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HELOC (Home Equity Line of Credit) Calculator

70% 75% 80% (Standard) 85% 90% Most lenders limit total borrowing to 80-85% of home value.
function calculateHELOC() { var homeValue = parseFloat(document.getElementById('homeValue').value); var mortgageBalance = parseFloat(document.getElementById('mortgageBalance').value); var ltvLimit = parseFloat(document.getElementById('ltvLimit').value); var resultDiv = document.getElementById('helocResult'); if (isNaN(homeValue) || isNaN(mortgageBalance)) { resultDiv.style.display = 'block'; resultDiv.style.backgroundColor = '#f8d7da'; resultDiv.style.color = '#721c24'; resultDiv.innerHTML = 'Error: Please enter valid numbers for home value and mortgage balance.'; return; } var maxBorrowing = homeValue * (ltvLimit / 100); var availableEquity = maxBorrowing – mortgageBalance; resultDiv.style.display = 'block'; resultDiv.style.color = '#155724'; if (availableEquity <= 0) { resultDiv.style.backgroundColor = '#fff3cd'; resultDiv.style.color = '#856404'; resultDiv.innerHTML = '

Available Credit: $0

Based on a ' + ltvLimit + '% LTV limit, you do not currently have enough equity to open a HELOC. Your current mortgage balance exceeds the maximum allowed borrowing amount.'; } else { resultDiv.style.backgroundColor = '#d4edda'; var formattedEquity = availableEquity.toLocaleString('en-US', { style: 'currency', currency: 'USD' }); var formattedMaxTotal = maxBorrowing.toLocaleString('en-US', { style: 'currency', currency: 'USD' }); resultDiv.innerHTML = '

Estimated HELOC Limit: ' + formattedEquity + '

' + '
    ' + '
  • Maximum Total Debt Allowed (' + ltvLimit + '%): ' + formattedMaxTotal + '
    • ' + '
  • Current Mortgage Balance: -' + mortgageBalance.toLocaleString('en-US', { style: 'currency', currency: 'USD' }) + '
    • ' + '
  • Your Potential Credit Line: ' + formattedEquity + '
    • ' + '
'; } }

How Does a HELOC Calculator Work?

A Home Equity Line of Credit (HELOC) is a revolving line of credit that allows homeowners to borrow against the equity they have built in their property. Unlike a standard home equity loan, which provides a lump sum, a HELOC functions more like a credit card with a limit based on your home's value.

The HELOC Formula

Lenders typically use a specific calculation to determine how much you can borrow. This is based on your Loan-to-Value (LTV) ratio. The standard formula is:

(Home Value × Lender's Max LTV %) – Current Mortgage Balance = Max HELOC Amount

Realistic Example

Imagine your home is currently valued at $450,000 and you still owe $250,000 on your primary mortgage. If your lender allows an 80% LTV, the calculation would look like this:

  1. Step 1: $450,000 (Value) × 0.80 (LTV) = $360,000 (Maximum total debt allowed).
  2. Step 2: $360,000 – $250,000 (Current Balance) = $110,000.

In this scenario, you would be eligible for a HELOC of up to $110,000.

Key Factors That Influence Your HELOC Limit

  • Combined Loan-to-Value (CLTV): This is the ratio of all loans on the property (first mortgage + desired HELOC) compared to the home's value. Most lenders prefer a CLTV under 85%.
  • Appraised Value: While you can estimate your home value, the lender will require a professional appraisal to finalize the credit limit.
  • Credit Score: A higher credit score may unlock higher LTV limits (up to 90% in some cases) and lower interest rates.
  • Debt-to-Income (DTI) Ratio: Lenders review your monthly income versus your monthly debt payments to ensure you can handle the potential HELOC payments.

Pros and Cons of a HELOC

Pros Cons
Only pay interest on what you use. Variable interest rates can increase.
Flexibility to borrow and repay repeatedly. Your home is used as collateral.
Lower interest rates than credit cards. Risk of overspending.

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