Home Equity Line of Credit (HELOC) Calculator

Complete the two fields in our HELOC calculator below to see how much you can borrow against your home. Estimates are based on the home’s current market value, your outstanding mortgage balance, and the loan-to-value ratio, or LTV.

Who Should Use This Calculator

Use this calculator if you would like to see how much you can borrow with a Home Equity Line of Credit (HELOC).

This is not the same as a Home Equity Loan. Learn the differences here: HELOC Vs HELOAN.

This will not calculate your monthly payment, or the final cost of the loan.

Here’s a closer look at how a HELOC calculator estimates how much you’re allowed to borrow against your home equity.

4 Numbers to Know for Calculating Your HELOC Amount

There are a few numbers and concepts you should understand to have a full picture of what this calculator considers when predicting how much money you can get with a HELOC. These include your home value, mortgage balance, credit score, and more. Let’s dive into the 4 numbers you need to understand when calculating your HELOC amount.

1. Home Equity

Your home’s equity is the difference between the value of your home and your mortgage balance. For instance, let’s say your home is worth $300,000 and you owe $140,000 on your mortgage. That means you have $60,000 in home equity. It’s the portion of the home’s current value that you–the homeowner–own outright. The less you owe on your mortgage, the more equity you will have.

Your home equity also changes as market values fluctuate. As your home value increases, so does your equity. If your home value decreases, your equity may also – if the value is dropping faster than you are paying down your mortgage balance.

2. Mortgage Balance

As a homeowner, you likely already know that your mortgage balance is the full amount owed at any time throughout the duration of your mortgage. As we mentioned above, your home equity is determined by deducting your mortgage balance from your home’s current market value.

Paying down your mortgage is done through monthly payments. The monthly payment pays down the principal balance and interest. In other words, with each mortgage payment, you’re reducing the amount you owe on the principal, which helps you build equity.

Your mortgage, or the money you owe on your home, plays a lead role in determining your home equity and your estimated HELOC line amount and rates.

3. Loan-to-Value Ratio

Your Loan-to-Value Ratio, or LTV, describes the amount you can borrow compared to the value of the property securing the loan. To find this number, expressed as a percentage, you’ll divide your mortgage loan balance (i.e. what you still owe on your mortgage) by your property’s current market value. This gives lenders an idea of the risk involved in lending to you. For instance, a home purchased for $400,000 with a $300,000 mortgage results in a LTV ratio of 75%.

Lenders want to see lower LTVs, as it signifies a lower risk in lending. When using a HELOC calculator, the LTV ratio gives lenders an idea of the maximum amount you can borrow based on your home’s value.

4. Credit Score

Your credit score is one of the most important numbers in your financial life. A credit score is a 3-digit number, falling on a scale from 300 to 850, which summarizes your credit history and represents your financial track record. It’s basically a report card for how you’ve handled finances in the past – and it will inform potential lenders on the risks of lending to you in the future.

There are many factors that go into determining your credit score. Your payment history, credit inquiries, and the percentage of credit limit used all play a role. Generally, a credit score at or above 740 is considered very good or exceptional, while a score below 670 is considered poor. Scores at or above 670 are generally considered good. Your credit score is a major factor in determining your eligibility for any type of loan or credit line, especially a HELOC.

A healthy credit score is a key aspect of a healthy financial life – and will play an influential role in your ability to secure a HELOC.

Using a HELOC Calculator to Estimate Your Line of Credit

Once you’ve got these numbers figured out, you can start calculating your estimated HELOC amount. This HELOC calculator helps determine the amount you can borrow with a Home Equity Line of Credit, which typically ranges anywhere from $50,000 to $500,000.

Keep in mind that lenders typically won’t let you tap into your home equity if you owe more than 90% of what your home is worth.

How much can I borrow with a HELOC?

You’ll likely be able to access up to 90% of your home’s value minus your current loan balance, so keep this in mind during the calculation process.

Here’s an example:

Let’s say your home is worth $400,000, and you owe $100,000 on your mortgage balance. Your lender says you can borrow up to 90% of your home’s value – which in this case is $320,000 Subtract that $100k you owe on your mortgage, and you’ve got your estimated maximum HELOC line amount. Here’s a visual chart to help break it down.

HELOC calculator - estimated HELOC line amount

Paying Off Your HELOC

Once the lender approves your HELOC, you can tap into your total credit line amount by borrowing as needed. Much like a credit card, you can use the HELOC when you need it and pay off the balance monthly (with interest). HELOC interest rates are usually variable, but you can also talk to your lender about the option of a fixed-rate. HELOCs are typically split into two terms – the draw period and the repayment period – for monthly payments.

During the draw period, which typically lasts up to 10 years, you can access your line of credit as needed while making flexible monthly payments. While you might have the option to only pay back the interest on what you’ve borrowed during the draw period, if you make principal and interest payments during this time, your payment amount during the repayment period will be smaller.

During the repayment period, which typically lasts anywhere from 10 to 20 years, you’ll have to pay back both interest and the principal balance and you’ll no longer be able to borrow from your HELOC. That means your average monthly payment may be larger than your typical payments during the draw period since you have to include the principal balance. That’s why many lenders recommend paying more than the minimum amount during the draw period to avoid payment shock later on.

You’re off to a good start.

When talking to a lender about a HELOC, it’s good to go in with a baseline knowledge of where you stand in terms of your home value, mortgage balance, LTV, and credit score. While lenders can guide you on which types of loans and lines of credit are best for your situation, using a HELOC calculator gives you a head start in making the best decision for your financial life. Speaking of lenders, here’s everything you need to know about HELOCs with Prosper.

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT.

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.

What this means for you: When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

Eligibility for a home equity loan or HELOC up to $500,000 depends on the information provided in the home equity application. Loans above $250,000 require an in-home appraisal and title insurance. For HELOCs borrowers must take an initial draw of $50,000 at closing. Subsequent HELOC draws are prohibited during the first 90 days following closing. After the first 90 days following closing, subsequent HELOC draws must be $1,000 or more (not applicable in Texas).

The time it takes to get cash is measured from the time the Lending Partner receives all documents requested from the applicant and assumes the applicant’s stated income, property and title information provided in the loan application matches the requested documents and any supporting information. Spring EQ borrowers get their cash on average in 26 days. The time period calculation to get cash is based on the first 6 months of 2022 loan fundings, assumes the funds are wired, excludes weekends, and excludes the government-mandated disclosure waiting period. The amount of time it takes to get cash will vary depending on the applicant’s respective financial circumstances and the Lending Partner’s current volume of applications.

Spring EQ cannot use a borrower’s home equity funds to pay (in part or in full) Spring EQ non-homestead debt at account opening. For HELOCs in Texas, the minimum draw amount is $4,000. To access HELOC funds, borrower must request convenience checks.

Interest rates may be adjusted based on factors related to the applicant’s credit profile, income and debt ratios, the presence of existing liens against and the location of the subject property, the occupancy status of the subject property, as well as the initial draw amount taken at the time of closing. Speak to a Prosper Agent for details.

Qualified applicants may borrow up to 95% of their primary home’s value (not applicable in Texas) and up to 90% of the value of a second home. Home equity loan applicants may borrow up to 85% of the value of an investment property (not applicable for HELOCs).

All home equity products are underwritten and issued by Spring EQ, LLC, an Equal Housing Lender. NMLS #1464945.

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