HELOC Calculator
Estimate your available Home Equity Line of Credit based on your home's value and existing mortgage.
70%
75%
80% (Standard)
85% (Aggressive)
90% (High-Limit)
Estimated Borrowing Limit
$0.00
Understanding Your HELOC Borrowing Power
A Home Equity Line of Credit (HELOC) functions as a revolving credit source, similar to a credit card, but it uses your home as collateral. This calculator helps you determine your maximum borrowing capacity based on the Combined Loan-to-Value (CLTV) ratio used by most banks.
How the HELOC Calculation Works
Lenders rarely allow you to borrow 100% of your home's value. Instead, they apply a CLTV limit (typically 80%) to the total value of the property. The formula is:
(Home Value × CLTV %) – Current Mortgage Balance = Maximum HELOC Amount
Real-World Example
If your home is worth $500,000 and your bank allows an 80% CLTV, your total borrowing limit across all loans is $400,000. If you still owe $300,000 on your primary mortgage, your maximum HELOC would be $100,000.
Key Factors Influencing Your HELOC
- Appraised Value: Professional appraisals often come in lower than Zillow estimates, which can shrink your borrowing power.
- Credit Score: A score above 740 usually secures the highest CLTV limits and the lowest interest rates.
- Debt-to-Income (DTI): Even if you have equity, lenders won't approve a line of credit if your monthly debt payments exceed roughly 43% of your gross income.
- Draw Period: Most HELOCs have a 10-year "draw period" where you only pay interest, followed by a 20-year repayment period.
Why Choose a HELOC Over a Home Equity Loan?
Unlike a standard Home Equity Loan, which provides a lump sum at a fixed rate, a HELOC allows you to borrow only what you need, when you need it. You only pay interest on the outstanding balance, making it ideal for phased home renovations or as an emergency fund.