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HELOC (Home Equity Line of Credit) Calculator

Results Summary

Total Max Borrowing Power: $0
Estimated HELOC Limit: $0
Monthly Int-Only Payment (at max limit): $0

function calculateHELOC() { var homeValue = parseFloat(document.getElementById("homeValue").value); var mortgageBalance = parseFloat(document.getElementById("mortgageBalance").value); var ltvLimit = parseFloat(document.getElementById("ltvLimit").value) / 100; var helocRate = parseFloat(document.getElementById("helocRate").value) / 100; var resultsDiv = document.getElementById("helocResults"); var errorMsg = document.getElementById("errorMsg"); if (isNaN(homeValue) || isNaN(mortgageBalance) || isNaN(ltvLimit) || isNaN(helocRate)) { alert("Please enter valid numbers in all fields."); return; } var totalMaxLtvValue = homeValue * ltvLimit; var availableCredit = totalMaxLtvValue – mortgageBalance; resultsDiv.style.display = "block"; errorMsg.style.display = "none"; if (availableCredit <= 0) { document.getElementById("maxBorrow").innerText = "$" + totalMaxLtvValue.toLocaleString(); document.getElementById("helocLimit").innerText = "$0"; document.getElementById("monthlyPayment").innerText = "$0"; errorMsg.innerText = "Notice: Your current mortgage balance exceeds the allowable Loan-to-Value limit."; errorMsg.style.display = "block"; } else { var monthlyIntOnly = (availableCredit * helocRate) / 12; document.getElementById("maxBorrow").innerText = "$" + totalMaxLtvValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById("helocLimit").innerText = "$" + availableCredit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById("monthlyPayment").innerText = "$" + monthlyIntOnly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); } }

How Much Equity Can You Access with a HELOC?

A Home Equity Line of Credit (HELOC) is a powerful financial tool that allows homeowners to borrow against the value of their property. Unlike a standard home equity loan, a HELOC works more like a credit card: you have a limit you can draw from as needed, and you only pay interest on the amount you actually use.

The HELOC Calculation Formula

Lenders typically use a Loan-to-Value (LTV) ratio to determine your borrowing power. For most major banks, the combined LTV (CLTV) limit is usually between 80% and 85%. The math looks like this:

(Home Value × Max LTV %) – Current Mortgage Balance = Your HELOC Limit

Realistic Example

Suppose your home is appraised at $500,000 and your remaining mortgage balance is $300,000. If your lender allows an 80% LTV:

  • Step 1: $500,000 × 0.80 = $400,000 (Maximum total debt allowed)
  • Step 2: $400,000 – $300,000 = $100,000 (Your available HELOC limit)

In this scenario, you could access up to $100,000 for home renovations, debt consolidation, or emergency expenses.

Key Terms to Know

  • Draw Period: The initial phase (usually 10 years) where you can withdraw funds and often make interest-only payments.
  • Repayment Period: The second phase (usually 15-20 years) where you can no longer withdraw money and must pay back both principal and interest.
  • Variable Rate: Most HELOCs have interest rates that fluctuate based on the Prime Rate, meaning your monthly payments can change over time.

Factors That Affect Your Approval

While equity is the most important factor, lenders will also evaluate your Credit Score (usually 680+ for best rates), your Debt-to-Income (DTI) ratio, and your Employment History. If your home value has increased significantly since you purchased it, a HELOC is often the most cost-effective way to tap into that wealth without refinancing your primary low-interest mortgage.

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