HELOC (Home Equity Line of Credit) Calculator
70%
75%
80% (Standard)
85%
90%
Most lenders allow up to 80-85% Loan-to-Value (LTV).
Your Estimated HELOC Limit
How Does a HELOC Work?
A Home Equity Line of Credit (HELOC) is a revolving line of credit that allows homeowners to borrow against the equity they have built in their property. Think of it like a credit card where your house acts as the collateral. You can borrow, repay, and borrow again during a set period known as the "draw period."
The HELOC Calculation Formula
Lenders typically use a maximum Loan-to-Value (LTV) ratio to determine how much you can borrow. The standard calculation used by this tool is:
(Home Value × Maximum LTV %) – Current Mortgage Balance = Available HELOC
Real-World Example
Imagine your home is currently worth $450,000 and you still owe $250,000 on your primary mortgage. If your lender allows for an 80% LTV:
- 80% of $450,000 is $360,000 (This is the total combined debt allowed).
- Subtract your existing mortgage: $360,000 – $250,000.
- Your maximum HELOC limit would be $110,000.
Key Factors That Influence Your HELOC
- Credit Score: A higher score often unlocks higher LTV limits and lower interest rates.
- Debt-to-Income (DTI) Ratio: Lenders look at your monthly income versus your debt obligations to ensure you can handle the payments.
- Appraised Value: While online estimates are helpful, a lender will require a professional appraisal to confirm your home's worth.