Bank of America Home Equity Line of Credit Estimator
Determine your potential credit line based on your home's current market value and existing liens.
Estimated Results
Your estimated Maximum Borrowing Limit:
Total Home Equity:
Estimated Available Line of Credit:
*Disclaimer: This is an estimate based on common banking standards. Actual approval depends on credit score, income verification, and appraisal.
Understanding Your HELOC Potential
A Home Equity Line of Credit (HELOC) functions similarly to a credit card but is secured by the equity in your home. Bank of America and other major lenders typically allow homeowners to borrow up to a specific percentage of their home's value, minus any outstanding mortgage balances. This percentage is known as the Loan-to-Value (LTV) ratio.
How the Calculation Works
The math behind a HELOC estimation follows a specific formulaic approach to risk management:
- Step 1: Calculate the Maximum Allowed Debt (Home Value × LTV Ratio).
- Step 2: Subtract your existing mortgage balance from that number.
- Step 3: The remainder is your potential line of credit.
Real-World Example
If your home is valued at 500,000 and your current mortgage balance is 300,000:
| Metric | Calculation | Result |
|---|---|---|
| Max Debt (85% LTV) | 500,000 × 0.85 | 425,000 |
| Current Debt | Current Mortgage | 300,000 |
| Available HELOC | 425,000 – 300,000 | 125,000 |
Requirements for Approval
While equity is the primary driver, lenders like Bank of America also evaluate your credit history, debt-to-income (DTI) ratio, and property type. Most high-limit lines of credit require a credit score of 720 or higher, though options exist for scores above 660. The "draw period" typically lasts 10 years, followed by a 20-year "repayment period."
Why Use a HELOC?
Unlike a standard home equity loan, a HELOC allows you to borrow only what you need, when you need it. This makes it an ideal financial tool for home renovations, consolidating high-interest debt, or acting as an emergency fund for major life events.