Home Equity Line of Credit (HELOC) Calculator
Use this calculator to estimate the maximum Home Equity Line of Credit (HELOC) you might qualify for and the potential monthly payment based on a specific draw amount. A HELOC allows you to borrow against your home's equity, providing a revolving credit line.
Your HELOC Estimates:
Available Home Equity: $0.00
Estimated Maximum HELOC Amount: $0.00
Estimated Monthly Payment (for planned draw): $0.00
Understanding Your Home Equity Line of Credit (HELOC)
A Home Equity Line of Credit (HELOC) is a revolving line of credit that uses your home as collateral. Unlike a traditional home equity loan, which provides a lump sum, a HELOC allows you to borrow money as needed, up to a certain limit, during a "draw period." You only pay interest on the amount you actually borrow.
Key Factors in HELOC Qualification and Cost:
- Current Home Value: This is the market value of your property. Lenders use this to determine how much equity you have.
- Existing Mortgage Balance: The outstanding amount you still owe on your primary mortgage. This directly impacts your available equity.
- Combined Loan-to-Value (CLTV) Ratio: Lenders set a maximum CLTV ratio (e.g., 80% or 85%). This ratio represents the total amount of debt secured by your home (your primary mortgage plus the HELOC) compared to its market value. For example, an 85% CLTV on a $500,000 home means your total debt cannot exceed $425,000.
- Available Home Equity: This is the difference between your home's current value and your existing mortgage balance. While this shows your total equity, the amount you can borrow is limited by the lender's CLTV ratio.
- HELOC Annual Interest Rate: HELOCs typically have variable interest rates, meaning they can change over time. The rate is often tied to an index like the prime rate plus a margin. This calculator uses an estimated rate for payment calculation.
- Planned HELOC Draw Amount: This is the specific amount you intend to borrow from your HELOC. Your monthly payment will be calculated based on this drawn amount, the interest rate, and the repayment term.
- Repayment Term: HELOCs usually have two phases: a draw period (often 5-10 years) where you can borrow and make interest-only payments, and a repayment period (often 10-20 years) where you pay back both principal and interest on the outstanding balance. This calculator estimates payments for the repayment period.
How the Calculator Works:
- Available Home Equity: Calculated as
Current Home Value - Existing Mortgage Balance.
- Estimated Maximum HELOC Amount: This is determined by your lender's maximum CLTV ratio. The formula is
(Current Home Value * CLTV Ratio) - Existing Mortgage Balance. This represents the maximum credit line you might be approved for, assuming you meet other credit criteria.
- Estimated Monthly Payment: This calculation uses a standard amortization formula for a fixed-rate loan, applied to your "Planned HELOC Draw Amount" over the "Repayment Term Years" at the "Estimated HELOC Annual Interest Rate." Keep in mind that actual HELOC payments can vary, especially during the draw period where interest-only payments might be an option, and due to variable interest rates.
Remember, this calculator provides estimates. Your actual HELOC eligibility, interest rate, and terms will depend on your creditworthiness, lender policies, and market conditions. It's always best to consult with a financial advisor or lender for personalized advice.
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function calculateHeloc() {
var homeValue = parseFloat(document.getElementById('homeValue').value);
var existingMortgageBalance = parseFloat(document.getElementById('existingMortgageBalance').value);
var cltvLimit = parseFloat(document.getElementById('cltvLimit').value);
var helocInterestRate = parseFloat(document.getElementById('helocInterestRate').value);
var helocDrawAmount = parseFloat(document.getElementById('helocDrawAmount').value);
var repaymentTermYears = parseFloat(document.getElementById('repaymentTermYears').value);
// Input validation
if (isNaN(homeValue) || homeValue <= 0) {
alert('Please enter a valid Current Home Value.');
return;
}
if (isNaN(existingMortgageBalance) || existingMortgageBalance < 0) {
alert('Please enter a valid Existing Mortgage Balance.');
return;
}
if (isNaN(cltvLimit) || cltvLimit 100) {
alert('Please enter a valid Lender\'s Max CLTV Ratio (between 1 and 100).');
return;
}
if (isNaN(helocInterestRate) || helocInterestRate < 0) {
alert('Please enter a valid Estimated HELOC Annual Interest Rate.');
return;
}
if (isNaN(helocDrawAmount) || helocDrawAmount < 0) {
alert('Please enter a valid Planned HELOC Draw Amount.');
return;
}
if (isNaN(repaymentTermYears) || repaymentTermYears <= 0) {
alert('Please enter a valid Repayment Term in Years.');
return;
}
// Calculations
var availableEquity = homeValue – existingMortgageBalance;
var maxTotalDebtAllowed = homeValue * (cltvLimit / 100);
var maxHelocAmount = maxTotalDebtAllowed – existingMortgageBalance;
// Ensure maxHelocAmount is not negative
if (maxHelocAmount 0 && monthlyInterestRate > 0) {
estimatedMonthlyPayment = helocDrawAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else if (helocDrawAmount > 0 && monthlyInterestRate === 0) {
// If interest rate is 0, payment is just principal / number of payments
estimatedMonthlyPayment = helocDrawAmount / numberOfPayments;
}
// Display results
document.getElementById('availableEquityResult').innerText = '$' + availableEquity.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 });
document.getElementById('maxHelocAmountResult').innerText = '$' + maxHelocAmount.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 });
document.getElementById('estimatedMonthlyPaymentResult').innerText = '$' + estimatedMonthlyPayment.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 });
}
// Run calculation on page load with default values
window.onload = calculateHeloc;