Home Equity Line of Credit Calculator

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HELOC Borrowing Limit Calculator

Most lenders limit total debt to 80% – 90% of your home's value.

Estimated HELOC Limit: $0.00

Max Total Combined Debt Allowed:

Current Equity Percentage:

function calculateHELOC() { var homeValue = parseFloat(document.getElementById('homeValue').value); var mortgageBalance = parseFloat(document.getElementById('mortgageBalance').value); var cltvLimit = parseFloat(document.getElementById('cltvLimit').value); var resultArea = document.getElementById('resultArea'); var maxHelocDisplay = document.getElementById('maxHelocDisplay'); var maxTotalLoanDisplay = document.getElementById('maxTotalLoanDisplay'); var equityPercentDisplay = document.getElementById('equityPercentDisplay'); var warningText = document.getElementById('warningText'); if (isNaN(homeValue) || isNaN(mortgageBalance) || isNaN(cltvLimit)) { alert("Please enter valid numerical values for all fields."); return; } var maxTotalLoan = homeValue * (cltvLimit / 100); var availableHeloc = maxTotalLoan – mortgageBalance; var currentEquity = ((homeValue – mortgageBalance) / homeValue) * 100; resultArea.style.display = "block"; maxTotalLoanDisplay.innerHTML = "$" + maxTotalLoan.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); equityPercentDisplay.innerHTML = currentEquity.toFixed(2) + "%"; if (availableHeloc <= 0) { maxHelocDisplay.innerHTML = "$0.00"; maxHelocDisplay.style.color = "#d32f2f"; warningText.innerHTML = "Based on your current balance and the lender's CLTV limit, you do not have enough equity to qualify for a HELOC."; warningText.style.display = "block"; } else { maxHelocDisplay.innerHTML = "$" + availableHeloc.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); maxHelocDisplay.style.color = "#2e7d32"; warningText.style.display = "none"; } }

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 traditional home equity loan, a HELOC works more like a credit card where you can borrow, repay, and borrow again during the "draw period."

The HELOC Calculation Formula

Lenders use a specific formula to determine how much credit they can extend to you. The key metric is the Combined Loan-to-Value (CLTV) Ratio. The math follows this sequence:

  • Determine Home Value: Lenders usually require an appraisal.
  • Apply CLTV Limit: If a lender allows an 80% CLTV, they will calculate 80% of your home's current market value.
  • Subtract Debt: They subtract your existing mortgage balance from that 80% figure.
  • The Remainder: The remaining amount is your maximum HELOC limit.

A Real-World Example

Imagine you own a home valued at $500,000. You currently owe $300,000 on your primary mortgage. Your lender offers a HELOC with an 85% CLTV limit.

1. $500,000 (Home Value) x 0.85 (CLTV Limit) = $425,000 (Max Total Debt)
2. $425,000 – $300,000 (Current Mortgage) = $125,000
Total Available HELOC: $125,000

Factors That Influence Your HELOC Limit

While the calculation above provides a mathematical maximum, lenders also look at other qualifying factors:

  • Credit Score: Higher scores often unlock higher CLTV limits (up to 90% in some cases) and lower interest rates.
  • Debt-to-Income (DTI) Ratio: Lenders want to ensure you have enough monthly income to cover the potential new HELOC payment along with your existing debts.
  • Property Type: Primary residences typically allow for higher borrowing limits compared to investment properties or second homes.

HELOC vs. Home Equity Loan

While both use your home as collateral, they differ in structure:

Feature HELOC Home Equity Loan
Payout Revolving (as needed) Lump Sum
Interest Rate Usually Variable Usually Fixed
Payments Based on balance used Fixed monthly installments

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