The Quick Read: Your maximum loan is the appraised value of your home times the program’s maximum loan-to-value (LTV) percentage. Then you check the program’s other tests, and the lowest result wins. Conventional rate-and-term refinances on a one-unit primary home generally reach 95%. Cash-out refinances stop at 80%. Government streamlines skip the LTV test entirely. All figures are subject to lender guidelines and full file review.
Key Takeaways
- Maximum loan = appraised value × the program’s LTV cap. The cap covers the whole new loan, not just the cash.
- The program you pick sets the cap. Rate-and-term, cash-out, FHA Streamline and VA IRRRL each use different math.
- The appraisal sets the value. A listing-site estimate does not.
- Other limits can bind first: the existing payoff, loan size limits, your ratios, and seasoning.
- A cap is a ceiling, not an approval.
What Does “Maximum Loan by LTV” Actually Mean?
The maximum loan is the largest new mortgage a program will allow against your home’s value. LTV is the new loan divided by the appraised value. A $0 balance is 0%. A loan equal to the full value is 100%.
Refinance savings and break-even estimate
The starting figures are an example value with a balance in proportion and a placeholder for costs. Replace them with yours, and enter the current rate from your statement.
Editable benchmark: 7.32% as of October 22, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $245,000 current balance, a current rate you enter and a remaining term seeded at twenty-five years, closing costs seeded at $5,000 as an editable placeholder (not a fee quote) and rolled into the new loan, a thirty-year term at the current Freddie Mac benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The new rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a refinance quote; a refinance is priced by the lender at lock, and the current rate, the remaining term and the closing costs are figures you enter. The current payment is estimated from the balance, the current rate and the remaining term; the break-even divides the closing costs by the monthly saving and ignores the interest effect of a longer term. On the VA IRRRL the funding fee is added to the loan unless the veteran is exempt. Taxes and insurance are editable estimates. Licensed in sixteen states for consumer mortgages; Lendmire is a broker, never the lender.
Flip the formula and you get the ceiling. Take the appraised value, multiply by the program's cap, and that is the most the new first mortgage can be. The cap applies to the entire loan. That includes the payoff of your old mortgage, any costs you finance, and any cash you take.
Here is the part that trips people up. The cap is not your cash. Your cash is whatever is left after the payoff and costs come out of the maximum loan. For a rate-and-term refinance, that leftover is small by design.
Combined LTV (CLTV) adds a wrinkle. It counts every lien on the home. If a home equity line or second mortgage stays in place, it eats into the same ceiling. The first mortgage alone might fit under the cap while the combined total does not.
The CFPB's explanation of loan-to-value makes the same point from the consumer side. A higher LTV can mean a higher rate and mortgage insurance.
How Do You Find Your Number, Step by Step?
Start with the program, then the value, then the payoff. Run the formula, then check the other tests. Six steps cover it.
1. Pick the transaction type. Are you changing the rate or term only, or taking cash out? That choice sets the cap. The refinance programs Lendmire arranges run from conventional rate-and-term to FHA Streamline and VA IRRRL, and each starts from a different ceiling.
2. Establish the value. On a full-underwriting refinance, the appraisal is the value. Your own estimate is a planning number only.
3. Get the payoff statement. Ask your servicer for the exact payoff on the first mortgage. It includes accrued interest, so it runs higher than the balance on your last statement.
4. List what rides along. That means closing costs you plan to finance and any lien that must be paid off. On a limited cash-out refinance, only a second lien used to buy the property can be rolled in.
5. Run the ceiling. Multiply value by the cap. Compare it with payoff plus costs. The gap is your room.
6. Stress-test it. Run the same math at a lower value. Appraisals do come in under expectations.
Then check the program's side tests. FHA rate-and-term, for example, uses the lesser of several tests, and when the existing-debt test is lower than the LTV test, it controls.
What Does a Worked Example Look Like?
Say the appraisal comes in at 100% of what you expected. Say your payoff is 70% of that value and you want to finance costs equal to 3% of value. These are modeled assumptions, not market data.
