HELOC Calculator
Calculate your maximum Home Equity Line of Credit limit
%
Your Results
Estimated Maximum HELOC Amount:
$0.00
Total Equity: $0
Maximum Combined Loan-to-Value (CLTV): $0
Please ensure all values are positive and the mortgage balance is less than the home value limit.
Understanding Your HELOC Calculation
A Home Equity Line of Credit (HELOC) is a revolving line of credit that allows you to borrow against the equity in your home. Unlike a traditional home equity loan, a HELOC works more like a credit card, where you can draw funds as needed, pay them back, and draw again during the "draw period."
How the HELOC Amount is Calculated
Lenders use a specific formula to determine how much credit you can access. Most lenders follow these steps:
- Determine Home Value: This is usually confirmed via a professional appraisal.
- Apply LTV Limit: Lenders typically allow you to borrow up to 80% or 90% of your home's total value (Combined Loan-to-Value).
- Subtract Existing Debt: Any existing mortgages or liens must be subtracted from that limit to find the available line of credit.
The Math Formula:
(Home Value × LTV %) - Mortgage Balance = HELOC Limit
Example Calculation
| Metric | Value |
|---|---|
| Home Appraisal | $400,000 |
| Lender LTV Limit (85%) | $340,000 |
| Current Mortgage Balance | $200,000 |
| Available HELOC | $140,000 |
Requirements for Approval
- Equity: Typically, you need at least 15% to 20% equity in your home.
- Credit Score: A score of 620 or higher is usually required, though 700+ gets better rates.
- Debt-to-Income (DTI): Most lenders look for a DTI ratio below 43%.
- Stable Income: Documented proof of earnings to ensure you can cover the interest and principal.