HELOC (Home Equity Line of Credit) Calculator
Determine how much credit you can access based on your home's value.
Please enter valid positive numbers for all fields.
Maximum Total Debt Allowed:
$0.00
Minus Current Mortgage:
$0.00
Estimated HELOC Limit:
$0.00
Estimated Monthly Interest-Only Payment:
$0.00
How a HELOC Calculator Works
A Home Equity Line of Credit (HELOC) allows you to borrow against the equity in your home. Unlike a standard home equity loan, a HELOC functions more like a credit card where you have a revolving balance. Most lenders allow you to borrow up to 80% or 85% of your home's total value, minus what you still owe on your primary mortgage.
The HELOC Formula
To calculate your available line of credit, lenders typically use the following logic:
(Home Value × Max CLTV %) – Remaining Mortgage Balance = HELOC Limit
Example Calculation:
If your home is worth $500,000 and your lender allows an 85% CLTV, your total allowed debt is $425,000. If you still owe $300,000 on your mortgage, your HELOC limit would be $125,000 ($425,000 – $300,000).
If your home is worth $500,000 and your lender allows an 85% CLTV, your total allowed debt is $425,000. If you still owe $300,000 on your mortgage, your HELOC limit would be $125,000 ($425,000 – $300,000).
Key Factors Affecting Your HELOC
- CLTV Ratio: The Combined Loan-to-Value ratio is the most critical factor. The higher the percentage, the more you can borrow.
- Appraised Value: Lenders will require a professional appraisal to confirm the current market value of your property.
- Credit Score: A higher credit score often unlocks higher CLTV limits and lower interest rates.
- Debt-to-Income (DTI): Lenders want to ensure you have enough income to cover both your primary mortgage and the potential HELOC payments.
Interest-Only vs. Principal Payments
During the "draw period" (typically the first 10 years), many HELOCs only require interest payments on the amount you have actually spent. This keeps initial costs low but means your balance won't decrease unless you choose to pay extra toward the principal. Once the draw period ends, you enter the "repayment period" where you must pay back both principal and interest.