Cupcake Cost Calculator

HELOC (Home Equity Line of Credit) Calculator

Your HELOC Estimate

Estimated Credit Line

$0

Interest-Only Payment

$0

(Based on full line usage)

function calculateHELOC() { var homeValue = parseFloat(document.getElementById('homeValue').value); var balance = parseFloat(document.getElementById('mortgageBalance').value); var cltv = parseFloat(document.getElementById('cltvLimit').value) / 100; var rate = parseFloat(document.getElementById('helocRate').value) / 100; if (isNaN(homeValue) || isNaN(balance) || isNaN(cltv) || isNaN(rate)) { alert("Please enter valid numbers in all fields."); return; } // Calculation: (Value * CLTV %) – Existing Mortgage var totalBorrowingPower = homeValue * cltv; var availableLine = totalBorrowingPower – balance; if (availableLine < 0) { availableLine = 0; } // Interest only monthly payment: (Line * Rate) / 12 var monthlyInterest = (availableLine * rate) / 12; document.getElementById('maxCreditLine').innerText = '$' + availableLine.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('interestOnlyPayment').innerText = '$' + monthlyInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('heloc-results').style.display = 'block'; }

Understanding Your HELOC Borrowing Power

A Home Equity Line of Credit (HELOC) is a revolving line of credit that allows you to borrow against the equity in your home. Unlike a home equity loan, which provides a lump sum, a HELOC functions more like a credit card with your home as collateral.

How is a HELOC Calculated?

Lenders typically use a Combined Loan-to-Value (CLTV) ratio to determine your limit. The standard formula used by our calculator is:

(Market Value × Max CLTV %) – Remaining Mortgage Balance = Available HELOC

Realistic Example

Suppose your home is worth $450,000 and you owe $250,000 on your current mortgage. If your lender allows a CLTV of 85%:

• 1. Maximum borrowing capacity: $450,000 × 0.85 = $382,500
• 2. Subtract current mortgage: $382,500 – $250,000 = $132,500
• Result: Your available HELOC limit would be $132,500.

Draw Period vs. Repayment Period

HELOCs generally have two phases:

1. The Draw Period: Usually the first 10 years. During this time, you can borrow funds and often have the option to make interest-only payments.
2. The Repayment Period: Usually the following 10 to 20 years. You can no longer draw money, and you must pay back both principal and interest.

Key Terms to Know

Term	Definition
Equity	The difference between your home's value and what you owe on your mortgage.
CLTV	Combined Loan-to-Value. The percentage of your home's value that a lender is willing to finance across all loans.
Variable Rate	Most HELOCs have interest rates that fluctuate based on the market (Prime Rate).

Disclaimer: This calculator is for estimation purposes only. Individual lender requirements, credit scores, and property appraisals will determine your actual borrowing limit.