How much can I borrow against my home?

Less than your equity, usually by a lot. On a 500,000 home with 250,000 owed, the equity is 250,000 but the available credit at an 80% combined ceiling is 150,000. The ceiling applies to every loan secured by the house added together, so the existing mortgage consumes part of it before the line takes anything.

Why is 100,000 of my equity not borrowable?

Because the ceiling is a share of the home value, not of the equity, and the existing mortgage is counted inside it. At 80% of 500,000 the total allowed is 400,000; 250,000 of that is already lent, leaving 150,000 for the line, and the remaining 100,000 of equity sits outside what any lender will take as security at that ceiling.

What happens when the draw period ends?

The balance is recast over the repayment period, and the payment rises because it now has to repay principal as well as interest. On a fully drawn 150,000 line at 8.5%, the interest-only payment is 1,062.50 and the recast payment is 1,301.73 — an increase of 239.23 that arrives on a fixed date. It is not a penalty and not a rate change; it is the end of the interest-only structure.

How much interest does the line cost in total?

On the default case, 289,918.14 across both phases — 127,500 during the ten-year draw period and 162,418.14 during the twenty-year repayment period. That is roughly 1.9 times the amount borrowed, and it is the reason the interest-only phase is better understood as a deferral than as a saving.

Is the payment during the draw period really interest only?

That is the assumption this model makes, and it is one of several structures a line can have. The consequence is that the balance does not fall during the draw period, so the entire amount has to be repaid afterwards. A line that requires principal payments during the draw period would leave a smaller balance to recast, and this page would overstate both the recast payment and the total interest.

Why is the ceiling an input rather than a fixed number?

Because it is set by lenders and programmes rather than by statute, and it varies. The default of 80% is common but not universal, and the difference between a 70% and a 90% ceiling on the same house is 100,000 of available credit in the default case — which is why the table shows three ceilings instead of asserting one.

What if the rate goes up?

This model holds it fixed, which is a real limitation because home equity lines are typically variable. A rise moves both phases, and it moves the recast payment more, because that payment is repaying principal over a fixed remaining period. And no currency is attached to any figure.

HELOC Calculator

Result

150,000.00

Credit available to you

Maximum total debt allowed: 400,000.00
Your equity now: 250,000.00
Equity you cannot borrow against: 100,000.00
Combined loan-to-value now (%): 50.00%
Interest-only payment: 1,062.50
Payment during the repayment period: 1,301.73
Increase when the payment steps up: 239.23
Interest paid during the draw period: 127,500.00
Interest paid during the repayment period: 162,418.14
Total interest: 289,918.14

The number a HELOC calculator is built around is not how much equity you have. It is how much of it a lender will let you borrow against, and the two are far apart. On a 500,000 home with 250,000 still owed, the equity is 250,000 — but at a combined loan-to-value ceiling of 80% the total debt allowed against the property is 400,000, and 250,000 of that is already used. The available credit is 150,000, and 100,000 of the equity is not borrowable at all under that ceiling. That gap is the whole point of the first three columns: the ceiling applies to every loan secured by the house added together, not to the new one alone, so an existing mortgage eats into the line before a single dollar is drawn. The second half of the page is about what the line costs once it exists, and it has two phases with very different payments. During the draw period the model assumes interest-only payments: on a fully drawn 150,000 line at 8.5% that is 1,062.50 a month, and none of it reduces the balance. When the draw period ends, the same balance is recast over the repayment period, and the payment becomes 1,301.73 — a 239.23 increase that arrives on a fixed date and does not depend on anything the borrower does. That step is not a penalty and not a rate change; it is the interest-only structure ending, which is why the federal rules require the lender to say so in writing before the account is opened, including the possibility that a balloon payment results. The table below runs the ceiling from 70% to 90% so that the first column of the answer — how much is actually available — is visible as a policy choice rather than a property of the house.

