HELOC Borrowing Power Calculator
Estimate how much equity you can access from your home.
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Most lenders allow up to 80% or 85% Loan-to-Value.
Please enter valid numeric values for all fields.
Estimated HELOC Limit
$0.00
Your Total Combined Loan-to-Value (CLTV) will be 0%.
Understanding Your HELOC Limit
A Home Equity Line of Credit (HELOC) is a revolving line of credit that allows you to borrow against the equity in your home. Unlike a standard home equity loan, a HELOC works more like a credit card where you can draw funds, pay them back, and draw them again during the "draw period."
How is a HELOC Calculated?
Lenders determine your maximum credit line based on the Combined Loan-to-Value (CLTV) ratio. The standard formula used in this calculator is:
(Home Value × Max LTV %) – Current Mortgage Balance = HELOC Limit
Example Calculation
Imagine your home is worth $400,000 and your lender allows an 80% LTV. Your current mortgage balance is $250,000.
- Step 1: $400,000 × 0.80 = $320,000 (Maximum total debt allowed)
- Step 2: $320,000 – $250,000 = $70,000
- Your HELOC Limit: $70,000
Factors That Influence Your HELOC Approval
- Credit Score: Most lenders require a score of 680 or higher for the best rates and higher LTV limits.
- Debt-to-Income (DTI) Ratio: Lenders typically want to see a DTI below 43%.
- Appraised Value: While you can estimate your value, the lender will require a professional appraisal to finalize the numbers.
- Existing Liens: Any other debts secured by your home must be subtracted from the maximum allowed value.
Why Use a HELOC?
Homeowners frequently use HELOCs for home renovations, debt consolidation, or emergency funds. Because the debt is secured by your home, the interest rates are generally much lower than credit cards or personal loans. However, remember that your home serves as collateral, so timely payments are essential.