The Quick Read: Your borrowing ceiling depends on two things: the type of loan and whether you take cash out. Conforming loans follow published agency ceilings that drop as you take more cash. Jumbo loans have no single national ceiling, because each lender sets its own. Appraised value, credit, and existing liens can lower your limit further.
Key Takeaways
- LTV (loan-to-value) is the new loan balance divided by your home’s appraised value. On a refinance, the appraisal decides the denominator, not your estimate.
- A rate-and-term or “limited cash-out” refinance gets much higher leverage than a cash-out refinance on the same home.
- Conforming loans follow a published matrix. Jumbo loans follow each lender’s own matrix, which tightens as the loan amount grows.
- In the jumbo programs Lendmire places files with, leverage tops out at 90% on the strongest files and loans reach $5,000,000. Cash-out sits below purchase leverage.
- The cap is a ceiling, not a promise. Credit, ratios, reserves, seasoning, and second liens can all pull your limit below it.
What Does LTV Measure on a Refinance?
LTV is the new loan divided by the appraised value, shown as a percentage. A 70% LTV means the loan equals 70% of what the home appraises for. You own the other 30%. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
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.
On a purchase, lenders use the lower of the sales price or the appraisal. A refinance has no sales price. The appraisal is the number, which makes it the most important input you do not control.
Two related ratios matter when you have more than one loan on the home:
- CLTV (combined loan-to-value) adds any second mortgage to the new first loan.
- HCLTV (home equity combined loan-to-value) goes further. It counts the full credit line on a home equity line of credit, whether or not you have drawn on it.
That last point trips people up. An unused HELOC with a large limit can still count against you, unless it is paid off and closed as part of the refinance.
The lender checks the highest of these ratios against its matrix. The strictest one binds. Lenders also round up: a result of 94.01% gets treated as 95%. Small differences in appraised value or payoff balance can matter more than you expect.
Is Your Refinance Rate-and-Term or Cash-Out?
Classification comes first, because it picks the row of the matrix your loan sits in. There are two main buckets.
Limited cash-out (often called rate-and-term). The new loan pays off your first mortgage and the closing costs. It can also pay off a second lien if that second loan was used to buy the home. You may walk away with a small cash allowance, but nothing meaningful.
Cash-out. You take out more than the payoff and costs. Paying off a second lien that was not used to buy the home, such as a HELOC you used for a remodel, also tips the loan into this bucket.
That second rule surprises borrowers. You may think you are doing a simple refinance. If you roll in a renovation HELOC, the lender treats it as cash-out. The cap drops, the waiting-period rules apply, and the pricing follows the cash-out bucket.
Texas adds a wrinkle. It has its own state rules for cash-out loans on a home you live in. If you live there, ask early how the state rule changes your options.
Where Conforming Ends and Jumbo Begins
A conforming loan fits under the loan limit for your county. A jumbo loan begins one dollar above it. That limit is not the same everywhere. It depends on local home values, and it resets each year.
The limit applies to the loan amount, not your home's value. A home worth a lot can still carry a conforming loan if the new balance stays under the county limit. A modest home with a large new balance, after a big cash-out, can cross the line.
Why does the line matter? Conforming loans can be sold to the government-sponsored buyers, so they follow their published rules. Jumbo loans cannot. Lenders keep or sell them under their own standards, so the lender sets the leverage, credit, and reserve rules. Lendmire's jumbo loan programs work this way. A broker compares several wholesale lenders on one file, because their limits differ.
A middle category exists too. Loans above the national baseline but under your county's higher limit are "high-balance" or "conforming jumbo." They stay inside the conforming matrix. More on that below.
Conventional Limits for a Primary Home
Here is the current conforming matrix from Fannie Mae's Eligibility Matrix for a home you live in:
| Refinance type | 1 unit | 2–4 units |
|---|---|---|
| Limited cash-out, fixed | 97% | 95% |
| Limited cash-out, adjustable | 95% | 95% |
| Cash-out, fixed or adjustable | 80% | 75% |
Read the table as a ceiling for the whole new loan. If you have a second lien, the combined ratios must fit under the same row. The matrix also ties credit-score tiers to the highest of the three ratios, so a lower score can mean a lower cap than the table shows.
The most common misunderstanding is that 80% applies to every refinance. It applies to cash-out. A limited cash-out refinance on a one-unit home reaches much higher. Lendmire's explainer Conventional Cash-Out Refinance LTV Limits for a Primary Home goes deeper on the 80% row.
Rounding comes from the agency's Selling Guide on LTV ratios. Results are cut to two decimals, then rounded up to the next whole percent. If your numbers land close to a cap, ask the lender to run them exactly.
