Estimate how much cash you can borrow against your home's value.
Available Equity (Total):$0.00
Maximum Borrowing Limit (at CLTV):$0.00
Estimated Monthly Payment:$0.00
How to Calculate Your Home Equity
Home equity is the difference between your home's current market value and the remaining balance on your mortgage. As you pay down your principal and as home values in your area increase, your equity grows. A Home Equity Loan (often called a second mortgage) allows you to borrow against that value in a lump sum.
Understanding CLTV (Combined Loan-to-Value)
Lenders rarely let you borrow 100% of your home's value. Most lenders use a Combined Loan-to-Value (CLTV) ratio, typically capped at 80% or 85%. This means the sum of your current mortgage and your new equity loan cannot exceed that percentage of your home's appraised value.
Real-Life Example
Imagine your home is worth $500,000 and you owe $300,000. If a lender allows an 80% CLTV:
Total allowable debt: $500,000 x 0.80 = $400,000
Subtract current mortgage: $400,000 – $300,000 = $100,000
Maximum Equity Loan: $100,000
Why Use a Home Equity Loan?
Home equity loans typically offer lower interest rates than personal loans or credit cards because they are secured by your property. Common uses include home renovations, debt consolidation, or major expenses like education or medical bills. However, keep in mind that your home serves as collateral; failure to repay the loan could result in foreclosure.
function calculateHomeEquity() {
var homeValue = parseFloat(document.getElementById("homeValue").value);
var mortgageBalance = parseFloat(document.getElementById("mortgageBalance").value);
var cltvLimit = parseFloat(document.getElementById("cltvLimit").value) / 100;
var annualRate = parseFloat(document.getElementById("interestRate").value) / 100;
var years = parseInt(document.getElementById("loanTerm").value);
if (isNaN(homeValue) || isNaN(mortgageBalance) || isNaN(cltvLimit) || isNaN(annualRate) || isNaN(years)) {
alert("Please enter valid numeric values in all fields.");
return;
}
// Calculate Available Equity (Current Market Value – Current Mortgage)
var rawEquity = homeValue – mortgageBalance;
// Calculate Max Loan Amount based on CLTV
// (Home Value * CLTV %) – Mortgage Balance
var maxLoan = (homeValue * cltvLimit) – mortgageBalance;
if (maxLoan 0) {
if (monthlyRate === 0) {
monthlyPayment = maxLoan / numberOfPayments;
} else {
var x = Math.pow(1 + monthlyRate, numberOfPayments);
monthlyPayment = (maxLoan * monthlyRate * x) / (x – 1);
}
}
// Format results
document.getElementById("totalEquity").innerHTML = "$" + rawEquity.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("maxLoanAmount").innerHTML = "$" + maxLoan.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("monthlyPayment").innerHTML = "$" + monthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Show result box
document.getElementById("result-box").style.display = "block";
}