How much can you actually cash out of a paid-down home, and when the income test doesn't apply
In a written reply to Parliament on 14 January 2026, MAS spelled out something many homeowners don't realise: you can take out a loan against the equity in your home and skip the income-based Total Debt Servicing Ratio (TDSR) test entirely, provided your total debt secured by the property, including that new loan, stays at or below 50% of the property's current market value. That single line is the whole game. The more of your mortgage you've paid off, the more room you have under it.
Put plainly: if your home is worth $2 million and you owe nothing on it, you can borrow up to roughly $1 million against it without MAS's income test standing in the way. Owe $400,000 still, and your headroom to that 50% line shrinks to about $600,000. The income test only re-enters the picture once your total secured debt would push past half the home's value. (Source: MAS written reply to Parliament, 14 January 2026. The dollar figures are illustrations of the 50% rule, not MAS figures.)
What the rules actually say about cashing out your home equity
Home equity loans, MAS calls them Mortgage Equity Withdrawal Loans (MEWLs), are governed by the same residential property loan rules as any mortgage, plus a holistic check by your bank. Stripped of jargon, here is what the reply laid out:
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