A Home Equity Line of Credit (HELOC) is a revolving line of credit that uses your home as collateral. Unlike a standard home equity loan, which provides a lump sum, a HELOC works more like a credit card with a limit based on your home's value.
Understanding the Calculation
Lenders typically use a Combined Loan-to-Value (CLTV) ratio to determine how much you can borrow. The formula used in this calculator is:
Step 1: Home Value × Max CLTV % = Total Allowed Debt
Step 2: Total Allowed Debt – Current Mortgage Balance = Available HELOC Limit
The Draw Period: Usually 5 to 10 years. During this time, you can withdraw funds as needed and typically only owe interest payments on what you've used.
The Repayment Period: Usually 10 to 20 years. You can no longer borrow money, and you must pay back both the principal and interest, which significantly increases the monthly payment.
Example Scenario
If your home is worth $400,000 and your lender allows an 80% CLTV, your total allowed debt is $320,000. If you still owe $250,000 on your mortgage, your HELOC limit would be $70,000 ($320k – $250k). If you draw $20,000 at an 8% interest rate, your monthly interest payment would be roughly $133.33.
function calculateHeloc() {
// Get Input Values
var homeValue = parseFloat(document.getElementById('heloc_home_value').value);
var mortgageBalance = parseFloat(document.getElementById('heloc_mortgage_balance').value);
var cltvLimit = parseFloat(document.getElementById('heloc_cltv').value);
var rate = parseFloat(document.getElementById('heloc_rate').value);
var drawAmount = parseFloat(document.getElementById('heloc_draw_amount').value);
var warningDiv = document.getElementById('heloc_warning');
var resultsDiv = document.getElementById('heloc_results');
warningDiv.style.display = 'none';
warningDiv.innerHTML = ";
// Validation
if (isNaN(homeValue) || isNaN(mortgageBalance) || isNaN(cltvLimit) || isNaN(rate)) {
alert("Please enter valid numbers for all fields.");
return;
}
// Calculation Logic
var totalAllowedDebt = homeValue * (cltvLimit / 100);
var maxLine = totalAllowedDebt – mortgageBalance;
var equity = homeValue – mortgageBalance;
// Adjust for negative line (if mortgage exceeds CLTV limit)
if (maxLine 0) {
if (drawAmount > maxLine) {
warningDiv.style.display = 'block';
warningDiv.innerHTML = 'Note: Your planned draw amount exceeds your calculated maximum credit line. Calculation based on your requested draw amount.';
}
interestPayment = (drawAmount * (rate / 100)) / 12;
}
// Formatting currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
// Output Results
document.getElementById('res_max_line').innerText = formatter.format(maxLine);
document.getElementById('res_equity').innerText = formatter.format(equity);
document.getElementById('res_interest_payment').innerText = formatter.format(interestPayment);
// Show results
resultsDiv.style.display = 'block';
}