HELOC (Home Equity Line of Credit) Calculator
Estimate the maximum line of credit you can borrow against your home equity.
Maximum Borrowable (LTV Cap):
Available HELOC Amount:
Remaining Equity after HELOC:
How a HELOC Calculation Works
A Home Equity Line of Credit (HELOC) is a revolving line of credit, similar to a credit card, but it is secured by your home. The amount you can borrow is primarily determined by your Loan-to-Value (LTV) ratio.
Most lenders will allow you to borrow up to 80% or 85% of your home's appraised value, minus what you still owe on your primary mortgage. This calculator uses three key variables to determine your limit:
- Market Value: What your home is currently worth in the open market.
- Current Balance: The total amount remaining on your first mortgage or any other existing liens.
- LTV Limit: The maximum percentage of value the lender is willing to risk (typically 80%).
Realistic Example:
If your home is worth $450,000 and your lender allows an 80% LTV, they will permit a total debt of $360,000 ($450,000 x 0.80). If you still owe $250,000 on your mortgage, your available HELOC limit would be $110,000 ($360,000 – $250,000).
If your home is worth $450,000 and your lender allows an 80% LTV, they will permit a total debt of $360,000 ($450,000 x 0.80). If you still owe $250,000 on your mortgage, your available HELOC limit would be $110,000 ($360,000 – $250,000).
Why Use a HELOC?
Homeowners often use HELOCs for major expenses like home renovations, debt consolidation, or emergency funds because the interest rates are generally lower than unsecured loans or credit cards. However, remember that your home serves as collateral; failure to repay could lead to foreclosure.