HELOC Calculator
Estimate your available Home Equity Line of Credit (HELOC) amount based on your property's market value, outstanding mortgage balance, and lenders' maximum Loan-to-Value (LTV) limits.
Calculation Results
The maximum total debt allowed against the property (first mortgage + HELOC).
The estimated line of credit available for you to borrow.
How This Calculator Works
To estimate your available credit line:
- Enter the estimated current market value of your property.
- Enter your outstanding primary mortgage balance.
- Provide the maximum Loan-to-Value (LTV) limit allowed by the lender (usually 80%).
The calculator returns your combined debt limit and the exact HELOC borrowing capacity available to you.
Formula & Calculations
Lenders limit total borrowing on home equity to a percentage of the home's value, known as the Loan-to-Value (LTV) ratio (typically 80% to 85%).
First, calculate the maximum allowable combined debt:
Maximum Permissible Debt = Home Value × (Maximum LTV Limit / 100)
Next, subtract your outstanding primary mortgage balance to find the remaining equity line of credit available:
Available HELOC Amount = Maximum Permissible Debt - Outstanding Mortgage Balance
Step-by-Step Calculation Examples
80% LTV HELOC Calculation
Determining HELOC availability for a $400,000 house with a primary mortgage of $220,000 and lender limit of 80% LTV.
- home_value: 400000
- mortgage_balance: 220000
- max_ltv: 80
- max_borrowing_limit: $320,000.00
- available_heloc: $100,000.00
Frequently Asked Questions
What is a HELOC?
A Home Equity Line of Credit (HELOC) is a revolving line of credit secured by your home. It works similarly to a credit card, allowing you to borrow, repay, and borrow again up to your credit limit during the initial "draw period" (usually 10 years).
What is the difference between a HELOC and a Home Equity Loan?
A HELOC is a flexible, revolving credit line with a variable interest rate. A Home Equity Loan provides a lump sum upfront with a fixed interest rate and fixed monthly payments, functioning like a second mortgage.
What happens if home prices fall after opening a HELOC?
If the market value of your home drops significantly, reducing your equity, the lender has the right to freeze, reduce, or suspend your line of credit to protect themselves from risk.