Calculate your borrowing power based on your current home value and mortgage balance.
Most lenders allow up to 80% to 85%.
Please enter valid numeric values for all fields.
Total Home Equity:
Max Allowable Loan Amount (at LTV cap):
Estimated Potential Loan/HELOC:
How a Home Equity Loan Calculator Works
A Home Equity Loan Calculator helps homeowners determine how much cash they can extract from their primary residence. Your "equity" is the difference between what your home is currently worth on the market and what you still owe to your mortgage lender.
The 80% LTV Rule
Most traditional lenders (banks and credit unions) will not let you borrow 100% of your home's value. Instead, they use a Maximum Loan-to-Value (LTV) ratio, typically capped at 80% or 85%. This ensures that even if you take a loan, there is still a 15-20% cushion of equity left in the home to protect the lender if property values drop.
Realistic Example:
Suppose your home is valued at $400,000 and you owe $250,000 on your mortgage.
Appraised Value: Lenders will require a professional appraisal to confirm the current market value.
Credit Score: Higher scores may unlock higher LTV limits (up to 90%) and lower interest rates.
Debt-to-Income (DTI) Ratio: Lenders look at your monthly income versus your monthly debt payments to ensure you can afford the new loan payment.
Difference Between Home Equity Loan and HELOC
A Home Equity Loan is a "second mortgage" that provides a lump sum of cash with a fixed interest rate. A HELOC (Home Equity Line of Credit) functions more like a credit card, where you have a revolving balance and a variable interest rate, allowing you to draw only what you need when you need it.
function calculateEquity() {
var homeValue = parseFloat(document.getElementById("homeValue").value);
var mortgageBalance = parseFloat(document.getElementById("mortgageBalance").value);
var ltvLimit = parseFloat(document.getElementById("ltvLimit").value);
var errorMsg = document.getElementById("calcError");
var resultArea = document.getElementById("result-area");
// Reset error and results
errorMsg.style.display = "none";
resultArea.style.display = "none";
// Validation
if (isNaN(homeValue) || isNaN(mortgageBalance) || isNaN(ltvLimit) || homeValue <= 0) {
errorMsg.style.display = "block";
return;
}
// Calculations
var totalEquity = homeValue – mortgageBalance;
var maxLtvAmount = homeValue * (ltvLimit / 100);
var potentialLoan = maxLtvAmount – mortgageBalance;
// Handle negative borrowing power
if (potentialLoan < 0) {
potentialLoan = 0;
}
// Format as currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 0,
maximumFractionDigits: 0
});
// Display results
document.getElementById("totalEquity").innerText = formatter.format(totalEquity);
document.getElementById("maxLtvAmount").innerText = formatter.format(maxLtvAmount);
document.getElementById("potentialLoan").innerText = formatter.format(potentialLoan);
resultArea.style.display = "block";
}