HELOC Limit Calculator
Estimate how much equity you can access from your home.
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Lenders usually allow 80% to 90% of your home's value.
Estimated Maximum HELOC Amount:
$0.00
What is a HELOC?
A Home Equity Line of Credit (HELOC) is a revolving line of credit, similar to a credit card, that uses your home as collateral. Unlike a standard home equity loan, which provides a lump sum, a HELOC allows you to borrow as much or as little as you need up to a pre-approved limit during a set "draw period."
How is the HELOC Limit Calculated?
Lenders determine your credit limit based on several factors, but the primary metric is the Combined Loan-to-Value (CLTV) ratio. This is the total of all loans on the property (your current mortgage plus the requested HELOC) divided by the home's appraised value.
The formula used by this calculator is:
(Home Value × Max CLTV %) – Current Mortgage Balance = Available HELOC
Realistic Example:
Suppose your home is worth $500,000 and you owe $300,000 on your mortgage. If your lender allows a CLTV of 85%:
1. 85% of $500,000 = $425,000 (Total debt allowed)
2. $425,000 – $300,000 = $125,000 (Your HELOC Limit)
Suppose your home is worth $500,000 and you owe $300,000 on your mortgage. If your lender allows a CLTV of 85%:
1. 85% of $500,000 = $425,000 (Total debt allowed)
2. $425,000 – $300,000 = $125,000 (Your HELOC Limit)
Key Factors Lenders Consider
- Credit Score: Higher scores usually unlock higher CLTV limits and lower interest rates.
- Debt-to-Income (DTI) Ratio: Lenders want to ensure you have enough income to cover all monthly payments.
- Appraisal: A professional appraisal will be required to confirm the current market value of your home.