HELOC Calculator
Use your estimated market value, not the original purchase price.
A home equity line of credit lets you borrow repeatedly against the equity in your property, up to a ceiling set by a lender’s combined loan-to-value ratio. Enter your home value, the current first-mortgage balance and the lender’s CLTV limit to estimate the maximum combined liens, your current LTV and the HELOC room that may be available before fees and underwriting.
How to estimate HELOC room
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1
Enter a current home value
Use a recent appraisal, broker price opinion or market estimate rather than the original purchase price.
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2
Add the first mortgage balance
Use the current payoff amount from your mortgage servicer so the equity calculation is not overstated.
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3
Set the lender CLTV limit
Many lenders cap combined loan-to-value around 80-90%, but the exact limit depends on credit, property type and local rules.
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4
Review the available line scenarios
The calculator shows the estimated maximum line and sample draw sizes so you can compare them with lender quotes.
How HELOC room works in numbers
A HELOC is a revolving credit line, not a lump-sum loan. You have an approved ceiling (the “line amount”) and can borrow, repay and borrow again during the draw period.
Line amount math
Maximum line = (Home value × CLTV limit) − Current mortgage balance
Example: a home worth $500,000 with a $300,000 mortgage at an 85% CLTV cap:
Maximum line = (500,000 × 0.85) − 300,000 = 425,000 − 300,000 = $125,000
That $125,000 is the estimated room before lender fees, appraisal changes, credit conditions or minimum/maximum line rules.
Draw vs repayment phases
| Phase | Typical length | What usually happens |
|---|---|---|
| Draw | 5-10 years | You can borrow up to the line and may pay interest only on the drawn balance |
| Repayment | 10-20 years | New draws stop and the borrowed balance is repaid with principal and interest |
During the draw phase, a 7.5% APR on a $50,000 balance means 50,000 × 0.075 / 12 = $312.50 per month if the plan is interest-only. When repayment starts, the same $50,000 over 20 years at 7.5% is roughly $402.78 per month.
Variable rate exposure
Most HELOCs use a variable rate built from an index, often the US prime rate, plus a lender margin. If the index rises 100 basis points, the interest-only payment rises proportionally. Stress-test your budget against a higher rate, not just today’s quote.
Fees and traps to watch
- Early closure fee: 1-2% of the line if you close it within the first few years.
- Annual fee: often $50-$100 per year during the draw period.
- Minimum draw: some lenders require an initial draw of 50-75% of the line.
- Balloon payment: some older plans end the draw period with the full balance due instead of converting to amortized repayment, so read the disclosure.
Frequently Asked Questions
During the draw period you only owe interest on the money you have actually borrowed, not the full approved line. A $100,000 line with a $10,000 draw charges interest only on the $10,000. Once repayment begins, the drawn balance amortizes and the payment can rise sharply.
LTV compares one loan to the home value. CLTV adds every lien — first mortgage, HELOC and any second mortgage — against the value. A lender that caps CLTV at 85% will fund a HELOC only up to the point where your total secured debt reaches that limit.
Under current IRS guidance for US taxpayers, home-equity loan or HELOC interest may be deductible only when the funds are used to buy, build or substantially improve the home that secures the loan, subject to mortgage debt limits and other rules. Tax treatment varies by country and situation, so check with a qualified tax professional.
You convert unsecured debt, such as credit cards, into debt secured by your home. If you miss payments, the lender can foreclose. The lower rate is tied to that security, so use a HELOC for consolidation only when the total cost falls and you have a realistic payoff plan.
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