One more mechanical point. Above 80% LTV on a conventional loan, expect private mortgage insurance. You can ask to cancel it once your balance reaches 80% of the original value, if you meet payment and lien conditions. Rates for it vary by file, so the loan estimate is where you see the real cost. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Jumbo Limits: Set by the Lender
No national rule sets jumbo LTV. As the CFPB's conventional loan page puts it, jumbo rules vary by lender and usually call for good credit and a high down payment.
Here is how the wholesale jumbo programs Lendmire places files with look in practice:
| Feature | What the lanes look like |
|---|---|
| Headline credit floor | 660 decision score |
| Top leverage | Up to 90% on the strongest files |
| Several lanes | Stop at 89.99% CLTV |
| Remaining lanes | Stop at 80% |
| Largest loan | $5,000,000 on the largest lanes |
| Debt-to-income ceiling | 50% fixed; 45% adjustable; 43% on interest-only structures |
Every figure is subject to lender guidelines and full file review, and none is a commitment to lend. Treat them as the envelope, not the offer.
Three patterns matter more than the headline numbers.
Cash-out sits lower. On jumbo files, cash-out leverage runs below purchase leverage. The largest lanes also put a cap on the cash you can take. So the room you calculate from the LTV ceiling alone may overstate what you get.
Size tightens everything. As the loan amount grows, reserves rise. Reserves are the months of full housing payment you must hold in liquid savings after closing. Above a lane's threshold amount, lenders order two appraisals instead of one. Credit floors can also climb with the amount.
Structure changes the ratios. Fixed, adjustable, and interest-only loans each carry their own debt-to-income ceiling, as the table shows. A borrower stretched on the ratio sometimes finds the fixed lane has more room than the other two.
Occupancy matters too. A home you live in gets the best leverage. Second homes and investment properties sit at lane-specific, lower leverage.
Here is a pattern that comes up on files like these. Borrowers often arrive with a target cash-out figure based on the LTV ceiling. Then the lane's cash cap, a second appraisal, or the reserve requirement changes the plan. The files that go smoothly usually start with the lane's rules, then work backward to the amount.
Turn the Limit Into Cash
The formula is short:
Maximum new loan = appraised value × the LTV cap.
Cash to you = maximum new loan − payoff − any costs you finance.
A worked example uses percentages of value, with no dollar amounts. Suppose a home appraises as expected, and the lender's cap is 80%:
- Home value: 100%.
- Existing mortgage payoff: 65% of value.
- Financed closing costs: 2% of value.
- Maximum new loan at an 80% cap: 80% of value.
- Cash left over: 80 − 65 − 2 = 13% of value.
Same file, but the appraisal comes in 5% below expectations:
- Appraised value: 95% of what you expected.
- Maximum new loan: 80% of that, which is 76% of expected value.
- Cash left over: 76 − 65 − 2 = 9% of expected value.
A 5% appraisal miss cut the cash by roughly a third. Appraisals matter that much.
Financed costs also eat room. Every point of cost you roll in reduces cash one-for-one. If you can pay costs out of pocket, you keep more usable LTV. And on the largest jumbo lanes, a cash cap can reduce the figure further.
The ceiling is not a target. Borrowers who take the maximum leave little equity cushion and little room to move if values dip. Ask yourself what you would still be comfortable with if the home were worth less.
What Pulls Your Limit Below the Cap
The lender walks through the same steps on nearly every file:
1. Classify the loan as limited cash-out or cash-out.
2. Check eligibility gates such as seasoning and time on title.
3. Order the appraisal and use its value.
4. Calculate LTV, CLTV, and HCLTV against the right matrix.
5. Underwrite the file: income, assets, credit, ratios, and reserves.
6. Cap the loan at value × the lowest applicable limit.
Step 2 trips up many borrowers. Under the agency's cash-out refinance rules, the existing first mortgage must be at least 12 months old. At least one borrower must have been on title for six months. A home listed for sale must come off the market by the disbursement date. And when the automated underwriting shows a debt-to-income ratio above 45%, six months of reserves are required.
Jumbo lanes have their own gates. They are different from the conforming ones, so do not assume the same waiting periods carry over.
Other items that shrink your limit:
- Credit score. Matrix rows step down as scores fall.
- Debt-to-income ratio. The lane's ceiling can limit the loan before the LTV cap does.
- Reserves. If your savings fall short, the loan amount may have to shrink.
- Second liens. They count toward CLTV or HCLTV.
- Property type. Condominiums, especially non-warrantable ones (those that fail standard project rules), can narrow your options. A couple of jumbo lanes accept them.
