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Home Equity Loan Calculator

Calculate your borrowing power based on your home's value.

70% (Conservative) 75% (Standard) 80% (Most Common) 85% (High LTV) 90% (Specialist) Most lenders limit borrowing to 80% of your home's value.
Total Home Equity:
$0.00
Maximum Estimated Loan Amount:
$0.00

*Subject to credit score and income verification.

How Home Equity Loans Work

A home equity loan allows you to borrow against the value of your property. Your equity is the difference between what your home is worth and what you owe on your mortgage. Lenders typically allow you to borrow up to a specific Loan-to-Value (LTV) ratio, which is usually around 80% of the home's appraised value minus your existing mortgage debt.

Example Calculation

If your home is valued at $500,000 and your current mortgage balance is $300,000:

  • Total Equity: $500,000 – $300,000 = $200,000
  • Max Borrowing (80% LTV): ($500,000 x 0.80) – $300,000 = $100,000

Key Factors Lenders Consider

Beyond the simple math of equity, lenders will look at several factors before approving a home equity loan or a Home Equity Line of Credit (HELOC):

  1. Credit Score: A score of 620 or higher is usually required, with 720+ securing the best rates.
  2. Debt-to-Income (DTI) Ratio: Lenders prefer a DTI below 43%.
  3. Appraisal: A professional appraisal is often required to confirm the home's current market value.
  4. Employment History: Stable income for at least two years is standard.
function calculateEquity() { var homeValue = parseFloat(document.getElementById("homeValue").value); var mortgageBalance = parseFloat(document.getElementById("mortgageBalance").value); var ltvLimit = parseFloat(document.getElementById("ltvLimit").value) / 100; var resultsArea = document.getElementById("resultsArea"); var totalEquityDisplay = document.getElementById("totalEquity"); var maxLoanDisplay = document.getElementById("maxLoan"); if (isNaN(homeValue) || homeValue <= 0) { alert("Please enter a valid home market value."); return; } if (isNaN(mortgageBalance) || mortgageBalance < 0) { mortgageBalance = 0; } // Logic 1: Calculate Total Equity var totalEquity = homeValue – mortgageBalance; // Logic 2: Calculate Max Borrowing based on LTV // Formula: (Market Value * LTV %) – Current Mortgage Balance var maxBorrowing = (homeValue * ltvLimit) – mortgageBalance; // Logic 3: Format results if (maxBorrowing < 0) { maxBorrowing = 0; } var formatter = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD', }); totalEquityDisplay.innerHTML = formatter.format(totalEquity); maxLoanDisplay.innerHTML = formatter.format(maxBorrowing); // Show the hidden results area resultsArea.style.display = "block"; resultsArea.scrollIntoView({ behavior: 'smooth', block: 'nearest' }); }

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