The formula
How it works
A HELOC lets you borrow against the equity in your home. This calculator shows how large a line of credit you could open, based on your home’s value, your mortgage balance and your lender’s loan-to-value limit.
FAQ
What is home equity?
It is the part of your home you actually own — the current value minus what you still owe on the mortgage. A HELOC lets you borrow against a portion of that equity, using your home as collateral.
What is the loan-to-value limit?
Lenders cap how much of your home’s value can be borrowed against, often around 80–90%. The HELOC can be up to that limit minus your existing mortgage, so a higher limit or a smaller mortgage means more available credit.
How does the draw period work?
A HELOC typically has a draw period of 5–10 years where you can borrow, repay and borrow again up to your limit, often with interest-only payments. After that it enters a repayment period, usually 10–20 years, where you pay down principal and interest and can no longer draw new funds.
Is a HELOC rate fixed or variable?
Most HELOCs carry a variable rate tied to an index like the prime rate, so your payment can rise or fall over the draw and repayment periods. Some lenders let you lock a portion of the balance into a fixed rate.
Is HELOC interest tax-deductible?
In some countries the interest may be deductible if the funds are used to buy, build or substantially improve the home that secures the line — rules vary, so check current tax law or a tax professional before assuming it applies.
What credit score do I need for a HELOC?
Lenders generally look for good to excellent credit, often 680 or higher, along with sufficient equity and income to support the payments. A stronger score and lower current LTV typically unlock better rates and higher limits.
Are there fees to open a HELOC?
Many lenders charge an appraisal fee, origination fee, or annual maintenance fee, and some apply an early-closure fee if you pay it off soon after opening. These vary by lender, so compare total costs alongside the rate.
About the HELOC calculator
This calculator estimates how large a home equity line of credit (HELOC) you could qualify for. A HELOC is a revolving credit line secured against your home, letting you borrow against the equity you have built up. The amount available depends on your home’s value, how much you still owe on your mortgage, and the maximum loan-to-value ratio your lender allows. This tool combines those three figures into an available-credit estimate.
How to use it
Enter your home’s current value, your outstanding mortgage balance, and the maximum loan-to-value ratio (often 80–90%). The calculator shows the total borrowing allowed against the home, subtracts your mortgage, and gives the credit you could access through a HELOC. For example, on a $400,000 home with a $250,000 mortgage and an 85% limit, you could borrow up to $90,000.
The formula
The available credit is the home’s value times the loan-to-value limit, minus the existing mortgage: , where is the home value, LTV is the maximum loan-to-value percentage and is the mortgage balance. The first part is the most any lender will let you owe against the home; subtracting the mortgage leaves the room a HELOC can fill.
Where it is used
Homeowners use it to see how much equity they can tap for renovations, debt consolidation, education or emergencies before applying. Lenders apply the same loan-to-value calculation when sizing a line of credit. Because a HELOC is secured against your home, knowing the realistic limit — and borrowing well within it — is an important part of using home equity responsibly.