Note: Your mortgage balance exceeds the allowable lending limit for a HELOC at this time.
How a HELOC Calculation Works
A Home Equity Line of Credit (HELOC) is a revolving line of credit secured by your home. To determine how much you can borrow, lenders look at your Combined Loan-to-Value (CLTV) ratio. This ratio compares the total of all loans on your home (including the new HELOC) against the current market value of the property.
The standard formula used in this calculator is:
(Home Value × CLTV Limit) – Current Mortgage Balance = HELOC Limit
Example HELOC Calculation
Imagine your home is worth $400,000 and your lender allows an 80% CLTV limit. You currently owe $250,000 on your primary mortgage.
Step 1: Calculate maximum total debt: $400,000 × 0.80 = $320,000.
Higher scores may qualify for higher CLTV limits (up to 90%).
Appraised Value
A professional appraisal may differ from your estimate, changing the math.
Debt-to-Income (DTI)
Lenders restrict your limit if your monthly payments exceed 43-50% of income.
Property Type
Primary residences usually get higher limits than investment properties.
Why Use a HELOC?
HELOCs are popular for home renovations, debt consolidation, or emergency funds because they typically offer lower interest rates than credit cards or personal loans. However, because your home is collateral, it is vital to calculate your borrowing power accurately to ensure you don't over-leverage your property.
function calculateHELOC() {
var homeValue = parseFloat(document.getElementById('homeValue').value);
var cltvLimit = parseFloat(document.getElementById('cltvLimit').value);
var mortgageBalance = parseFloat(document.getElementById('mortgageBalance').value);
var resultDiv = document.getElementById('helocResult');
var totalDebtSpan = document.getElementById('totalDebtAllowed');
var finalLimitDiv = document.getElementById('finalLimit');
var warningMsg = document.getElementById('negativeEquityMsg');
if (isNaN(homeValue) || isNaN(cltvLimit) || isNaN(mortgageBalance)) {
alert("Please enter valid numeric values for all fields.");
return;
}
// Step 1: Calculate max debt allowed based on CLTV
var maxTotalDebt = homeValue * (cltvLimit / 100);
// Step 2: Subtract current mortgage
var availableCredit = maxTotalDebt – mortgageBalance;
// Formatting currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
maximumFractionDigits: 0
});
resultDiv.style.display = 'block';
totalDebtSpan.innerText = formatter.format(maxTotalDebt);
if (availableCredit < 0) {
finalLimitDiv.innerText = formatter.format(0);
finalLimitDiv.style.color = "#dc3545";
warningMsg.style.display = "block";
} else {
finalLimitDiv.innerText = formatter.format(availableCredit);
finalLimitDiv.style.color = "#28a745";
warningMsg.style.display = "none";
}
// Scroll to result smoothly
resultDiv.scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}