What is the difference between a HELOC and a Home Equity Loan?

A Home Equity Loan provides a lump-sum payout with a fixed interest rate, while a HELOC operates as a revolving line of credit with variable interest rates and an interest-only draw period.

Updated: August 2026 • Verified v1.2

Home Equity Loan & HELOC Borrowing Calculator

Finance & MathPopular

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HELOC Borrowable = (Home_Value * Max_LTV%) - Mortgage_Balance

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Understanding Your Results

Computes total property equity, maximum borrowable line of credit, loan-to-value ratio, and monthly interest-only vs principal+interest payment estimates.

Practical Guidance & Next Steps

Most mortgage lenders cap maximum combined loan-to-value (CLTV) at 80% to 85% of appraised market value.

What is this?

A mortgage finance utility that computes available home equity and maximum borrowable credit lines based on lender LTV caps.

How does it work?

1. Enter your home market value and current mortgage balance. 2. Select maximum lender LTV cap (75%, 80%, 85%, 90%) and interest rate. 3. View total equity, maximum borrowable credit, and estimated monthly payments.

Why use it?

Determines your borrowing capacity for home renovations, tuition, or debt consolidation before applying with banks.

Technical Scope & Calculation Limitations

Does not account for lender origination closing costs or appraisal fees.

Frequently Asked Questions

Most lenders require you to keep at least 20% equity in your home, meaning your primary mortgage plus your HELOC cannot exceed 80% of your home's appraised value.

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