HELOC Calculator

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How the Calculator Works

A Home Equity Line of Credit (HELOC) lets you borrow against your home's value minus what you owe on your mortgage.

The calculator estimates your available line of credit using:

Available Equity = (Home Value × LTV%) – Mortgage Balance

Typical loan-to-value (LTV) ratios range from 80%–90%. The tool also estimates monthly interest payments during the draw period, based on a variable rate you provide.

Formula & Explanation

  • Home Equity: Home Value – Mortgage Balance
  • Available Credit: (Home Value × Max LTV) – Mortgage Balance
  • Monthly Interest (interest-only period): Principal × (Rate ÷ 12)

Example:
Home value $400,000, balance $250,000, LTV 85% →
(400,000 × 0.85) – 250,000 = $90,000 available credit.

Example Calculation

If you borrow $50,000 at 7% interest during the draw period:
Interest-only payment = $50,000 × 0.07 ÷ 12 = $291/month.

How to Use This Tool

  1. Enter home value and mortgage balance.
  2. Choose max LTV (default 85%).
  3. Add interest rate and amount you plan to draw.
  4. Click Calculate to see available credit and payment estimate.

Features & Benefits

  • Calculates total equity and available line of credit
  • Supports interest-only draw period estimates
  • Works for all LTV ratios (60%–95%)
  • Shows monthly interest cost on drawn funds
  • Great for comparing HELOC vs. Home Equity Loan

FAQs

Q1: What's the difference between HELOC and home equity loan?

A1: A HELOC works like a credit line with flexible withdrawals; a home equity loan gives you a fixed lump sum.

Q2: Does the rate stay the same?

A2: HELOCs usually have variable rates that can change monthly.

Q3: How much can I borrow?

A3: Most lenders allow up to 80%–90% of your home's value minus your current mortgage balance.

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