HELOC (Home Equity Line of Credit) Calculator
Total Home Equity:
Max Allowable Debt (at LTV limit):
Estimated Available HELOC:
How to Use the HELOC Calculator
A Home Equity Line of Credit (HELOC) is a revolving line of credit that uses your home as collateral. To determine how much you can borrow, lenders typically look at your current home value and your outstanding mortgage balance.
The HELOC Formula
Lenders usually restrict your total combined loan-to-value (CLTV) ratio to 80% or 85% of your home's appraised value. The formula used in this calculator is:
(Home Value × LTV Limit) – Current Mortgage Balance = Potential HELOC Amount
Example Calculation
If your home is worth $500,000 and your lender allows an 85% LTV, your maximum total debt is $425,000. If you still owe $300,000 on your primary mortgage, your available HELOC would be $125,000 ($425,000 – $300,000).
Key Factors Affecting Your HELOC
- Credit Score: A higher score often unlocks higher LTV limits and lower interest rates.
- Debt-to-Income (DTI) Ratio: Lenders verify that you have enough income to cover the new payments.
- Home Appraisal: The official "Home Value" is determined by a professional appraisal, not just market estimates.
- Draw Period: Most HELOCs have a 10-year period where you can spend the funds, followed by a 20-year repayment period.