Under a 95% cap, the ceiling is 95% of value. Payoff plus costs is 73% of value. You are well under the cap, so the loan fits, and the leftover room is not cash you can pocket.
| Line | % of appraised value |
|---|---|
| Program cap (rate-and-term) | 95% |
| Payoff of existing first mortgage | 70% |
| Financed closing costs | 3% |
| New loan (payoff + costs) | 73% |
| Room under the cap | 22% |
Now the cash-out version. A conventional cash-out on a one-unit primary home caps at 80%. If you want a new loan at the full 80%, the cash to you is 80% minus the 70% payoff minus the 3% costs. That leaves 7% of value.
Add a second lien that stays in place at 5% of value. Your CLTV becomes 78% on the modeled loan at 73%. You are still under the cap, but your room just shrank by five points. A line of credit with a large unused limit can matter the same way, because many lenders count the limit, not just the drawn balance.
How Does the Cap Change by Program?
The cap changes with the program, the number of units, and how you use the home. The table shows the primary-home figures. Every figure is subject to lender guidelines.
| Program | Max LTV (primary home) | Appraisal? |
|---|---|---|
| Conventional rate-and-term, 1 unit | 95% | Yes |
| Conventional rate-and-term, agency-owned loan | 97% (narrow cases) | Yes |
| Conventional cash-out, 1 unit | 80% | Yes |
| Conventional cash-out, 2-4 units | 75% | Yes |
| FHA rate-and-term | 97.75% | Yes |
| FHA Streamline | No LTV test | No |
| VA IRRRL | Not an LTV test | No VA appraisal |
| Jumbo (above conforming limit) | Up to 90% | Yes |
The Fannie Mae Eligibility Matrix is the agency's published source for conventional limited cash-out and cash-out caps. Freddie Mac's maximum LTV chart shows 95% for a one-unit primary residence on a no-cash-out refinance. Two- to four-unit homes and manually underwritten files run lower. The matrix also shows that Fannie Mae's older High LTV Refinance option is suspended, so do not plan around it.
The 97% figure applies only where the existing loan is agency-owned and a first-time-buyer program allows it. Most homeowners should plan on 95%.
One more consumer note: occupancy decides leverage. If the home is a second home or a rental, the caps drop. This article covers the home you live in.
Rate-and-Term or Cash-Out: Which One Are You?
A rate-and-term refinance replaces your loan without meaningful cash to you. A cash-out refinance gives you real proceeds. The line between them matters because the cap differs by 15 points on a one-unit home: 95% against 80%.
On a conventional rate-and-term, also called limited cash-out, the new loan pays off your existing first mortgage and the closing costs. It can also pay off a second mortgage that was used to buy the property. You can get only incidental cash back. Fannie Mae's Selling Guide on limited cash-out refinances lays out the rules. The new loan must be a first mortgage on the same property. It must pay off the existing first, including a first-lien home equity line. At least one borrower must be on title when the application is taken. Narrow exceptions exist for inheritance, a court award, a revocable trust, and a transfer from an LLC.
Here is where people get reclassified. Pay off a second lien that was not used to buy the home, such as a line you drew on for renovations or to catch up on missed payments, and the loan becomes cash-out. The cap drops to 80%. A deal that fit at 95% can fall apart.
Cash-out also adds seasoning. The first mortgage being paid off must generally be at least 12 months old, and a borrower must have been on title for six months. Delayed financing, inheritance, and legal-award exceptions exist. One wholesale lane reaches 89.99% LTV with no mortgage insurance. It needs a 680 score, a 50% ratio, a thirty-year fixed rate, a primary residence, a conforming balance, and its own six months of seasoning. In Texas, a cash-out on the homestead is capped by the state constitution at the agency figure, and that lane is not written there.
Lendmire's piece Can You Get a Cash-Out Refinance at Maximum LTV on a Primary Home? goes deeper on that fork.
How Do FHA Streamline and VA IRRRL Work Differently?
Both skip the LTV test. They are built to replace a government loan you already have with a better one, so the math is about your existing loan, not your home's value.
