How to Calculate Equilibrium Interest Rate Macroeconomics
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HELOC (Home Equity Line of Credit) Calculator
75% (Conservative)
80% (Standard)
85% (Common)
90% (Aggressive)
Most lenders allow between 80% and 85% combined loan-to-value.
Your Estimated HELOC Limit
$0.00
How a HELOC Calculation Works
A Home Equity Line of Credit (HELOC) is a revolving line of credit that allows you to borrow against the equity in your home. Determining your limit involves three primary factors: your home's current market value, your existing mortgage balance, and the lender's Combined Loan-to-Value (CLTV) limit.
The HELOC Formula
HELOC Limit = (Home Value × Max CLTV %) – Mortgage Balance
Example Calculation
Let's say your home is worth $400,000 and you currently owe $250,000 on your mortgage. If your lender allows an 80% CLTV:
Step 1: Calculate the maximum total debt allowed ($400,000 × 0.80 = $320,000).
Step 2: Subtract your current debt ($320,000 – $250,000 = $70,000).
Result: Your maximum HELOC limit would be $70,000.
Key Factors That Influence Your HELOC
Appraised Value: Professional lenders will require a fresh appraisal, which might differ from online estimates.
Credit Score: High credit scores (720+) typically unlock higher LTV percentages and lower interest rates.
Debt-to-Income (DTI) Ratio: Lenders evaluate your ability to repay by comparing your monthly debt obligations to your gross income.
Interest Rates: Most HELOCs have variable rates based on the Prime Rate plus a margin.
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');
var resultValue = document.getElementById('resultValue');
var summaryText = document.getElementById('summaryText');
if (isNaN(homeValue) || isNaN(mortgageBalance)) {
alert("Please enter valid numbers for home value and mortgage balance.");
return;
}
if (mortgageBalance > homeValue) {
alert("Your mortgage balance cannot exceed your home value for this calculation.");
return;
}
// Calculate maximum total debt allowed
var ltvDecimal = ltvLimit / 100;
var maxTotalDebt = homeValue * ltvDecimal;
// Calculate HELOC Limit
var helocLimit = maxTotalDebt – mortgageBalance;
resultDiv.style.display = 'block';
if (helocLimit <= 0) {
resultValue.innerHTML = "$0.00";
resultValue.style.color = "#e53e3e";
summaryText.innerHTML = "Based on your current mortgage balance and a " + ltvLimit + "% LTV limit, you do not currently have enough equity to open a HELOC. Most lenders require your total debt to be significantly lower than the market value.";
} else {
resultValue.innerHTML = "$" + helocLimit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultValue.style.color = "#2b6cb0";
var totalEquity = homeValue – mortgageBalance;
summaryText.innerHTML = "Calculation Breakdown:" +
"- Your total home equity is currently $" + totalEquity.toLocaleString() + "." +
"- At a " + ltvLimit + "% LTV limit, the lender allows a total debt of $" + maxTotalDebt.toLocaleString() + "." +
"- After subtracting your existing mortgage of $" + mortgageBalance.toLocaleString() + ", you have $" + helocLimit.toLocaleString() + " available as a credit line.";
}
// Scroll to result smoothly
resultDiv.scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}