Line of Credit Calculator

Line of Credit Definition

If you are needing a loan, you may consider getting a line of credit. To determine how much of a line of credit you may qualify for, you can use our calculator to see how much you might be able to receive. The main determining factor in the amount you are able to receive is based on a certain percentage of your home’s value.

How Much Can I Receive?

If you have a home that is worth a lot, then you will most likely be approved for a larger line of credit. If your home is not worth as much, you will most likely be approved for a smaller line of credit instead. However, there are other determining factors that are taken into consideration when your line of credit is calculated.

If there are any outstanding mortgages on your home, these will also affect the calculation. These can include both first and second mortgages as well as any other debts that might be secured by the home.

What Information Do I Need to Put Into the Calculator?

• Home Value
• Total Mortgages Owed
• Loan to Value Ratio

Home Value

This value will be the current appraised value of your home. If it has been a while since you purchased your home, it might be worth more than when you first bought it. Or when the economy is in shambles you may find that your home is worth far less than you paid.

Total Mortgages Owed

This number should represent the total amount of mortgages that you currently owe on your home. This amount needs to include both first and second mortgages as well as any other debts that are secured by the home.

Loan to Value Ratio

The loan to value ratio is a percentage of your home’s appraised worth that your lender will allow.

It is calculated as follows:

Loan To Value = Mortgage Amount / Property Value

The loan to value ratio is the total amount of the mortgage divided by the appraised value of the home. Click here if you would like to check out a separate LTV calculator. Keep in mind that the total debt allowed by your lender will also need to include any outstanding mortgages and the line of credit you are approved for.

When using our calculators, keep in mind that they are to be viewed as self-help tools only. They are not provided for or intended to be investment advice. Our website cannot guarantee the accuracy of the calculators in regards to your individual circumstances.

How to Calculate Line of Credit

Let's be honest - sometimes the best line of credit calculator is the one that is easy to use and doesn't require us to even know what the line of credit formula is in the first place! But if you want to know the exact formula for calculating line of credit then please check out the "Formula" box above.

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