The FHA Streamline has no appraisal and no LTV or CLTV limit on the existing FHA loan. It uses limited credit review and requires a net tangible benefit, meaning the new loan has to measurably help you. HUD's streamline page says FHA does not allow closing costs to be included in the new mortgage amount. It also describes "no cost" refinances, where the lender pays costs by charging a higher rate. That is a trade, not a gift. The costs are built into the rate.
FHA rate-and-term, which is the version that does use an appraisal, goes to 97.75% on a primary home. The upfront mortgage insurance premium can be financed on top of that. The base loan stays in the LTV test, and the total cannot exceed 100% of appraised value.
The VA IRRRL works on an existing VA loan. No appraisal or credit underwriting package is required. You can finish with "no money out of pocket" by rolling costs into the loan or by taking a higher rate so the lender pays them. VA also notes the rate may rise when you go from an existing VA adjustable loan to a fixed rate.
The maximum here is tied to your payoff plus allowed costs and fees, not to a pure appraisal test. A 0.5% funding fee applies unless you are exempt. Seasoning is the later of 210 days and six payments, and the net tangible benefit test applies. An IRRRL allows no cash out. If you need equity, you need a VA cash-out refinance instead.
How Does the Appraisal Move Your Number?
Every point the value drops takes the same percentage off your ceiling. The maximum loan moves in lockstep with the appraisal. That makes a low appraisal a common reason a planned loan shrinks.
Here is the modeled sensitivity at a 95% cap, with value as 100% of your expected figure:
| Appraised value | Max loan (% of expected value) |
|---|---|
| 100% | 95.0% |
| 97% | 92.2% |
| 95% | 90.3% |
| 90% | 85.5% |
In the earlier example, the new loan sits at 73% of expected value. Even at 90% appraised, the ceiling is 85.5%, so it still fits. But on a cash-out near the cap, a five-point miss can erase most of the cash. Run your own numbers at two or three lower values before you commit to anything that depends on proceeds.
Rounding also matters at the edge. A file at 95.01% is not a 95% file. Lenders treat the cap as a hard line, so trim the loan or the financed costs until you are at or under it.
When Does Something Other Than LTV Set the Limit?
Often. LTV is only one test, and the lowest result wins. These are the others that most often bind:
| Constraint | What it does |
|---|---|
| Loan size limit | Caps the loan before LTV does in high-cost areas |
| Existing payoff | FHA and VA tie the maximum to what you owe |
| Credit score | Conventional programs start at a 620 decision score; jumbo at 660 |
| Total debt ratio | Automated findings allow up to 50%; manual files run 36% or 45% |
| Seasoning | Cash-out requires an aged first mortgage and time on title |
Loan size limits vary by county and change over time, so check the current limit for your area. Above the conforming limit, the jumbo lanes take over. Those reach 90% leverage with loans up to $5,000,000 and a 50% ratio ceiling on the fixed lanes. Final terms depend on the lender's guidelines, the property type, and the borrower's complete credit picture.
Credit events carry waiting periods too. These are agency rules: four years from a chapter 7 discharge, seven from a foreclosure, and four from a short sale or deed-in-lieu. Documented extenuating circumstances can shorten them.
Across the wholesale programs Lendmire places files with, the cap rarely sinks a refinance on its own. A tight ratio, a missed seasoning date, or a second lien nobody counted does it more often. Most of those are visible before you apply, which is why the six-step workflow starts with the payoff statement and the full lien list.
What If Your Maximum Loan Is Smaller Than You Need?
You have five realistic moves. None is dramatic, and each trades something.
- Wait. Payments reduce the balance and values may change. Seasoning rules also clear with time.
- Pay down the balance. Even a modest paydown lowers the LTV and can remove the need for mortgage insurance.
- Remove or restructure a lien. Closing out a line of credit that you do not use can change the CLTV math. Paying off a non-purchase second lien reclassifies the loan, so check the cap first.
- Choose a different product. A rate-and-term on a bigger scale may fit where a cash-out will not. A streamline may fit where a full refinance will not.
