HELOC calculator FAQ
Whether you’re buying a home or refinancing, there’s never been a better time to lock in a lower rate.
A Home Equity Line of Credit is a financing solution that lets you tap into the equity you’ve built in your home and convert it into a flexible line of credit. Think of it as having funds on demand — you can withdraw what you need when you need it. This kind of flexibility is great for homeowners looking for help managing unexpected expenses.
Because a HELOC lets you use your built-up equity, you’re using your home as collateral. So, you can also think of a HELOC as a second mortgage, one that comes with variable interest rates that could change over time.
That means you’ll be responsible for two payments each month: one for your original mortgage, and one for your HELOC.
Ready to tap into your equity? Submit a HELOC application today!
Here are just three of the many benefits that come from using our HELOC calculator:
- Estimate your borrowing potential: Our HELOC qualification calculator gives you a quick look at how much of your home’s equity you may be able to access.
Plan for your financial future: Results could help you better determine how to meet your goals, whether it’s a renovation project, paying for a wedding or education expenses.
Make informed decisions: Knowing how much you could borrow through a HELOC may help you narrow down your options and confidently select a financing solution.
As part of the HELOC application process, our Rate underwriting team evaluates the following key factors to determine if you qualify:
- Credit score: 640 minimum
- Debt-to-income ratio: 50% maximum.
- Combined loan-to-value ratio: 85% maximum
- Property types: Single-family homes, townhomes and condos are all eligible
A HELOC is a flexible solution that can be used for a variety of financing needs. Here are a few common HELOC uses.
Home improvements
Whether you’re upgrading your kitchen, landscaping your backyard or tackling any other upgrade or renovation, a HELOC can help fund it.
Debt consolidation
Use a HELOC to combine high-interest credit cards or loans into one streamlined payment.
Education costs
A Home Equity Line of Credit can be used to cover education costs, such as tuition fees.
Unexpected expenses
From emergency medical bills to sudden car repairs, a HELOC provides a financial cushion that can help cover unexpected costs.
A home equity line of credit has a revolving balance. Think of it like a credit card - it allows you to borrow money, pay it back and borrow again. The interest rate on a HELOC is often variable, and you only pay interest on the amount you borrow.
A home equity loan is a fixed-term one where you receive an upfront lump sum. You make regular payments over time, and since they typically come with a fixed interest rate, monthly payments are predictable.
If you’re wondering if there’s a “How much HELOC can I get” calculator, you’ve come to the right place! Our calculator helps you get a feel for the maximum amount you can borrow.
That said maximum HELOC amounts depend on several factors, including your:
- Home’s value — the more valuable your home, the higher your potential credit line.
- Outstanding mortgage balance — the amount you owe on your current mortgage impacts how much equity you have left to borrow.
- Credit score — a strong credit score and solid financial history could mean higher credit limits.
- Debt-to-income ratio — your income compared to your debts helps assess your ability to repay.
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Disclaimers
1Rate home equity line of credit (HELOC) is an open-end product where the full loan amount (minus the origination fee) will be 100% drawn at the time of origination. The initial amount funded at origination will be based on a fixed rate; however, this product contains an additional draw feature. As the borrower repays the balance on the line, the borrower may make additional draws during the draw period. If the borrower elects to make an additional draw, the interest rate for that draw will be set as of the date of the draw and will be based on an Index, which is the Prime Rate published in the Wall Street Journal for the calendar month preceding the date of the additional draw, plus a fixed margin. Accordingly, the fixed rate for any additional draw may be higher than the fixed rate for the initial draw. This product is currently not offered in the states of New York, Kentucky, West Virginia, Delaware and Maryland. The HELOC requires you to pledge your home as collateral, and you could lose your home if you fail to repay. Borrowers must meet minimum lender requirements in order to be eligible for financing. Available for primary, second homes and investment properties only. Dependent on minimum credit score and debt-to-income requirements. Occupancy status, lien position and credit score are all factors to determine your rate and max available loan amount. Not all applicants will be approved. Applicants subject to credit and underwriting approval. Contact Rate for more information and to discuss your individual circumstances. Restrictions Apply.
2During Rate's Digital HELOC process, the borrower and/or Rate may need to communicate or facilitate the origination and closing of the borrower’s HELOC using non-digital methods, including but not limited to telephone or letter. There may be instances, due to borrower preference, applicable law, or other reasons, in which HELOC closing must occur in person. Additionally, Rate makes no representations and cannot guarantee that borrower’s HELOC will be serviced by a servicer that maintains an entirely digital process.
3Applications may be completed in five minutes but may fluctuate. Five business day funding timeline assumes closing the loan with our remote online notary. Funding timelines may be longer for loans secured by properties located in counties that do not permit recording of e-signatures or that otherwise require an in-person closing. In addition, funding timelines may be longer if we cannot readily verify that your property is in at least average condition with no adverse external factors with a property condition report and may need to order a desktop appraisal to confirm the value of your property. Texas borrowers will have a 12-day cooling period prior to closing on their home equity loan which will begin after the borrower has both filed a loan application and received consumer disclosures.