HELOC & Home Equity Loan Calculator
Calculate your maximum HELOC borrowing limit based on Combined Loan-to-Value (CLTV 80-85%), interest-only draw payments, and 20-year principal repayment schedules.
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Frequently Asked Questions
What is the difference between a HELOC and a Home Equity Loan?
A Home Equity Loan is a fixed-rate second mortgage that distributes a single lump sum upfront with fixed monthly payments. A HELOC (Home Equity Line of Credit) functions like a credit card secured by your home: you draw money as needed during a 10-year draw period with variable interest rates.
What is Combined Loan-to-Value (CLTV)?
CLTV is the sum of all mortgages and equity loans on a home divided by its current market value. Lenders typically cap total borrowing at 80% to 85% CLTV. For example, on a $500,000 home with an 85% CLTV limit ($425,000) and a $300,000 first mortgage, your maximum HELOC limit is $125,000.
Is HELOC interest tax deductible in the US?
Under the Tax Cuts and Jobs Act, interest paid on a HELOC is tax-deductible only if the borrowed funds are used exclusively to buy, build, or substantially improve the primary or secondary residence securing the loan (such as an addition, kitchen renovation, or roof replacement).
What happens at the end of a HELOC draw period?
After the 10-year draw period expires, the line enters the repayment period (typically 20 years). You can no longer borrow money, and monthly payments jump substantially because you must pay both principal and interest rather than interest only.