- Rethink the amount. Finance fewer costs. Take less cash. A smaller loan under the cap is better than a larger one that stalls.
Mortgage insurance also shapes the choice. It is required above 80% LTV. You can request cancellation at 80% of the original value, given good payment history, no subordinate liens, and no decline in value. The servicer must terminate it automatically at 78%, under the Homeowners Protection Act. Both tests use the original value, not today's. A higher-LTV refinance can restart that clock, so weigh the extra cost against how long you will keep the loan. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
What Mistakes Should You Avoid?
- Using a listing-site estimate as your value. The appraisal governs, and it can differ.
- Forgetting accrued interest. The payoff statement is higher than your last balance.
- Ignoring a second lien or credit line. It counts against combined LTV.
- Assuming 80% is always the cap. That is the cash-out cap. A one-unit rate-and-term goes higher.
- Assuming "no-cash-out" means zero cash. Incidental cash back is allowed under a small cap.
- Rolling closing costs into an FHA Streamline. FHA does not allow it.
- Expecting an IRRRL to pull out cash. It cannot.
- Treating the cap as an approval. Credit, income, and ratios still decide.
- Assuming the number is final. Payoff figures and appraisals can change right up to closing.
Key Terms Defined
Loan-to-value (LTV): The new loan divided by the appraised value, shown as a percentage.
Combined LTV (CLTV): The total of all liens on the home divided by its value.
Rate-and-term (limited cash-out) refinance: A refinance that pays off your first mortgage and costs, with only incidental cash back.
Cash-out refinance: A refinance that gives you proceeds beyond the payoff and costs, under a lower LTV cap.
Seasoning: The minimum age of your current loan or time on title before a program allows a refinance.
Net tangible benefit: The test that a streamline refinance has to measurably help you.
Appraised value: The professional opinion of your home's worth that the lender uses for LTV.
Your Next Step
If you are weighing a refinance and want the break-even run on your own numbers, Lendmire can help you compare the programs on the same home.
Frequently Asked Questions
What is the maximum LTV on a primary home refinance?
It depends on the program. A conventional rate-and-term on a one-unit primary home reaches 95%, and a conventional cash-out reaches 80%. FHA rate-and-term goes to 97.75%, while FHA Streamline and VA IRRRL do not use an LTV test.
Does the maximum loan include my closing costs?
Usually yes, on a conventional refinance. Financed costs count toward the new loan, so they count toward the cap. FHA Streamline is the exception, because FHA does not allow closing costs in the new mortgage amount. Costs you pay at the table do not touch the cap.
Can a low appraisal change which program I qualify for?
Yes. The maximum loan falls point for point with the appraisal. A drop can push a cash-out below the amount you need, or push a rate-and-term loan above its cap. In either case you may need to bring cash, shrink the loan, or switch to a streamline that skips the appraisal.
Does a home equity line count toward my limit?
Yes, if it stays in place. It counts toward combined LTV, and many lenders count the full credit limit, not just what you have drawn. A line that is paid off and closed as part of the refinance does not count against the new loan.
When does mortgage insurance end after a refinance?
You can request cancellation at 80% of the original value if your payment history is good and there are no subordinate liens. The servicer must end it automatically at 78%. Both tests use original value, and the refinance sets a new starting point.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps homeowners and home buyers in 16 states with FHA, VA, conventional and jumbo purchase and refinance loans arranged through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and the agency guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Get Started
Ready to find the right loan for you?
In about two minutes you can review financing options available for your home or investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. CFPB's explanation of loan-to-value
2. Fannie Mae Eligibility Matrix
3. Freddie Mac Maximum LTV/TLTV/HTLTV Ratio Requirements
4. Fannie Mae Selling Guide B2-1.3-02, Limited Cash-Out Refinance Transactions
5. HUD FHA Streamline Refinance
This article is part of Lendmire’s Refinance series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: Cash-Out Refinance Documentation for a Primary Home Versus a Second Home · Cash-Out Refinance vs Home Equity Loan for a Homeowner Near the LTV Limit · Typical Closing Costs on a Primary Home Refinance
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.