Mortgage Calculate

70% (Conservative) 75% 80% (Standard) 85% (Aggressive) 90% (Select Lenders Only)

Your Estimated HELOC Limit

Understanding Your HELOC Limit

A Home Equity Line of Credit (HELOC) is a revolving credit line secured by your home. Unlike a traditional home equity loan, which provides a lump sum, a HELOC allows you to borrow as needed up to a certain limit, much like a credit card with lower interest rates.

How the HELOC Formula Works

Lenders don't let you borrow against the full value of your home. They use a metric called Loan-to-Value (LTV) ratio. Most lenders cap the combined loan-to-value (CLTV) at 80% to 85%.

The Formula:
(Home Value × Max LTV%) – Current Mortgage Balance = Available HELOC Limit

Calculation Example

Let's say your home is valued at $400,000 and your current mortgage balance is $200,000. If a lender allows an 80% LTV:

• Step 1: $400,000 × 0.80 = $320,000 (Maximum total debt allowed)
• Step 2: $320,000 – $200,000 (Current debt) = $120,000 HELOC Limit

Factors That Affect Your HELOC Approval

While equity is the most important factor, lenders will also look at:

1. Credit Score: A score of 720+ typically secures the best interest rates.
2. Debt-to-Income (DTI) Ratio: Lenders prefer a DTI below 43%.
3. Appraisal: A professional appraisal will confirm the actual market value of your property.
4. Income Stability: Proof of consistent employment and income.

Pros and Cons of a HELOC

Pros	Cons
Only pay interest on what you use	Variable interest rates can rise
Lower interest rates than credit cards	Your home is used as collateral
Tax-deductible interest (if used for home improvements)	Potential for overspending

function calculateHeloc() { var homeValue = parseFloat(document.getElementById('homeValue').value); var mortgageBalance = parseFloat(document.getElementById('mortgageBalance').value); var ltvPercent = parseFloat(document.getElementById('ltvRatio').value); var resultDiv = document.getElementById('helocResult'); var resultValue = document.getElementById('resultValue'); var resultBreakdown = document.getElementById('resultBreakdown'); if (isNaN(homeValue) || homeValue <= 0) { alert('Please enter a valid home value.'); return; } if (isNaN(mortgageBalance) || mortgageBalance < 0) { mortgageBalance = 0; } var ltvDecimal = ltvPercent / 100; var maxTotalLoan = homeValue * ltvDecimal; var helocLimit = maxTotalLoan – mortgageBalance; if (helocLimit < 0) { helocLimit = 0; } // Formatting var formatter = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD', maximumFractionDigits: 0 }); resultValue.innerText = formatter.format(helocLimit); resultBreakdown.innerText = "Based on " + ltvPercent + "% LTV of " + formatter.format(homeValue) + " minus your " + formatter.format(mortgageBalance) + " mortgage."; resultDiv.style.display = 'block'; // Scroll to result smoothly resultDiv.scrollIntoView({ behavior: 'smooth', block: 'nearest' }); }