HELOC Calculator
Estimate the maximum home equity line of credit you could qualify for, and the interest-only monthly payment on a fully drawn line.
Available HELOC line
£225,000.00
- Current home equity
- £300,000.00
- Max combined debt at CLTV cap
- £425,000.00
- Current loan-to-value
- 40%
- Interest-only monthly payment (full draw)
- £1,593.75
- Annual interest cost (full draw)
- £19,125.00
Lenders limit the combined loan-to-value (CLTV) across your first mortgage and any new HELOC. The available line is the gap between that cap and what you already owe on the mortgage. During the draw period (typically 10 years) most US HELOCs charge interest only on the balance you actually use, so the payment shown is for a fully drawn line at the rate entered — partial draws cost proportionally less.
How to use this calculator
Enter your home’s current market value, the balance still owed on your first mortgage, the maximum combined loan-to-value (CLTV) your lender allows, and the HELOC interest rate (APR) you have been quoted. The calculator returns the largest credit line you could likely qualify for, your existing home equity and CLTV, and the interest-only monthly payment if you drew the full line during the draw period.
How the calculation works
US lenders cap the total debt secured by your home as a percentage of its value — typically 80%–90%. That cap is the combined loan-to-value (CLTV) limit. Multiply the home value by the CLTV percent to get the maximum combined debt, then subtract what you already owe on the first mortgage; the difference is the available HELOC line. Most HELOCs are interest-only during the draw period (commonly 10 years), so the monthly payment on a fully drawn balance is simply balance × APR ÷ 12.
Worked example
Home value 500,000, mortgage balance 200,000, lender CLTV cap 85%, HELOC APR 8.5%. Max combined debt = 500,000 × 0.85 = 425,000. Available HELOC = 425,000 − 200,000 = 225,000. Interest-only monthly payment on a full draw = 225,000 × 0.085 ÷ 12 ≈ 1,593.75. Current home equity is 300,000 and current loan-to-value is 40%.
Frequently asked questions
How is HELOC eligibility calculated?
Lenders look at three things: your home’s appraised value, the balance on your first mortgage, and the combined loan-to-value (CLTV) ratio they are willing to lend at. They multiply the home value by the maximum CLTV (typically 80%–90%) to get the maximum total debt your home can carry, then subtract your existing mortgage balance — what is left is the largest HELOC line they will likely approve. Credit score, debt-to-income ratio and income documentation then determine the actual rate and final approved amount.
What is CLTV and why does it cap my line?
Combined loan-to-value (CLTV) is the total of all loans secured by your home divided by the home’s value, expressed as a percentage. A first mortgage of 200,000 on a 500,000 home is a 40% loan-to-value; adding a 100,000 HELOC raises CLTV to 60%. Lenders cap CLTV (commonly at 80%, 85% or 90%) to make sure there is enough equity left as a cushion if home prices fall. This calculator subtracts your current mortgage from the CLTV cap to show the headroom available for a new HELOC.
Is a HELOC interest-only?
During the draw period — typically the first 10 years — most US HELOCs require interest-only payments on whatever balance you have drawn. After the draw period ends, the line enters the repayment period (commonly 20 years), during which you can no longer borrow more and the balance amortises like a regular installment loan, with both principal and interest in each payment. Some lenders allow optional principal payments during the draw period to soften the transition.
What HELOC rate should I expect?
HELOCs are usually variable-rate loans tied to the Wall Street Journal prime rate plus a lender margin. In 2026, US prime rates have hovered in the 7%–9% range, so HELOC APRs are commonly quoted in the high single digits to low double digits depending on credit profile, CLTV, and whether the lender is offering an introductory teaser rate. Some lenders offer the option to fix a portion of the balance at a fixed rate; check rate caps and lifetime maximums before signing.
HELOC vs home equity loan — what is the difference?
A HELOC is a revolving line of credit you draw against as needed, usually at a variable rate with interest-only payments during the draw period. A home equity loan is a lump-sum second mortgage with a fixed rate and fixed monthly principal-and-interest payment from day one. HELOCs are better when you want flexibility (renovations in stages, an emergency buffer); home equity loans are better when you need a single large amount at a predictable cost and want rate certainty.
Are HELOC payments tax-deductible?
Under current US tax law (Tax Cuts and Jobs Act, in effect through 2025 with provisions extending), HELOC interest is deductible only when the proceeds are used to buy, build or substantially improve the home that secures the loan, and only within the overall mortgage-interest cap (750,000 of combined acquisition debt for loans taken out after 15 December 2017). Interest on a HELOC used to pay off credit cards, fund a car or pay tuition is not deductible. Tax rules change — always confirm with a CPA for your situation.