CalculateY
Quick Answer
For a $500,000 home with a $200,000 mortgage balance and an 80% CLTV limit, the estimated maximum HELOC is approximately $200,000. Drawing $100,000 at 8.5% interest results in an estimated interest-only payment of approximately $708/month and an estimated fully amortized payment of approximately $868/month over 20 years.
Most lenders allow 80% to 85% combined loan-to-value.
How much you plan to borrow from the HELOC.
Common Examples
| Input | Result |
|---|---|
| $500,000 home, $200,000 mortgage, 80% CLTV, $100,000 draw at 8.5% | Estimated max HELOC: $200,000, estimated interest-only payment: approximately $708/month |
| $400,000 home, $100,000 mortgage, 85% CLTV, $150,000 draw at 9% | Estimated max HELOC: $240,000, estimated interest-only payment: approximately $1,125/month |
| $600,000 home, $350,000 mortgage, 80% CLTV, $50,000 draw at 8% | Estimated max HELOC: $130,000, estimated interest-only payment: approximately $333/month |
| $350,000 home, $250,000 mortgage, 80% CLTV | Estimated max HELOC: approximately $30,000 |
| $300,000 home, $280,000 mortgage, 80% CLTV | Estimated max HELOC: $0 (insufficient equity at 80% CLTV) |
How It Works
This calculator uses three formulas to estimate HELOC availability and payments:
Maximum HELOC = (Home Value x Max CLTV%) - Mortgage Balance
The combined loan-to-value (CLTV) ratio represents the total of all loans secured by the property divided by the home’s value. Most lenders cap CLTV at 80% to 85%, though some programs allow up to 90%. If the result is negative, the homeowner does not have enough equity to qualify for a HELOC at that CLTV threshold.
Interest-Only Payment = Draw Amount x (Annual Rate / 100) / 12
During the draw period (typically 5 to 10 years), most HELOCs require only interest payments on the outstanding balance. The borrower can draw funds up to the credit limit and pay interest only on the amount actually used.
Fully Amortized Payment = P x [r(1+r)^n] / [(1+r)^n - 1]
Where P is the draw amount, r is the monthly interest rate (annual rate / 12 / 100), and n is the total number of monthly payments. After the draw period ends, the repayment period begins and the outstanding balance is amortized over the remaining term with fixed principal-and-interest payments.
How CLTV works
CLTV combines the first mortgage balance and the HELOC balance, then divides by the home value. For a $500,000 home with a $200,000 mortgage and a $100,000 HELOC draw, the CLTV is ($200,000 + $100,000) / $500,000 = 60%. Lenders use CLTV to assess risk. Lower CLTV ratios generally qualify for better rates and higher credit limits.
Draw period vs. repayment period
A typical HELOC has two phases. The draw period (usually 5 to 10 years) allows the borrower to access funds as needed and make interest-only payments. The repayment period (usually 10 to 20 years) follows, during which no new draws are allowed and the balance is repaid through fully amortized monthly payments that include both principal and interest. The transition from interest-only to fully amortized payments can significantly increase the monthly payment amount.
Worked example
For a $500,000 home with a $200,000 mortgage, 80% maximum CLTV, and a $100,000 draw at 8.5% with 20-year repayment: Maximum borrowing power = $500,000 x 0.80 = $400,000. Available equity = $400,000 - $200,000 = $200,000. The $100,000 draw is within the limit. Current LTV = $200,000 / $500,000 = 40%. New CLTV = ($200,000 + $100,000) / $500,000 = 60%. Interest-only payment = $100,000 x 0.085 / 12 = $708.33/month. Fully amortized payment over 20 years (240 months) at 8.5% is approximately $868/month.