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HELOC (Home Equity Line of Credit) Calculator

70% 75% 80% (Standard) 85% 90% Most lenders cap the Combined Loan-to-Value (CLTV) at 80%.
Estimated Maximum HELOC Amount:
function calculateHELOC() { var homeValue = parseFloat(document.getElementById('heloc_homeValue').value); var mortgageBalance = parseFloat(document.getElementById('heloc_mortgageBalance').value); var cltvLimit = parseFloat(document.getElementById('heloc_cltvLimit').value) / 100; var resultArea = document.getElementById('heloc_resultArea'); var finalAmountDiv = document.getElementById('heloc_finalAmount'); var breakdownDiv = document.getElementById('heloc_breakdown'); if (isNaN(homeValue) || isNaN(mortgageBalance) || homeValue <= 0) { alert("Please enter valid numbers for home value and mortgage balance."); return; } // Formula: (Home Value * CLTV Limit) – Current Mortgage Balance var maxTotalLoan = homeValue * cltvLimit; var availableEquity = maxTotalLoan – mortgageBalance; resultArea.style.display = "block"; if (availableEquity <= 0) { resultArea.style.backgroundColor = "#fff5f5"; finalAmountDiv.style.color = "#c53030"; finalAmountDiv.innerText = "$0.00"; breakdownDiv.innerHTML = "Based on the " + (cltvLimit * 100) + "% CLTV limit, your total loan capacity is " + formatCurrency(maxTotalLoan) + ". Since your current mortgage exceeds this amount, you do not currently have enough equity to qualify for a HELOC with these parameters."; } else { resultArea.style.backgroundColor = "#f0fff4"; finalAmountDiv.style.color = "#2c7a7b"; finalAmountDiv.innerText = formatCurrency(availableEquity); breakdownDiv.innerHTML = "Calculation Breakdown:" + "Max Combined Loan (Value x " + (cltvLimit * 100) + "%): " + formatCurrency(maxTotalLoan) + "" + "Minus Existing Mortgage: " + formatCurrency(mortgageBalance) + "" + "Net Credit Line: " + formatCurrency(availableEquity) + ""; } } function formatCurrency(num) { return "$" + num.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); }

Understanding Your Home Equity Line of Credit (HELOC)

A Home Equity Line of Credit (HELOC) is a revolving line of credit that uses your home as collateral. It functions similarly to a credit card, where you are approved for a specific limit and can draw from it as needed, paying back only what you spend plus interest.

How is a HELOC Calculated?

Lenders determine your HELOC limit by looking at your Combined Loan-to-Value (CLTV) ratio. This is the sum of all your home-related debts divided by the market value of your home. Most lenders allow for a maximum CLTV of 80%, though some may go higher depending on your credit score and income.

The math follows this logic:

  • Step 1: Multiply your current home value by the lender's CLTV percentage.
  • Step 2: Subtract your current mortgage balance from that number.
  • Result: The remaining amount is your potential credit line.

HELOC Calculation Example

Let's say your home is currently valued at $450,000 and you still owe $280,000 on your primary mortgage. If your lender allows for an 80% CLTV, here is how they calculate your line of credit:

  1. $450,000 (Value) × 0.80 (CLTV) = $360,000 (Total Allowable Debt)
  2. $360,000 – $280,000 (Current Mortgage) = $80,000 HELOC Limit

Factors That Impact Your HELOC Eligibility

While equity is the primary driver, lenders also evaluate the following before approval:

  • Credit Score: A higher score (typically 720+) usually yields lower interest rates and higher CLTV limits.
  • Debt-to-Income (DTI) Ratio: Lenders want to ensure you have enough monthly income to cover your new HELOC payments alongside existing debts.
  • Home Appraisal: The "home value" used in the calculation must be verified by a professional appraisal or an automated valuation model (AVM).

HELOC vs. Home Equity Loan

While both use your home as collateral, they differ significantly in structure:

Feature HELOC Home Equity Loan
Payout Revolving (as needed) Lump Sum
Interest Rate Variable (usually) Fixed
Repayment Interest-only draw period Immediate P+I payments

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