Use this calculator to estimate your potential Home Equity Line of Credit (HELOC) eligibility and approximate monthly interest-only payments during the draw period. This tool helps you understand how your home's value, existing mortgage, and lender's combined loan-to-value (CLTV) limits affect the amount you might qualify for.
Understanding Your HELOC Estimate
A Home Equity Line of Credit (HELOC) allows you to borrow against the equity in your home. Unlike a traditional loan, a HELOC is a revolving line of credit, similar to a credit card, but secured by your home. You can draw funds as needed, up to a certain limit, during a "draw period." During this period, payments are often interest-only.
Key Factors in HELOC Eligibility:
Current Home Market Value: This is the estimated value of your home in today's market. A higher value generally means more available equity.
Outstanding Mortgage Balance: The remaining amount you owe on your primary mortgage. This reduces the equity available for a HELOC.
Maximum Combined Loan-to-Value (CLTV): Lenders set a maximum percentage of your home's value that can be encumbered by all loans, including your primary mortgage and the new HELOC. For example, an 85% CLTV on a $500,000 home means total debt (mortgage + HELOC) cannot exceed $425,000.
HELOC Annual Rate: This is the variable interest rate applied to the outstanding balance of your HELOC. Payments during the draw period are typically calculated based on this rate.
Desired HELOC Amount: The amount of credit you wish to access. The calculator will determine if this amount is feasible based on your home's equity and the lender's CLTV limits.
How the Calculator Works:
The calculator first determines your maximum eligible HELOC amount by subtracting your outstanding mortgage balance from the maximum allowable total debt (Home Value * Max CLTV). It then compares this maximum to your desired HELOC amount. If your desired amount is higher than the maximum eligible, the calculator will use the maximum eligible amount for payment calculations.
The estimated monthly payment shown is an interest-only payment during the draw period. This means you are only paying the interest accrued on the amount you've drawn, not reducing the principal balance. After the draw period, the HELOC typically enters a repayment period where you'll make principal and interest payments.
Remember, this is an estimate. Actual HELOC terms, rates, and eligibility can vary based on your credit score, lender policies, and other financial factors. Always consult with a financial advisor or lender for personalized advice.
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function calculateHeloc() {
var homeValue = parseFloat(document.getElementById('homeValue').value);
var existingMortgage = parseFloat(document.getElementById('existingMortgage').value);
var maxCltv = parseFloat(document.getElementById('maxCltv').value);
var helocRate = parseFloat(document.getElementById('helocRate').value);
var desiredHeloc = parseFloat(document.getElementById('desiredHeloc').value);
var resultsDiv = document.getElementById('helcResults');
resultsDiv.innerHTML = "; // Clear previous results
// Input validation
if (isNaN(homeValue) || homeValue <= 0) {
resultsDiv.innerHTML = 'Please enter a valid Current Home Market Value.';
return;
}
if (isNaN(existingMortgage) || existingMortgage < 0) {
resultsDiv.innerHTML = 'Please enter a valid Outstanding Mortgage Balance.';
return;
}
if (isNaN(maxCltv) || maxCltv 100) {
resultsDiv.innerHTML = 'Please enter a valid Maximum Combined Loan-to-Value (1-100%).';
return;
}
if (isNaN(helocRate) || helocRate < 0) {
resultsDiv.innerHTML = 'Please enter a valid HELOC Annual Rate.';
return;
}
if (isNaN(desiredHeloc) || desiredHeloc = homeValue) {
resultsDiv.innerHTML = 'Outstanding Mortgage Balance cannot be greater than or equal to Current Home Market Value.';
return;
}
// Calculations
var maxAllowableTotalDebt = homeValue * (maxCltv / 100);
var maxEligibleHeloc = maxAllowableTotalDebt – existingMortgage;
var helocAmountForPayment = 0;
var message = ";
if (desiredHeloc > maxEligibleHeloc) {
helocAmountForPayment = maxEligibleHeloc;
message = 'Your Desired HELOC Amount exceeds the maximum eligible. Calculations are based on the Maximum Eligible HELOC Amount.';
} else {
helocAmountForPayment = desiredHeloc;
}
var monthlyInterestOnlyPayment = (helocAmountForPayment * (helocRate / 100)) / 12;
var availableEquity = homeValue – existingMortgage;
var equityRemainingAfterMaxHeloc = availableEquity – maxEligibleHeloc;
// Display results
resultsDiv.innerHTML += message;
resultsDiv.innerHTML += 'Maximum Eligible HELOC Amount: $' + maxEligibleHeloc.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + ";
resultsDiv.innerHTML += 'HELOC Amount Used for Payment Calculation: $' + helocAmountForPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + ";
resultsDiv.innerHTML += 'Estimated Monthly Interest-Only Payment: $' + monthlyInterestOnlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + ";
resultsDiv.innerHTML += 'Equity Remaining After Max Eligible HELOC: $' + equityRemainingAfterMaxHeloc.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + ";
}