Calculator for Mortgage

HELOC (Home Equity Line of Credit) Calculator

Estimate your maximum credit line based on your home value.

70% 75% 80% (Standard) 85% 90%

Your Estimated Results

Total Borrowing Power (LTV Limit): $0

Maximum HELOC Amount: $0

*Note: Lenders may also consider your credit score and debt-to-income (DTI) ratio during the actual approval process.

Understanding HELOC: How Your Equity Works for You

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 much like a credit card, where you can withdraw funds as needed up to a specific limit.

How the HELOC Calculation Works

Lenders typically use a Loan-to-Value (LTV) ratio to determine how much you can borrow. Most lenders limit the total debt on a home (your primary mortgage plus the HELOC) to 80% or 85% of the home's appraised value.

The formula used by our calculator is:

(Home Value × LTV %) – Current Mortgage Balance = HELOC Limit

Real-World Example

Let's say your home is currently worth $500,000 and you still owe $300,000 on your mortgage. If a lender allows an 80% LTV:

• Step 1: Calculate the total borrowing limit: $500,000 × 0.80 = $400,000.
• Step 2: Subtract existing debt: $400,000 – $300,000 = $100,000.
• Result: Your maximum HELOC limit would be $100,000.

Factors That Impact Your Approval

While equity is the primary factor, lenders also look at:

• Credit Score: A score above 700 usually yields the best interest rates.
• Debt-to-Income (DTI) Ratio: Lenders prefer a DTI below 43%.
• Income Stability: Proof of consistent employment and income.
• Appraisal: A professional appraisal will be required to confirm the home's market value.

function calculateHELOC() { var homeValue = parseFloat(document.getElementById('homeValue').value); var mortgageBalance = parseFloat(document.getElementById('mortgageBalance').value); var ltvLimitPercent = parseFloat(document.getElementById('ltvLimit').value); if (isNaN(homeValue) || homeValue <= 0) { alert("Please enter a valid home value."); return; } if (isNaN(mortgageBalance)) { mortgageBalance = 0; } var ltvDecimal = ltvLimitPercent / 100; var maxBorrowingPower = homeValue * ltvDecimal; var helocLimit = maxBorrowingPower – mortgageBalance; // Handle cases where mortgage exceeds LTV limit if (helocLimit < 0) { helocLimit = 0; } // Update UI document.getElementById('maxBorrowingPower').innerText = formatCurrency(maxBorrowingPower); document.getElementById('maxHELOC').innerText = formatCurrency(helocLimit); document.getElementById('resultArea').style.display = 'block'; } function formatCurrency(amount) { return '$' + amount.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 }); }