HELOC Borrowing Power Calculator
Estimate the line of credit you can access based on your home equity.
Estimated Available HELOC Limit:
$0.00
*This is an estimate. Final approval depends on appraisal, debt-to-income ratio, and lender criteria.
How a Home Equity Line of Credit (HELOC) Works
A Home Equity Line of Credit (HELOC) is a revolving line of credit, much like a credit card, that uses your home as collateral. Unlike a traditional Home Equity Loan that provides a lump sum, a HELOC allows you to borrow as needed, pay it back, and borrow again during the "draw period."
Understanding the HELOC Formula
Lenders determine your borrowing power using the Combined Loan-to-Value (CLTV) ratio. Most lenders allow for a CLTV between 80% and 90% of your home's appraised value. The calculation used by this tool is:
(Home Value × Max CLTV %) – Remaining Mortgage Balance = Available HELOC
Example Calculation
If your home is worth $400,000 and your lender allows an 85% CLTV, your total allowable debt is $340,000. If you currently owe $250,000 on your primary mortgage, your estimated HELOC limit would be:
- $400,000 x 0.85 = $340,000 (Maximum Combined Debt)
- $340,000 – $250,000 = $90,000 (Available HELOC)
Factors That Influence Your Approval
- Credit Score: Higher scores (740+) typically secure lower interest rates and higher CLTV limits.
- Debt-to-Income (DTI) Ratio: Lenders prefer a DTI below 43% to ensure you can manage the monthly payments.
- Appraised Value: Your actual limit will be based on a professional appraisal, which may differ from online estimates.
- Income Stability: Proof of consistent income is required to verify repayment ability.