How much you can borrow against your home — HELOC and home equity loan math
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Max You Can Borrow
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Total Equity
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Payment on Your Draw
Mortgage Borrowable Protected equity
Remaining balance Interest paid to date Total paid to date
This is a lump-sum, fixed-rate home equity loan: interest is charged on the balance left each month, so early payments are mostly interest and later ones are mostly principal — the same shape as your first mortgage.
If you've owned a home through the last decade's appreciation, you're probably sitting on six figures of equity — and lenders will happily let you borrow most of it back. This calculator shows the three numbers that define that decision: your total equity, the portion lenders will actually extend (the CLTV limit), and the monthly payment on whatever you draw. Whether that's wise depends entirely on what the money buys.
The CLTV Math Lenders Use
Max borrowable = (Home value × max CLTV) − current mortgage balance
CLTV — combined loan-to-value — counts every lien against the home. Most lenders cap it at 80%; strong credit can reach 85–90%. Example: a $420,000 home with $245,000 owed has $175,000 of equity, but at 80% CLTV the borrowable slice is $420,000 × 0.80 − $245,000 = $91,000. The rest is the cushion lenders keep against price declines — and honestly, a cushion for you too.
Only when today's rates beat your current mortgage rate
Trap
Interest-only draw period ends; payment jumps
Borrowing more than needed 'while we're at it'
Resetting a cheap 3% mortgage to tap equity — usually a mistake
The post-2021 rule of thumb: if your first mortgage is locked below ~5%, second-lien products (HELOC/HE loan) protect it; a cash-out refi would trade your best asset (the cheap rate) for liquidity. Run the refi side with the Refinance Savings Calculator before choosing.
Good Uses, Bad Uses
Defensible: renovations that add value (see the Renovation ROI Calculator), consolidating 22%+ card debt onto an 8.5% secured line with the cards then closed, bridging a genuine emergency.
Dangerous: cars and vacations (depreciating or gone, debt remains for 15 years), investing the proceeds (leverage on your house), and debt consolidation without fixing the spending — the classic path to the same cards maxed again plus a bigger lien.
The core trade, stated plainly: unsecured debt becomes secured by your home. The rate is lower precisely because foreclosure replaces collections as the downside.
What the Interest Costs — and the Tax Footnote
HELOC interest is tax-deductible only when the funds buy, build or substantially improve the home securing the loan (and only if you itemize). Consolidation and other uses: not deductible. Budget on the gross rate.
How to Use the Calculator
Estimate current value honestly (recent neighborhood comps, not wishful Zestimates) and enter your mortgage payoff balance.
Pick the CLTV your credit likely supports (80% default).
Enter the amount you actually need — not the maximum — with the quoted rate and term.
Read the equity bar: red is owed, purple is borrowable, green is the cushion that stays yours.
Frequently Asked Questions
HELOC or home equity loan — which is right for me?
Known one-time cost with rate certainty: the loan. Phased or uncertain costs where flexibility matters: the HELOC — but budget for the rate being variable and the draw period ending. Many lenders offer fixed-rate locks on HELOC draws, a useful hybrid.
What credit score do I need?
Most lenders want 660–680+; the best rates and 90% CLTV tiers sit above 740. Your existing mortgage payment history weighs heavily — see the Credit Score Estimator.
How is my home's value determined?
Smaller lines often use automated valuation models or drive-by appraisals; larger ones require a full appraisal. If the AVM undervalues your home, ask for a full appraisal — it can unlock tens of thousands of borrowing power.
What happens when a HELOC's draw period ends?
Typically 10 years interest-only, then 10–20 years of amortizing repayment — the payment can double or worse at the transition. This calculator's payment figure is the amortizing (honest) version.
Can I lose my house over this?
Yes — that's the entire mechanism. A HELOC default is a foreclosure risk exactly like mortgage default. The discipline test: would you still borrow this if the rate were a personal loan's 13%? If only the cheap rate makes it attractive, the purchase may be the problem.
Are there closing costs?
HELOCs often advertise low/no closing costs (with early-closure clawbacks); home equity loans run 2–5%. Factor them when comparing against a personal loan for smaller amounts.
Is my information private?
Yes — home value and balances are processed locally in your browser.
Equity is the wealth you've already built; borrowing it back is spending your own safety margin. Borrow for things that grow value, keep the cushion green, and let the payment figure — not the approval maximum — size the draw.