A home equity line of credit (HELOC) lets you borrow against the equity you’ve built in your home, functioning more like a credit card than a traditional loan — you draw funds as needed up to your limit, rather than receiving a lump sum. Our HELOC calculator estimates how much you could borrow based on your home’s value and your remaining mortgage balance, along with an estimated payment.
Lenders typically allow you to borrow up to a combined 80-85% of your home’s value across your mortgage and HELOC together, though this varies by lender and your credit profile. Since a HELOC is secured by your home, missed payments carry a more serious consequence than unsecured debt, which is worth weighing carefully before using one for discretionary spending.
If you’re deciding between a HELOC and refinancing your entire mortgage, our mortgage refinance calculator can help you compare the two approaches. It’s also worth checking your debt-to-income ratio beforehand, since lenders factor this into HELOC approval just as they do for a primary mortgage.