Your Property Details
$
$
%
%
$
Your Equity & Borrowing Power
Available Home Equity
—
Current LTV Ratio—
Max HELOC Available—
Monthly Interest (draw period)—
Annual Interest Cost—
Home Equity Loans vs HELOC: What's the Difference?
A Home Equity Loan gives you a lump sum at a fixed rate, repaid over a set term — like a second mortgage. A HELOC (Home Equity Line of Credit) works more like a credit card: you draw what you need up to your limit during a draw period (typically 10 years), paying interest only on what you use, then repay during a repayment period (typically 20 years).
How Much Can You Borrow?
Most lenders allow a combined LTV (CLTV) of 80–90%. Your CLTV is (first mortgage balance + HELOC limit) / home value. So on a $450,000 home with $280,000 owed and 85% max CLTV, your combined borrowing limit is $382,500, minus your $280,000 balance = $102,500 max HELOC.
Common Uses for Home Equity
- Home renovations and improvements (can increase home value)
- Debt consolidation (replacing high-rate credit card debt with lower home equity rates)
- College tuition or major expenses
- Emergency fund backup (draw only when needed)
Frequently Asked Questions
Is HELOC interest tax deductible? ▼
HELOC interest is only deductible if the funds are used to "buy, build, or substantially improve" the home securing the loan. Using HELOC funds for debt consolidation, college, or other purposes does not qualify for the deduction under current law (post-2017 Tax Cuts and Jobs Act). You must itemize deductions (not take the standard deduction) to claim this benefit.
What's the risk of a HELOC? ▼
Your home is the collateral — if you can't repay, you risk foreclosure. HELOCs typically have variable rates, so your payment can rise significantly if interest rates increase. Additionally, if home values fall below your combined mortgage + HELOC balance, you could end up underwater. Only borrow what you can comfortably repay.