On a $625,000 home with a $312,500 mortgage balance, most lenders allow borrowing up to $218,750 — 85% of the home's value ($531,250) minus what you still owe. That is less than your $312,500 of raw equity, because lenders size these loans off combined loan-to-value.
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Up to $218,750 at a 85% combined loan-to-value cap with a $312,500 first mortgage. A more conservative 80% lender would allow $187,500.
Lenders cap total liens at a percentage of value, typically 80–85%. At 85% your total debt can reach $531,250; the remaining $93,750 stays as the lender's cushion against a price decline.
Borrowing the full $218,750 at 8.50% costs about $1,898.36 per month amortizing over 20 years. A HELOC's interest-only draw payment would be about $1,549.48.
The payment jumps from about $1,549.48 interest-only to $1,898.36 fully amortizing — an increase of $348.88. Plan for it years ahead; this is the most common HELOC surprise.
If your first mortgage carries a below-market rate, usually yes. A cash-out refinance re-prices your entire $312,500 balance at today's rate; a home equity loan or HELOC leaves it untouched and charges the higher rate only on what you borrow.
Sources: Freddie Mac Primary Mortgage Market Survey; Tax Foundation — Property Taxes by State; Consumer Financial Protection Bureau.
Estimates for educational purposes only — not a loan offer, financial advice, or a commitment to lend. Actual rates, payments, and terms vary by lender and creditworthiness.