*Interest-only payments apply during the draw period. Principal repayment will increase this amount later.
Understanding Your HELOC Calculation
A Home Equity Line of Credit (HELOC) is a flexible revolving credit line secured by your home. Unlike a standard home equity loan, you only pay interest on the amount you actually draw, similar to a credit card but with typically lower interest rates.
How the Credit Limit is Determined
Lenders use your Loan-to-Value (LTV) ratio to determine how much you can borrow. Most lenders cap the total debt (your primary mortgage + your HELOC) at 80% to 85% of your home's current appraised value. The formula used in this calculator is:
(Home Value × Max LTV %) – Existing Mortgage = Max HELOC Limit
HELOC Payment Structure
Most HELOCs consist of two phases:
Draw Period: Usually the first 10 years. You can withdraw funds and often have the option to make interest-only payments.
Repayment Period: Usually the following 10–20 years. You can no longer withdraw money, and you must pay back both principal and interest.
Realistic Example
If your home is worth $500,000 and you owe $300,000 on your mortgage, an 80% LTV limit allows for $400,000 in total debt. Subtracting your $300,000 mortgage leaves you with a $100,000 HELOC limit.
If you draw $20,000 at an 8% interest rate, your monthly interest-only payment would be approximately $133.33.
function calculateHELOC() {
var homeValue = parseFloat(document.getElementById('homeValue').value);
var mortgageBalance = parseFloat(document.getElementById('mortgageBalance').value) || 0;
var ltvRatio = parseFloat(document.getElementById('ltvRatio').value) / 100;
var interestRate = parseFloat(document.getElementById('interestRate').value) / 100;
var amountDrawn = parseFloat(document.getElementById('amountDrawn').value) || 0;
if (isNaN(homeValue) || homeValue <= 0) {
alert("Please enter a valid home value.");
return;
}
if (isNaN(ltvRatio) || ltvRatio <= 0) {
alert("Please enter a valid LTV ratio.");
return;
}
// Calculation Logic
var totalAllowedDebt = homeValue * ltvRatio;
var maxHELOCLimit = totalAllowedDebt – mortgageBalance;
// Ensure limit isn't negative
if (maxHELOCLimit 0) {
monthlyInterestOnly = (amountDrawn * interestRate) / 12;
}
var remainingEquity = maxHELOCLimit – amountDrawn;
if (remainingEquity < 0) remainingEquity = 0;
// Display Logic
document.getElementById('resultsArea').style.display = 'block';
document.getElementById('maxLineDisplay').innerText = formatCurrency(maxHELOCLimit);
document.getElementById('remainingEquityDisplay').innerText = formatCurrency(remainingEquity);
document.getElementById('monthlyPaymentDisplay').innerText = formatCurrency(monthlyInterestOnly);
// Smooth scroll to results
document.getElementById('resultsArea').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}
function formatCurrency(value) {
return '$' + value.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
}