HELOC Calculator
Calculate your maximum Home Equity Line of Credit borrowing power.
Estimated HELOC Limit
Insufficient Equity
Based on the values provided, your current mortgage balance exceeds the lender's LTV limit. You may not currently qualify for a HELOC.
Understanding Your HELOC Borrowing Power
A Home Equity Line of Credit (HELOC) is a revolving line of credit that allows homeowners to borrow against the equity they have built in their property. Unlike a standard home equity loan, a HELOC works more like a credit card: you have a maximum limit, and you can draw funds as needed during the "draw period."
How is a HELOC Limit Calculated?
Lenders determine your credit limit using three primary factors: the current market value of your home, your existing mortgage balance, and their Combined Loan-to-Value (CLTV) ratio limit.
- Home Value: The current appraised price of your property.
- LTV Ratio: Most lenders will allow you to borrow up to 80% or 85% of your home's total value, including all existing liens.
- Existing Debt: You must subtract your current mortgage balance from the maximum allowed LTV to find your available credit.
Calculation Example
If your home is worth $500,000 and your lender allows an 80% LTV, your total borrowing ceiling is $400,000 ($500,000 x 0.80). If you still owe $300,000 on your primary mortgage, your maximum HELOC limit would be:
$400,000 (Max Loan) – $300,000 (Balance) = $100,000 HELOC Limit
Why Use a HELOC?
HELOCs are popular for large, unpredictable expenses such as home renovations, debt consolidation, or emergency funds. Because the interest rates are typically lower than personal loans or credit cards, and you only pay interest on the amount you actually use, it is a highly flexible financial tool for homeowners.