HELOC Calculator
HELOC Payment Calculator
A Home Equity Line of Credit (HELOC) is a revolving credit line secured by the equity in your home. It allows you to borrow against the value of your property, using your home as collateral. HELOCs typically have two distinct phases: a draw period, during which you can borrow money and make interest-only payments, followed by a repayment period, during which you must repay the principal plus interest.
HELOCs differ from home equity loans in an important way. A home equity loan provides a lump sum of money with fixed monthly payments over a set term. A HELOC, on the other hand, works more like a credit card: you have a maximum credit limit and can draw funds as needed, paying interest only on the amount you actually borrow. This flexibility makes HELOCs ideal for ongoing expenses like home renovations, education costs, or as an emergency fund.
The amount you can borrow through a HELOC depends on your home's value, your outstanding mortgage balance, and the lender's maximum combined loan-to-value ratio. Most lenders allow a CLTV of 80% to 90%. HELOC interest rates are typically variable, tied to a benchmark index such as the prime rate plus a margin set by the lender.
For more information, see the Home Equity Loan Calculator.
Enter your current home value and the outstanding balance on your first mortgage. Enter the lender's maximum CLTV percentage, typically 80% to 90%. Enter the HELOC interest rate, which is the current index rate plus the lender's margin.
Enter the draw period length in years (typically 5 to 10) and the repayment period length (typically 10 to 20). During the draw period, you may have the option to make interest-only payments. During the repayment period, payments include both principal and interest.
If you know the specific HELOC amount you want, enter it. Otherwise, the calculator computes the maximum available. Press Calculate to see the maximum credit available, interest-only payment, and fully amortizing payment for the repayment period.
Maximum HELOC available based on the lender's maximum CLTV:
For example, a $500,000 home with $300,000 mortgage and 85% CLTV: $500,000 x 0.85 - $300,000 = $125,000 maximum HELOC.
The interest-only monthly payment during the draw period:
At the end of the draw period, the outstanding balance is amortized over the repayment period:
Available HELOC by home value (80% CLTV, $250K mortgage):
| Home Value | Equity | Max Combined Debt | Max HELOC |
|---|---|---|---|
| $350K | $100K | $280K | $30K |
| $400K | $150K | $320K | $70K |
| $500K | $250K | $400K | $150K |
| $750K | $500K | $600K | $350K |
Use a HELOC strategically, not as a substitute for an emergency fund. Because the lender can freeze or reduce your credit line, maintain a separate cash emergency fund of 3 to 6 months of expenses.
During the draw period, consider making payments above the interest-only minimum. Even small additional principal payments reduce the balance that must be amortized during the repayment period, significantly lowering the payment shock when the draw period ends.
HELOC interest may be tax-deductible if the funds are used to buy, build, or substantially improve your home. Consult a tax professional for guidance specific to your situation. Before the draw period ends, plan for the payment increase by considering refinancing into a fixed-rate home equity loan.
HELOC terms and LTV limits vary by lender and borrower credit profile. Your actual approved HELOC amount may differ from the estimate. Variable-rate HELOCs mean your payments can change over time if market rates rise.
Lenders have the right to freeze or reduce your HELOC credit line under certain conditions, such as a significant decline in your home's value or deterioration in your credit. This is called a HELOC freeze.
A Home Equity Line of Credit (HELOC) allows homeowners to borrow against the equity in their home. HELOCs typically have two phases: a draw period where you can access funds and make interest-only payments, followed by a repayment period where you must pay down the balance. Understanding how HELOCs work is crucial because the payment can increase dramatically when the repayment period begins, a phenomenon known as payment shock.
- What is a HELOC and how does it work?
- A Home Equity Line of Credit (HELOC) lets you borrow against your home equity up to a set limit. It has a draw period (5-10 years) where you pay interest only on what you use, followed by a repayment period (10-20 years).
- How is my HELOC payment calculated during the draw period?
- During draw, most HELOCs require interest-only payments: (Current Balance x Annual Rate) / 12. For example, $50,000 at 8% APR costs $333.33/month in interest.
- What happens when the HELOC draw period ends?
- You can no longer withdraw funds and payments switch to amortized principal + interest. A $50,000 balance at 8% over 15 years would be about $478/month, up from $333 interest-only.
- What factors affect my HELOC interest rate?
- Most HELOCs have variable rates tied to the prime rate. Key factors: the current prime rate, your credit score, LTV ratio, and lender. Rates typically range from prime - 0.5% to prime + 2%.
- What is the difference between a HELOC and a home equity loan?
- A HELOC is a revolving line of credit with variable rates and interest-only payments during draw. A home equity loan is a lump sum with fixed rates and fully amortizing payments from day one.
- Consumer Financial Protection Bureau. "What is a HELOC?" consumerfinance.gov.
- Federal Reserve. "Consumer Handbook on Adjustable-Rate Mortgages." federalreserve.gov.
- Investopedia. "Home Equity Line of Credit (HELOC)." investopedia.com.
- Bankrate. "HELOC Rates & Guidelines." bankrate.com.
- NerdWallet. "HELOC: Home Equity Line of Credit Guide." nerdwallet.com.
- IRS. "Publication 936: Home Mortgage Interest Deduction." irs.gov.
Last updated: May 12, 2026