The concept
How lenders size a home equity loan or HELOC
Home equity is the difference between what your home is worth and what you still owe on it. Lenders typically won't let combined borrowing (your existing mortgage plus a new home equity loan or HELOC) exceed a maximum combined loan-to-value ratio, often around 80%, though this varies by lender and credit profile.
This calculator estimates the borrowing room implied by that limit. It does not evaluate your income, credit, debt-to-income ratio or a lender's specific underwriting rules, all of which affect whether you'd actually qualify for the full amount.
The method
How the calculation works
The home's value is multiplied by the maximum loan-to-value percentage entered, giving the largest total debt a lender might allow against the home. The existing mortgage balance is then subtracted to estimate how much additional borrowing room remains.
A lender's maximum combined loan-to-value ratio is applied to the home's value, and the existing mortgage balance is subtracted to find remaining borrowing room.
Worked example
A neutral example
For a $450,000 home, a $250,000 existing mortgage balance and an 80% maximum combined loan-to-value ratio, the calculator estimates the maximum additional amount you might be able to borrow under those exact assumptions.
This example explains the method. It does not recommend a financial action or predict an outcome.
Frequently asked
Home Equity & HELOC Calculator questions
What's the difference between a home equity loan and a HELOC?+
A home equity loan disburses a lump sum with a fixed repayment schedule. A HELOC is a revolving line of credit you can draw against as needed, usually with a variable rate. This calculator estimates borrowing capacity for either, since both are typically capped by the same combined loan-to-value limit.
Why 80% and not 100% of my home's value?+
Lenders generally keep some equity cushion in the property to reduce their risk if home values fall. 80% is a common maximum, but some lenders allow more or less depending on the borrower and loan type — adjust the input to match an actual offer.
Does this calculator check whether I'd qualify for the loan?+
No. It only estimates equity-based borrowing room. Actual approval also depends on income, credit score, debt-to-income ratio and the specific lender's underwriting standards, none of which are modeled here.