Where the General Rule Breaks
Delayed financing. If you paid cash for the home, the six-month title wait can be waived. You can then pull money back out right away. The loan is still treated as cash-out, with cash-out caps. Inherited homes and some divorce awards also skip the title wait.
Two-to-four unit homes. Even when you live in one unit, the caps are lower than on a single-family home. Lendmire's article Conventional Cash-Out LTV Limits for a 2-4 Unit Primary Home covers that row.
Manufactured homes. The conforming rules limit them. Single-width manufactured homes are not eligible for cash-out on that matrix.
High-balance loans. Each year the FHFA sets a baseline conforming loan limit. In high-cost counties the limit rises, up to 150% of the baseline. Alaska, Hawaii, Guam, and the U.S. Virgin Islands have their own statutory limits. The agency usually announces the next set in November, effective in January. Lenders sometimes advertise early numbers, which are not official. If your new balance sits close to the line, watch the announcement.
Small cash allowances. A limited cash-out loan can include a small amount of cash back. The exact allowance depends on the lender's guidelines and can change over time, so ask the lender what applies on your file.
Second homes and rentals. Occupancy decides the leverage, and these properties sit lower than a home you live in.
Other programs. FHA and VA loans have their own refinance caps. Some reach higher cash-out leverage than conventional.
If You Are Over the Cap
Start by finding where the gap is. Is it the appraisal, the cash you want, or the debt ratio? Then work through these options:
1. Take less cash. The simplest fix. Trim the cash-out until it fits.
2. Pay down the balance. Even a modest lump sum can bring you under a tier.
3. Pay costs out of pocket instead of financing them.
4. Pay off or close a second lien that is inflating your combined ratio.
5. Move to a different structure. A fixed lane may carry a higher ratio ceiling than adjustable or interest-only.
6. Wait. If the gate is seasoning, time solves it. If it is value, the market may.
7. Dispute a low appraisal with comparable sales, when you have a basis.
If the new loan sits near the county limit, the answer may be to stay conforming or go jumbo. The tradeoffs run both ways, and one clean comparison on the same home settles it better than a rule of thumb.
Key Terms Defined
- LTV (loan-to-value): The new loan divided by the home's appraised value, shown as a percentage.
- CLTV (combined loan-to-value): Your first loan plus any second loan, divided by value.
- HCLTV: Combined LTV that counts the full limit of a home equity line, drawn or not.
- Limited cash-out refinance: A refinance that pays off the first mortgage and costs, with little or no cash to you.
- Cash-out refinance: A refinance where you take out more than the payoff and costs.
- Conforming loan: A loan at or under your county's loan limit, following agency guidelines.
- Jumbo loan: A loan above the county's conforming limit, with lender-set rules.
- Seasoning: The waiting period a lender requires before a refinance, such as time on title.
- Reserves: Liquid savings, measured in months of full payment, that you hold after closing.
Frequently Asked Questions
Is 80% the maximum LTV for every primary home refinance?
No. Eighty percent is the conforming cap for cash-out on a one-unit home. Limited cash-out on the same home reaches 95% to 97% under the conforming matrix. Jumbo lanes set their own caps, and Lendmire's jumbo lanes either stop at 80% or reach about 89.99%, subject to lender guidelines.
Does a jumbo loan follow the same LTV rules as a conforming loan?
No. The conforming matrix does not govern a jumbo loan. Each lender writes its own limits, and they tighten as the loan amount, cash-out amount, or credit risk goes up.
Which value does the lender use?
The appraised value. There is no sales price on a refinance, so your own estimate carries no weight. A lower appraisal shrinks the maximum loan directly.
Do closing costs count toward my LTV?
Yes, if you finance them. They add to the new loan balance, which uses up room under the cap. Paying them from savings keeps more room.
What if my second mortgage or HELOC is still open?
It counts toward combined LTV. If the line is open, the lender may count its full limit, drawn or not. Paying off and closing a line can change your cap.
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. Lendmire is a mortgage broker licensed for consumer lending in 16 states, arranging loans through wholesale lenders. Program details are subject to lender guidelines and full file review, and nothing here is a commitment to lend. The best first move is to bring your payoff balance, a realistic value, and the amount of cash you want, then see which lane fits.
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.
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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. Fannie Mae Eligibility Matrix
2. Fannie Mae Selling Guide B2-1.2-01, Loan-to-Value Ratios
4. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
5. FHFA – 2026 conforming loan limit announcement
This article is part of Lendmire’s jumbo loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: High-Balance Conventional vs Jumbo Loan for a Second Home Buyer · Should a Jumbo Borrower Refinance to Lower the Payment? · How to Meet Jumbo Cash-Out Refinance Reserve Requirements on a Primary Home
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.