HELOC Calculator – Home Equity Line of Credit Calculator

HELOC Calculator

What is the HELOC Calculator

HELOC stands for Home Equity Line of Credit. This type of loan allows you to borrow funds up to a pre-approved limit based on the equity in your home mortgage. With a HELOC, you have the flexibility to access these funds whenever you need them.

How to calculate Home Equity Line of Credit

HELOC loan amount = (Home value × 80%) – Mortgage loan balance


Imagine your mortgage balance is $75,000 and your home is valued at $600,000. To calculate the amount available through a HELOC:

HELOC loan amount = ($600,000 × 80%) – $75,000 = $405,000

In this scenario, your LTV ratio is $75,000 / $600,000 = 0.125 or 12.5%, enabling you to access 67.5% of your home’s value through a HELOC. If you had no mortgage debt, you could utilize the full 80%.

When you contact a HELOC provider, you must specify how much you wish to borrow.

For example, if you request a credit line of $150,000, the provider will calculate your CLTV to assess qualification:

CLTV = ($150,000 + $75,000) / $600,000 = 0.375 or 37.5%

Provided your CLTV is under the 80% threshold and you satisfy other provider criteria, you will be approved for the HELOC. 🤝

If you hold a government-backed mortgage, such as FHA, VA, or USDA, you may qualify for up to a 100% LTV ratio with an excellent DTI ratio. The benchmark for an excellent DTI varies by lender, so it’s advisable to use a DTI calculator to gauge your standing.

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