Estimate how much cash you can borrow against your home's current value.
70%
75%
80% (Standard)
85%
90%
Total Home Value:$0
Current Total Debt:$0
LTV Limit Amount:$0
Estimated Borrowing Power:$0
How Your Home Equity Borrowing Power is Calculated
Calculating the amount you can borrow through a home equity loan or Home Equity Line of Credit (HELOC) involves more than just looking at your property value. Lenders typically use a maximum Loan-to-Value (LTV) ratio, which represents the percentage of the home's value they are willing to secure with debt.
The Home Equity Formula
To determine your borrowing capacity, use the following formula:
(Market Value × Max LTV%) – Current Mortgage Balance = Potential Loan Amount
Example Calculation
If your home is worth $500,000 and your lender allows an 80% LTV, they will allow a total debt of $400,000. If you still owe $300,000 on your primary mortgage, your available equity to borrow is:
$500,000 × 0.80 = $400,000
$400,000 – $300,000 = $100,000
Factors That Impact Your Home Equity Loan
While this calculator provides an estimate, several factors will influence a lender's final decision:
Credit Score: Higher scores often unlock higher LTV limits (up to 90%) and lower interest rates.
Debt-to-Income (DTI) Ratio: Lenders evaluate if you have enough monthly income to cover the new loan payment alongside existing debts.
Appraisal: A professional appraisal will be required to verify the actual market value of the property.
Property Type: Primary residences usually qualify for better terms than investment properties or second homes.
function calculateHomeEquity() {
var homeValue = parseFloat(document.getElementById('homeValue').value);
var mortgageBalance = parseFloat(document.getElementById('mortgageBalance').value);
var ltvLimit = parseFloat(document.getElementById('ltvLimit').value);
var otherLiens = parseFloat(document.getElementById('otherLiens').value);
if (isNaN(homeValue) || isNaN(mortgageBalance) || isNaN(otherLiens)) {
alert("Please enter valid numeric values.");
return;
}
var totalCurrentDebt = mortgageBalance + otherLiens;
var maxAllowedDebt = homeValue * ltvLimit;
var borrowPower = maxAllowedDebt – totalCurrentDebt;
// Ensure we don't show negative borrowing power
if (borrowPower < 0) {
borrowPower = 0;
}
// Formatting as Currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
maximumFractionDigits: 0
});
document.getElementById('resHomeValue').innerText = formatter.format(homeValue);
document.getElementById('resTotalDebt').innerText = formatter.format(totalCurrentDebt);
document.getElementById('resLtvAmount').innerText = formatter.format(maxAllowedDebt);
document.getElementById('resBorrowPower').innerText = formatter.format(borrowPower);
document.getElementById('equityResult').style.display = 'block';
// Smooth scroll to result
document.getElementById('equityResult').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}