How to use the Home Equity Calculator
- 1 Enter your home value.
- 2 Enter your mortgage balance.
- 3 Choose the lender's CLTV limit.
- 4 Enter the rate and the amount to borrow.
Worked example
A $500,000 home with a $250,000 mortgage and an 85% CLTV limit. The lender limit is $425,000, so you could borrow up to $175,000. Drawing $50,000 at 8% costs about $333 a month interest-only, or about $478 a month on a 15-year home equity loan.
Features
Borrowing limit
Home value × CLTV limit, minus the mortgage.
Two payment views
Interest-only HELOC payment and a fixed 15-year loan.
Current equity
See the equity you have built.
When to use it
Home renovations
Plan a remodel funded by equity.
Debt consolidation
Compare with a personal loan.
Emergency backup
Set up a credit line before you need it.
Education costs
Compare with student loans.
Frequently asked questions
What is a HELOC?
A home equity line of credit lets you borrow against your home as needed, usually with interest-only payments during a draw period of about 10 years.
What is CLTV?
Combined loan-to-value: all loans on the home divided by its value. Many lenders allow 80% to 85%, some up to 90%.
HELOC or home equity loan?
A HELOC has a variable rate and flexible draws. A home equity loan gives a lump sum at a fixed rate and payment.
Is HELOC interest tax-deductible?
Only if the money is used to buy, build or substantially improve the home securing the loan, within mortgage interest limits.
What are the risks?
Your home is the security, so missing payments can lead to foreclosure. HELOC rates can rise.
What credit score do I need?
Many lenders want 680 or higher.
How long is the HELOC draw period?
Usually 10 years, followed by a repayment period of 10 to 20 years when you pay principal and interest.
Are there closing costs?
Some lenders charge appraisal and closing fees of 2% to 5%, while others waive them for keeping the line open.
Can a lender freeze my HELOC?
Yes. Lenders can freeze or reduce a line if your home value drops sharply or your finances change.
What is a cash-out refinance?
Replacing your mortgage with a bigger one and taking the difference in cash. It can make sense when current rates are lower than your existing rate.
Is a HELOC good for buying a car?
Usually not, because you would be borrowing against your home for a depreciating asset.
How is my home value set?
The lender orders an appraisal or an automated valuation. Using a realistic value avoids surprises when the line is approved.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated