How heloc is calculated
Available line = home value × assumed combined LTV cap − existing mortgage balance, floored at zero. Interest-only payments use the actual drawn amount, not the unused line.
Worked example
At $400,000 value and an 80% combined LTV cap, total secured borrowing is capped at $320,000. Subtracting a $240,000 mortgage leaves an $80,000 modeled line.
Home equity loan mode
Choose “Home equity loan” for a fixed-rate lump sum. The borrowing limit is the same: home value × maximum combined LTV − existing mortgage. The monthly payment is the level-payment formula M = P · r(1 + r)^n ÷ ((1 + r)^n − 1), with r = annual rate ÷ 12 and n = years × 12.
Points (a percentage of the loan) and the closing costs you count as finance charges reduce the amount financed. The APR is the annual rate that makes the present value of the payments equal that amount financed, so it is above the note rate whenever there are upfront charges.
Example: $50,000 at 8% for 15 years is $477.83 a month. One point ($500) plus $1,000 of closing costs leaves $48,500 financed, which puts the APR near 8.5%. On a $400,000 home with a $240,000 mortgage the combined LTV is 72.5%, inside an 80% cap.