerdWallet notes, investment-property lines also come with a smaller lender pool and stricter requirements than lines on a home you live in.

Self-employed borrowers can still qualify. The lender averages bank-statement deposits, removes transfers, and applies an expense factor, and the DTI and CLTV tests still apply. Lendmire’s article How to Use a Bank Statement HELOC to Pay Medical Bills walks through that path.

How Big Should the Line Be Compared With the Bill?

Match the line to the bill, because on this network at least 75% of it is drawn at closing. It is not a dormant standby fund. A line far larger than the bill means you leave closing owing far more than the bill, and you pay interest on every dollar drawn.

The minimum line is $25,000 (Michigan’s is $10,000), so a small bill may not justify a HELOC at all. After closing, the minimum for a later draw is generally $1,000, with Texas set at $4,000. Pricing floats during both the draw and the repayment period and never converts to fixed. A larger balance therefore carries more exposure if your payment moves.

Staged costs, such as treatment that runs for months, fit a line poorly on this network because most of it is drawn up front. If your costs will arrive over a long stretch, price out a smaller line against the cost of paying in installments.

Key Terms Defined

• Equity: the home’s value minus what you owe on it.
• CLTV (combined loan-to-value): all liens on the property, including the new line, divided by the home’s value.
• Draw period: the stretch when you can borrow, usually with interest-only payments.
• Repayment period: the later stretch when you pay down principal and interest, so payments rise.
• Lien: a lender’s legal claim on the property until the debt is paid.
• Vesting: how title to the property is held, such as in your name or a revocable trust.

The Draw Period, the Repayment Period, and the Risks

Here is how the loan behaves after closing. Two draw structures are available on primary residences and second homes: a three-year interest-only draw with a 17-year repayment, and a five-year draw with a 25-year repayment. Tennessee shortens both. Investment lines run only the five-year draw and 25-year structure.

The CFPB explains that you borrow only during the draw period, and that payments are often significantly higher once repayment starts. It also says a lender may block further draws if your home’s value drops significantly or your finances change. Falling behind could cost you the home.

That last risk deserves plain words. Medical bills are usually unsecured debt. A HELOC converts them into debt that a lender can collect through the property, and it can reduce the options you would have had in a hardship. Treat the line as a decision about your house, not just a way to pay a bill.

Try These Before You Borrow Against the House

Cheaper options cost nothing against your equity, and they come first. Ask the provider for an itemized statement and check it for billing errors. Ask about financial assistance or charity care, and about what your insurance covers, before you agree to a payment plan or a medical credit card. Check an HSA or FSA if you have one.

Medical collections still matter to lenders. State laws differ, so the status of a given bill depends on how it is reported. What the report shows affects your credit tier, and the tier sets your limit.

Another point matters if the bill relates to elder care. Cash from a draw sits in your bank account and can count toward asset limits for programs such as Medicaid. Talk to an elder-law attorney before borrowing.

Rental or Home: The Investor Decision

If you own rentals, you have a choice about which property secures the line. A line on the home puts the home at risk. A line on a rental puts the rental at risk, and rental lines come with tighter limits and stricter title rules. That includes a 700 credit minimum and the 70% CLTV ceiling.

A new lien and its payment are also visible when you apply for your next rental. An undrawn line still uses up some of your room, because the lender looks at the maximum.

Many investors hold rentals in an LLC, and a HELOC on this network cannot be written on a property titled that way. Those borrowers often look at a DSCR cash-out refinance instead. DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. The loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines.

A DSCR cash-out refinance does not fit medical spending. Extra debt on the property also reduces your coverage headroom. A DSCR of 1.00 is where many select programs start. A separate select-lender path takes coverage below 1.00 with leverage and terms adjusted. Clearing 1.00 is also not the same as positive cash flow, since repairs, vacancy, and management sit outside the calculation.

The complete DSCR loans guide covers the rental-financing side in full. The takeaway for medical costs is that the HELOC works from your personal credit and equity, while a DSCR loan works from the property’s rent, and each answers a different need.

Next Steps

If you are considering a home equity line and want to see how the numbers work, Lendmire can help you compare HELOC options based on the property, the equity available, credit profile, combined leverage, and your goals. Reach out at 828-256-2183 or request a quote at Lendmire’s quote page. Lendmire is a mortgage broker and arranges these lines through select wholesale partners, never lending directly.

About Lendmire

Lendmire (NMLS# 2371349) is a mortgage brokerage serving homeowners and real estate investors in its 16 full-service states. Home equity lines of credit are arranged through wholesale lending channels; Lendmire brokers the line and the lender underwrites each application under its occupancy-based guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. CFPB: Using home equity guide

2. NerdWallet: HELOC on an investment property

3. CFPB: What Is a Home Equity Line of Credit HELOC