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TD Home Equity Loan Formula:
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The TD Home Equity Loan Calculator helps Canadian homeowners determine how much they can borrow against their home's equity. It calculates the maximum loan amount based on your home's value, current mortgage balance, and the loan-to-value ratio allowed by TD Bank.
The calculator uses the TD home equity loan formula:
Where:
Explanation: The formula calculates your available equity by multiplying your home value by the maximum LTV ratio, then subtracts your existing mortgage balance to determine how much you can borrow.
Details: Accurate home equity calculation is crucial for financial planning, debt consolidation, home renovations, or major purchases. It helps you understand your borrowing capacity while maintaining responsible debt levels.
Tips: Enter your home's current market value in CAD, the LTV ratio (typically 0.80 for TD Canada Trust), and your current mortgage balance. All values must be positive numbers with LTV between 0 and 1.
Q1: What is the typical LTV ratio for TD home equity loans?
A: TD typically allows up to 80% LTV for home equity loans, meaning you can borrow up to 80% of your home's value minus your existing mortgage balance.
Q2: How is home value determined for equity calculations?
A: TD will typically use a current appraisal or assessment to determine your home's market value for loan purposes.
Q3: Can I borrow more than my calculated equity?
A: No, Canadian regulations generally limit home equity borrowing to 80% of your home's value to protect both lenders and borrowers.
Q4: What costs are associated with home equity loans?
A: There may be appraisal fees, legal fees, and potential discharge fees for your existing mortgage. Interest rates are typically higher than primary mortgages.
Q5: How does this differ from a home equity line of credit (HELOC)?
A: A home equity loan provides a lump sum with fixed payments, while a HELOC offers revolving credit with variable rates and flexible repayment options.