HELOC Calculator
body {
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max-width: 700px;
margin: 30px auto;
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padding: 30px;
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h1 {
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.input-group input[type="number"],
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Home Equity Line of Credit (HELOC) Calculator
Estimate your potential HELOC borrowing limit based on your home's value and outstanding mortgage.
Your Estimated HELOC Limit:
$0.00
Understanding HELOCs and How This Calculator Works
A Home Equity Line of Credit (HELOC) is a revolving credit line secured by the equity in your home. Think of it like a credit card that uses your home as collateral, offering a flexible way to access funds for various purposes such as home renovations, debt consolidation, education expenses, or emergencies.
Key Concepts:
- Home Equity: This is the difference between your home's current market value and the amount you still owe on your mortgage. For example, if your home is worth $500,000 and you owe $200,000 on your mortgage, you have $300,000 in equity.
- Loan-to-Value (LTV) Ratio: This is a key metric lenders use to assess risk. It's calculated by dividing the total amount of debt secured by your property (your existing mortgage balance plus the HELOC you're requesting) by the property's current market value. Lenders typically set a maximum LTV percentage they are comfortable with.
How the HELOC Calculator Works:
This calculator helps you estimate the maximum HELOC amount you might qualify for based on your home's equity and the lender's LTV requirements.
The calculation involves a few steps:
- Determine Maximum Allowable Loan Amount: The calculator first determines the maximum total debt allowed against your home. This is calculated as:
Maximum Allowable Loan Amount = Current Home Value * (Desired LTV Ratio / 100)
- Calculate Potential HELOC Limit: From the maximum allowable loan amount, the calculator subtracts your remaining mortgage balance to find the potential HELOC limit.
Estimated HELOC Limit = Maximum Allowable Loan Amount - Remaining Mortgage Balance
Example:
If your home is valued at $500,000, your remaining mortgage balance is $200,000, and you aim for an 80% LTV ratio:
- Maximum Allowable Loan Amount = $500,000 * (80 / 100) = $400,000
- Estimated HELOC Limit = $400,000 – $200,000 = $200,000
In this scenario, your estimated HELOC limit would be $200,000.
Important Considerations:
This calculator provides an estimation only. Actual HELOC limits can vary based on:
- Lender-specific LTV requirements
- Your credit score and financial history
- Your income and debt-to-income ratio
- Appraisal results
- Market conditions
It's crucial to consult with lenders to get precise details about your borrowing capacity and the terms of a HELOC.
function calculateHELOC() {
var homeValue = parseFloat(document.getElementById("homeValue").value);
var remainingMortgage = parseFloat(document.getElementById("remainingMortgage").value);
var loanToValueRatio = parseFloat(document.getElementById("loanToValueRatio").value);
var helocLimit = 0;
var resultElement = document.getElementById("helocLimit");
// Input validation
if (isNaN(homeValue) || homeValue <= 0) {
resultElement.textContent = "Invalid Home Value";
resultElement.style.color = "#dc3545";
return;
}
if (isNaN(remainingMortgage) || remainingMortgage < 0) {
resultElement.textContent = "Invalid Mortgage Balance";
resultElement.style.color = "#dc3545";
return;
}
if (isNaN(loanToValueRatio) || loanToValueRatio 100) {
resultElement.textContent = "Invalid LTV Ratio";
resultElement.style.color = "#dc3545";
return;
}
// Calculation
var maxAllowableLoan = homeValue * (loanToValueRatio / 100);
var potentialHELOC = maxAllowableLoan – remainingMortgage;
// Ensure HELOC limit is not negative
if (potentialHELOC < 0) {
potentialHELOC = 0;
}
helocLimit = potentialHELOC;
// Format and display result
resultElement.textContent = "$" + helocLimit.toFixed(2);
resultElement.style.color = "#28a745"; // Success green
}