Interest Rate Money Calculator

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Home Equity & HELOC Calculator

Determine how much cash you can borrow against your home's current value.

70% (Conservative) 75% (Standard) 80% (Common) 85% (Aggressive) 90% (Credit Unions)
Excellent (740+) Good (680-739) Fair (620-679)
Total Home Equity: $0
Max Borrowing Limit: $0

How Your Home Equity Borrowing Power is Calculated

A Home Equity Loan or HELOC (Home Equity Line of Credit) allows you to use the portion of your home that you truly "own" as collateral. Lenders generally do not allow you to borrow 100% of the home's value. Most traditional banks cap the Combined Loan-to-Value (CLTV) ratio at 80% to 85%.

The Formula

(Market Value × Max LTV %) – Current Mortgage Balance = Available Equity to Borrow

Key Factors for Approval

  • Appraised Value: Professional appraisal determines the real-world value of your property.
  • CLTV Ratio: The sum of all loans on the property divided by the value. If you have a $400k home and want an 80% CLTV, the total of your first mortgage and your equity loan cannot exceed $320k.
  • Debt-to-Income (DTI): Lenders verify that your monthly income can support the new loan payment.
  • Credit Score: A score of 740+ typically secures the lowest interest rates and highest LTV limits.

Example Calculation

Suppose your home is worth $500,000 and your current mortgage balance is $300,000. If a lender permits an 85% CLTV ratio:

  1. $500,000 × 0.85 = $425,000 (Maximum total debt allowed)
  2. $425,000 – $300,000 (Existing balance) = $125,000 (Your max borrowing power)
function calculateHomeEquity() { var homeValue = parseFloat(document.getElementById('calc_home_value').value); var mortgageBalance = parseFloat(document.getElementById('calc_mortgage_balance').value); var ltvLimit = parseFloat(document.getElementById('calc_ltv_limit').value); var creditScore = document.getElementById('calc_credit_score').value; var resultsDiv = document.getElementById('equity_results'); var resTotalEquity = document.getElementById('res_total_equity'); var resMaxLoan = document.getElementById('res_max_loan'); var resExplanation = document.getElementById('res_explanation'); if (isNaN(homeValue) || isNaN(mortgageBalance) || homeValue <= 0) { alert("Please enter valid numbers for home value and mortgage balance."); return; } // Basic Logic var totalEquity = homeValue – mortgageBalance; var maxAllowedDebt = homeValue * (ltvLimit / 100); var borrowableAmount = maxAllowedDebt – mortgageBalance; // Handle Negative Equity if (borrowableAmount 0) { resExplanation.innerHTML = "Based on an " + ltvLimit + "% LTV limit, you could potentially access up to " + formatter.format(borrowableAmount) + " through a Home Equity Loan or HELOC." + creditNote; } else if (totalEquity > 0) { resExplanation.innerHTML = "While you have " + formatter.format(totalEquity) + " in equity, your current mortgage balance already exceeds the " + ltvLimit + "% LTV threshold. You may need to pay down your mortgage further before borrowing."; } else { resExplanation.innerHTML = "Your current mortgage balance is higher than your estimated home value. This is known as being 'underwater,' and standard home equity products are likely unavailable."; } resultsDiv.style.display = 'block'; }

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