500,000 home with 250,000 owed, by combined loan-to-value ceiling

Ceiling (%)	Maximum total debt	Available credit	Interest-only payment	Recast payment
70	350000	100000	708.33	867.82
80	400000	150000	1062.5	1301.73
90	450000	200000	1416.67	1735.65

The home, the debt and the rate are identical across the three rows; only the ceiling moves, which is what makes the third column readable as a policy decision rather than a property of the house. Going from 70% to 90% doubles the available credit from 100,000 to 200,000 and doubles the interest-only payment with it, from 708.33 to 1,416.67. The fourth and fifth columns are the pair to read together: at every ceiling the recast payment is about 23% above the interest-only one, and that ratio does not depend on how much is borrowed — it depends only on the rate and the length of the repayment period.

Formula

Maximum total debt = home value × combined loan-to-value ceiling ÷ 100. Available credit = maximum total debt − existing mortgage balance. Equity = home value − existing mortgage balance. Interest-only payment = drawn amount × annual rate ÷ 12. Repayment payment = the amortising payment on the same balance over the repayment period.

V: Home value
B: Existing mortgage balance still owed
c: Combined loan-to-value ceiling, as a percentage of home value
D: Amount drawn on the line
r: Annual rate on the line, as a percentage
n: Length of the draw period, in months
m: Length of the repayment period, in months

Use it before applying, not after, because the number that decides whether the line is worth opening is the third one and it is not the one people estimate. Enter the home value and what is still owed, then move the ceiling: the difference between a 70% ceiling and a 90% ceiling on the same house is 100,000 of available credit in the default case, and which of the two applies is a matter of lender policy and programme rather than anything about the property. Then look at the two payments together rather than the first alone. The interest-only figure is the one that fits the budget during the draw period, and the recast figure is the one that has to fit afterwards; a line that is affordable at 1,062.50 and not at 1,301.73 is a line that will be a problem on a date you can already see. Finally, change the draw period and watch the total interest move — a longer draw period is not free, it is just deferred.

Worked examples

500,000 home, 250,000 owed, 80% ceiling
1. Maximum total debt: 500,000 × 80% = 400,000
2. Available credit: 400,000 − 250,000 = 150,000
3. Equity: 500,000 − 250,000 = 250,000, of which 100,000 cannot be borrowed against at this ceiling
4. Current combined ratio: 250,000 ÷ 500,000 = 50%
5. Interest-only payment on a full draw: 150,000 × 8.5% ÷ 12 = 1,062.50, for 120 months = 127,500 of interest
6. Recast payment: 150,000 at 8.5% over 240 months = 1,301.73, carrying 162,418.14 of interest
7. Total interest across both phases: 289,918.14
The default case, and the one that separates equity from borrowing power: 250,000 of equity buys a 150,000 line. The gap is not a fee or a haircut, it is the ceiling applying to the whole debt stack — the existing mortgage is already using 250,000 of the 400,000 allowed, and the line can only have what is left. Note also that the two phases together cost 289,918.14 in interest, which is 1.9 times the amount borrowed.
The same line on a home owned outright
1. Maximum total debt: 500,000 × 80% = 400,000, unchanged by the mortgage
2. Available credit: 400,000 − 0 = 400,000
3. Equity: 500,000, of which 100,000 still cannot be borrowed against
4. Interest-only payment on a full draw: 400,000 × 8.5% ÷ 12 = 2,833.33
5. Recast payment: 400,000 at 8.5% over 240 months = 3,471.29
6. Total interest: 339,999.60 during the draw period and 433,111.49 afterwards
The ceiling does not move when the mortgage disappears, and neither does the 100,000 that is never borrowable — 80% is 80% of the value, not of the equity. What changes is that the whole 400,000 is available, and the payments scale with it: the interest-only figure goes from 1,062.50 to 2,833.33. This is the cleanest way to see that the ceiling is a rule about the property, while the available credit is a rule about how much of the property is already pledged.
The same house under a 70% ceiling
1. Maximum total debt: 500,000 × 70% = 350,000
2. Available credit: 350,000 − 250,000 = 100,000
3. Equity not borrowable at this ceiling: 250,000 − 100,000 = 150,000
4. Interest-only payment: 100,000 × 8.5% ÷ 12 = 708.33
5. Recast payment: 100,000 at 8.5% over 240 months = 867.82
6. Total interest: 193,278.65 across both phases
Ten percentage points of ceiling removes 50,000 of available credit, and nothing about the house or the borrower changed. The interest-only payment falls to 708.33 and the recast to 867.82, so the line also becomes cheaper in absolute terms — but the reason to read this case is the third step: 150,000 of equity is now locked away, which is 60% of everything the owner has in the property.

