Estimate your potential HELOC borrowing power based on your home's value and existing mortgage.
Your estimated HELOC limit is: $0
Understanding Your HELOC Potential
A Home Equity Line of Credit (HELOC) is a revolving credit line that you can draw from as needed, similar to a credit card. It uses the equity in your home as collateral. The amount you can borrow is typically based on the difference between your home's current market value and the amount you still owe on your mortgage, up to a certain percentage set by the lender. This calculator helps you estimate your potential borrowing capacity.
How the Calculation Works
The calculation for a HELOC's maximum borrowing limit is straightforward:
Determine Maximum Home Value Allowed for Borrowing: This is calculated by multiplying your home's estimated value by the lender's maximum Loan-to-Value (LTV) ratio.
Maximum Borrowing Value = Estimated Home Value × (Maximum LTV Ratio / 100)
Calculate Available Equity for HELOC: Subtract your outstanding mortgage balance from the maximum borrowing value determined in the previous step.
HELOC Limit = Maximum Borrowing Value - Outstanding Mortgage Balance
Key Terms Explained:
Estimated Home Value: This is your best estimate of what your home is currently worth on the market. Recent appraisals or sales of comparable homes in your area can provide a good basis for this figure.
Outstanding Mortgage Balance: This is the total amount you still owe on your primary mortgage(s).
Maximum Loan-to-Value (LTV) Ratio: This is the percentage of your home's value that a lender is willing to lend against. For example, an 85% LTV means the lender will allow the total of your mortgage and any other home-secured debt (like a HELOC) to be up to 85% of your home's value. Lenders set this ratio based on risk assessment.
Example Scenario:
Let's say:
Your home is valued at $500,000.
You still owe $250,000 on your mortgage.
The lender's maximum LTV ratio is 85%.
Calculation:
Maximum Borrowing Value = $500,000 × (85 / 100) = $425,000
HELOC Limit = $425,000 – $250,000 = $175,000
In this example, your estimated HELOC limit would be $175,000. Remember, this is an estimate. Actual HELOC offers depend on lender approval, creditworthiness, income verification, and other factors.
Disclaimer:
This calculator provides an estimate only and does not constitute a loan offer or guarantee of approval. Interest rates, fees, and specific terms vary by lender and borrower qualifications. Consult with a US Bank representative or other financial advisor for personalized advice.
function calculateHELOC() {
var homeValueInput = document.getElementById("homeValue");
var existingMortgageInput = document.getElementById("existingMortgage");
var maxLTVInput = document.getElementById("maxLTV");
var resultDiv = document.getElementById("result");
// Clear previous error messages
resultDiv.innerHTML = 'Your estimated HELOC limit is: $0';
var homeValue = parseFloat(homeValueInput.value);
var existingMortgage = parseFloat(existingMortgageInput.value);
var maxLTV = parseFloat(maxLTVInput.value);
// Input validation
if (isNaN(homeValue) || homeValue <= 0) {
alert("Please enter a valid estimated home value.");
return;
}
if (isNaN(existingMortgage) || existingMortgage < 0) {
alert("Please enter a valid outstanding mortgage balance.");
return;
}
if (isNaN(maxLTV) || maxLTV 100) {
alert("Please enter a valid Maximum LTV Ratio between 1 and 100.");
return;
}
var maxBorrowingValue = homeValue * (maxLTV / 100);
var helocLimit = maxBorrowingValue – existingMortgage;
// Ensure HELOC limit is not negative
if (helocLimit < 0) {
helocLimit = 0;
}
// Format the result to two decimal places for currency
var formattedHelocLimit = helocLimit.toFixed(2);
resultDiv.innerHTML = 'Your estimated HELOC limit is: $' + formattedHelocLimit.replace(/\B(?=(\d{3})+(?!\d))/g, ",") + '';
}