HELOC (Home Equity Line of Credit) Calculator
Calculate your borrowing power based on your home's current value and your existing mortgage balance.
Calculation Results
How Much HELOC Can You Qualify For?
A Home Equity Line of Credit (HELOC) is a revolving line of credit that allows you to borrow against the equity in your home. Determining your maximum credit limit depends primarily on three factors: your home's current market value, your existing mortgage debt, and the lender's combined loan-to-value (CLTV) limit.
Understanding the HELOC Formula
Lenders typically allow homeowners to borrow up to 80% or 90% of their home's value, including the primary mortgage. The basic math used by this calculator is:
Example Calculation
If your home is worth $400,000 and your lender has an 85% LTV limit, they will allow a total debt of $340,000 ($400,000 × 0.85). If you currently owe $250,000 on your mortgage, your maximum HELOC would be $90,000 ($340,000 − $250,000).
Key Factors That Impact Your HELOC
- Home Appraisal: Lenders will require a professional appraisal to confirm your home's current market value.
- Credit Score: A higher credit score often unlocks higher LTV limits (up to 90%) and lower interest rates.
- Debt-to-Income (DTI) Ratio: Even if you have equity, lenders must verify that you have enough income to cover potential monthly payments.
Draw Period vs. Repayment Period
Most HELOCs have a 10-year draw period where you can borrow money and pay only interest. After that, you enter the repayment period (usually 20 years), during which you must pay back both principal and interest. Since rates are typically variable, it is important to budget for potential rate increases.