Limitations

The combined loan-to-value ceiling is an input rather than a rule, because it is set by lenders and programmes rather than by statute, and the default of 80% is a common figure rather than the figure you will be offered; the first column of the answer moves by tens of thousands across the range of ceilings in normal use. The model assumes the line is drawn in full on the first day and left that way, which is the worst case for interest and therefore an upper bound — a borrower who draws gradually, or not at all, pays less. It assumes interest-only payments during the draw period, which is one of several structures a line can have; a line requiring principal payments during the draw period behaves differently and would not leave the same balance to be recast. It assumes the rate is fixed, whereas home equity lines are typically variable, which makes the second phase the least predictable part of the answer. It does not model the annual fee some lenders charge for an unused line, closing costs, or the interest-only period being renewed. Whether interest on the line is deductible is a tax question this page does not touch. And no currency is attached to any figure.

Frequently asked questions

How much can I borrow against my home?: Less than your equity, usually by a lot. On a 500,000 home with 250,000 owed, the equity is 250,000 but the available credit at an 80% combined ceiling is 150,000. The ceiling applies to every loan secured by the house added together, so the existing mortgage consumes part of it before the line takes anything.
Why is 100,000 of my equity not borrowable?: Because the ceiling is a share of the home value, not of the equity, and the existing mortgage is counted inside it. At 80% of 500,000 the total allowed is 400,000; 250,000 of that is already lent, leaving 150,000 for the line, and the remaining 100,000 of equity sits outside what any lender will take as security at that ceiling.
What happens when the draw period ends?: The balance is recast over the repayment period, and the payment rises because it now has to repay principal as well as interest. On a fully drawn 150,000 line at 8.5%, the interest-only payment is 1,062.50 and the recast payment is 1,301.73 — an increase of 239.23 that arrives on a fixed date. It is not a penalty and not a rate change; it is the end of the interest-only structure.
How much interest does the line cost in total?: On the default case, 289,918.14 across both phases — 127,500 during the ten-year draw period and 162,418.14 during the twenty-year repayment period. That is roughly 1.9 times the amount borrowed, and it is the reason the interest-only phase is better understood as a deferral than as a saving.
Is the payment during the draw period really interest only?: That is the assumption this model makes, and it is one of several structures a line can have. The consequence is that the balance does not fall during the draw period, so the entire amount has to be repaid afterwards. A line that requires principal payments during the draw period would leave a smaller balance to recast, and this page would overstate both the recast payment and the total interest.
Why is the ceiling an input rather than a fixed number?: Because it is set by lenders and programmes rather than by statute, and it varies. The default of 80% is common but not universal, and the difference between a 70% and a 90% ceiling on the same house is 100,000 of available credit in the default case — which is why the table shows three ceilings instead of asserting one.
What if the rate goes up?: This model holds it fixed, which is a real limitation because home equity lines are typically variable. A rise moves both phases, and it moves the recast payment more, because that payment is repaying principal over a fixed remaining period. And no currency is attached to any figure.

References

12 CFR 1026.40 — Requirements for home equity plans: the disclosure rules for open-end credit secured by a dwelling, including the requirement at (d)(5)(ii) to state that a balloon payment may result if paying only the minimum periodic payments would not fully amortise the balance by a specified date — Electronic Code of Federal Regulations, United States
What is a home equity line of credit (HELOC)? — the regulator's explanation of the draw period, the repayment period and how the two differ — Consumer Financial Protection Bureau (United States)
What is a loan-to-value ratio? — the regulator's definition of the ratio and of the combined ratio once a second lien is added — Consumer Financial Protection Bureau (United States)

Related calculators

Mortgage CalculatorMonthly repayments, total interest and a full amortisation schedule.Loan CalculatorRepayment amounts for any fixed-rate loan.Amortization CalculatorFull amortisation schedule with the interest each period.Loan Repayment CalculatorHow long a loan takes to clear at a fixed monthly payment.