Find Out Exactly How Much HELOC You Qualify For

Multiply your home's current market value by your lender's max LTV — typically 80%–85% — then subtract your remaining mortgage balance. On a $400,000 home with a $220,000 mortgage at 85% LTV: $400,000 × 0.85 − $220,000 = $120,000 available credit line. The calculator above does this automatically. Credit unions often allow up to 90% CLTV for well-qualified borrowers.

With prime rate at 7.50% in May 2026, a competitive HELOC rate is prime plus 0.50%–0.75% — roughly 8.00%–8.25% for well-qualified borrowers with FICO scores above 740 and CLTV below 75%. Most borrowers see rates between 8.5% and 10.5%. Shopping three or more lenders — particularly a local credit union — typically yields better terms than your existing bank. Use our HELOC rate calculator to model how rate differences affect monthly cost.

A HELOC is a revolving credit line — you borrow what you need, when you need it, during a 5–10 year draw period, and pay interest only on the outstanding balance. A home equity loan gives you a fixed lump sum at a fixed rate with fixed monthly payments from day one. HELOCs suit phased or uncertain-cost projects (renovations, tuition); home equity loans work better for one-time expenses where payment predictability matters. See our full comparison for a side-by-side breakdown.

Most lenders require at least 15–20% equity remaining after the HELOC is established — meaning your CLTV cannot exceed 80–85%. Beyond equity, lenders evaluate your credit score (620 minimum, 700+ for best rates), debt-to-income ratio (typically under 43%), and payment history. Lenders also order an appraisal or AVM to confirm current market value — which can work in your favor if local prices have risen since purchase.

After your draw period ends (typically 5–10 years), you enter the repayment period — typically 10–20 years — during which you can no longer draw and must pay both principal and interest. If you've been making interest-only minimums, this transition can substantially increase your monthly payment. On a $100,000 balance at 8.25%, the jump from interest-only ($688/mo) to a 20-year amortizing payment ($862/mo) adds $174 per month. Use our HELOC payoff calculator to plan ahead.

Yes — and it's one of the most common uses. With average credit card APRs near 21% versus HELOC rates around 8–9%, the interest savings on a $40,000 balance can exceed $5,000 per year. The critical risk: you're converting unsecured debt into debt secured by your home. If you run the cards back up after consolidating, you've created a considerably more dangerous situation. This strategy works best for borrowers who have also addressed the spending patterns that created the debt.

HELOC interest is deductible only when funds are used to buy, build, or substantially improve the home securing the loan — per IRS rules since the 2017 Tax Cuts and Jobs Act. Using a HELOC for debt consolidation, vacations, or personal expenses does not qualify. The deduction applies to combined mortgage debt up to $750,000 for loans originated after December 15, 2017. Always consult a tax professional to confirm eligibility for your situation.

If your home's value drops enough to push your CLTV above the lender's limit, they can legally freeze or reduce your credit line — even with a perfect payment record. This happened broadly in 2008–2009 when many homeowners found their HELOCs suspended. Your home equity position is worth monitoring regularly, especially in markets where prices have risen sharply. This is also why financial advisors caution against using a HELOC as your primary emergency fund.