HELOC Calculator

Your equity is the part of the home you actually own: the current market value minus everything secured against it. But lenders do not let you borrow against all of that equity. They set a maximum combined loan-to-value ratio — typically 80% to 90% — that limits how much total debt can sit against the property, counting both your existing mortgage and the new HELOC.

To find your available line, the calculator takes the home value, multiplies it by the LTV cap to get the maximum total borrowing the lender will allow, then subtracts your current mortgage balance. Whatever room is left is your potential credit line. If your mortgage already pushes you past the cap, the available line is zero until you pay down the balance or the property appreciates.

A HELOC differs from a lump-sum loan in two important ways. First, it is revolving: during the draw period you can borrow, repay, and borrow again up to the limit, and you only pay interest on what you have actually drawn. Second, the rate is almost always variable, tied to a benchmark index, so your interest cost rises and falls with the market. That flexibility makes a HELOC well suited to ongoing or uncertain expenses like a staged renovation, but it also means your payment is not fixed the way a traditional loan payment is.

Suppose your home is worth 400,000 and you still owe 200,000 on your mortgage. Your current equity is 200,000, and your current LTV is 200,000 ÷ 400,000 = 50%. With a lender cap of 85% combined LTV, the maximum total debt allowed is 400,000 × 0.85 = 340,000. Subtract your 200,000 mortgage and you have an available HELOC line of 140,000 — even though your total equity is 200,000, because the lender keeps a 15% cushion in the property.

If your mortgage balance already exceeds the LTV cap times the home value, the available line is zero — the calculator floors it rather than showing a negative number. A falling home value shrinks both your equity and your borrowing room, which is why lenders can freeze or reduce a HELOC during a downturn. Because the rate is variable, the same line can cost very different amounts month to month; budget for rate increases rather than today's rate alone.