HELOC (Home Equity Line of Credit) Calculator
Estimated Home Value ($)
Current Mortgage Balance ($)
Lender's LTV Limit (%)
75%
80% (Standard)
85%
90%
Desired HELOC Amount ($)
Calculate Available Credit
Calculation Summary
Maximum Qualified Loan (CLTV):
Estimated Available HELOC:
Status:
Understanding Your Home Equity Line of Credit (HELOC)
A Home Equity Line of Credit, or HELOC, is a revolving line of credit that allows you to borrow against the equity you've built in your home. Unlike a traditional home equity loan, which provides a lump sum, a HELOC works more like a credit card: you have a maximum limit, and you can draw funds as needed during a specific "draw period."
How Your HELOC Limit is Calculated
Lenders use the Combined Loan-to-Value (CLTV) ratio to determine your borrowing power. Most lenders will limit your total debt (the sum of your primary mortgage and your new HELOC) to 80% or 85% of your home's appraised value.
The Formula:
Example Calculation
Suppose you own a home worth $400,000 and your current mortgage balance is $250,000 . Your lender allows for an 80% CLTV.
1. Calculate Max Debt: $400,000 × 0.80 = $320,000
2. Subtract Mortgage: $320,000 – $250,000 = $70,000
In this scenario, your available HELOC would be $70,000 .
Factors That Impact HELOC Approval
While equity is the primary factor, lenders also evaluate your financial profile before approving a line of credit:
Credit Score: Most lenders require a score of 680 or higher for competitive rates.Debt-to-Income (DTI) Ratio: Lenders prefer a DTI below 43%.Proof of Income: Stable employment history and tax returns are usually required.Home Appraisal: A professional appraisal will be ordered to verify the current market value of your property.
function calculateHELOCLogic() {
// Retrieve values
var homeValue = parseFloat(document.getElementById('homeValue').value);
var mortgageBalance = parseFloat(document.getElementById('mortgageBalance').value);
var cltvLimit = parseFloat(document.getElementById('cltvLimit').value);
var desiredHELOC = parseFloat(document.getElementById('desiredHELOC').value);
// Reset warning
document.getElementById('warningMsg').innerHTML = "";
// Validation
if (isNaN(homeValue) || isNaN(mortgageBalance)) {
alert("Please enter both the Home Value and current Mortgage Balance.");
return;
}
if (homeValue <= 0) {
alert("Home value must be greater than zero.");
return;
}
// Calculations
var maxTotalDebt = homeValue * (cltvLimit / 100);
var availableHELOC = maxTotalDebt – mortgageBalance;
// Ensure we don't show negative availability
if (availableHELOC < 0) {
availableHELOC = 0;
}
// Display Results
document.getElementById('heloc-result-box').style.display = "block";
document.getElementById('maxLoanOutput').innerHTML = "$" + maxTotalDebt.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('availableEquityOutput').innerHTML = "$" + availableHELOC.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Desired amount check logic
var statusDisplay = document.getElementById('statusOutput');
if (isNaN(desiredHELOC) || desiredHELOC <= 0) {
statusDisplay.innerHTML = "Calculated Based on Equity";
statusDisplay.style.color = "#2c3e50";
} else if (desiredHELOC <= availableHELOC) {
statusDisplay.innerHTML = "Highly Likely (Equity Sufficient)";
statusDisplay.style.color = "#27ae60";
} else {
statusDisplay.innerHTML = "Insufficient Equity";
statusDisplay.style.color = "#e74c3c";
document.getElementById('warningMsg').innerHTML = "Note: Your desired amount ($" + desiredHELOC.toLocaleString() + ") exceeds the maximum calculated equity line ($" + availableHELOC.toLocaleString() + ") based on a " + cltvLimit + "% CLTV limit.";
}
}