HELOC Calculator
A Home Equity Line of Credit lets you borrow against your equity. Calculate your interest-only draw period payments, repayment period payments, and total cost before you apply.
1 Home Equity
2 HELOC Terms
Draw Period Payment
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interest-only for 10 years
Repayment Period Payment
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principal + interest for 20 years
Amount Borrowed
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Total Interest
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Total Cost
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Combined LTV
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max 85% to qualify
Balance & Cumulative Interest Over Time
How a HELOC Works
A HELOC has two phases. During the draw period (typically 10 years), you can borrow up to your limit and pay interest only. During the repayment period (typically 20 years), you pay back principal plus interest — often causing payment shock.
Most lenders allow up to 85% combined LTV (your mortgage + HELOC ÷ home value). The rate is variable and tied to the prime rate — it can rise over time.
- ✓ Flexible draw and repay on your schedule
- ✓ Often lower rate than personal loans or credit cards
- ✗ Variable rate means payments can rise
- ✗ Your home is collateral — defaulting risks foreclosure
HELOC vs Cash-Out Refinance
A cash-out refinance replaces your existing mortgage with a larger one at a new rate, giving you the difference in cash. A HELOC is a second lien that doesn't touch your first mortgage.
Key trade-offs:
- Cash-out refi — fixed rate, one payment, closing costs ~2–5% of loan, replaces your rate
- HELOC — variable rate, flexible draws, lower upfront costs, keeps existing mortgage
If you have a low fixed rate you don't want to lose, a HELOC preserves it. Use the Refinance Calculator to compare the cash-out refi option.
Related Calculators
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Affordability Calculator
Find out how much house you can afford based on your income and debts.
Refinance Calculator
Calculate your monthly savings and break-even point for refinancing.
Loan Calculator
Calculate monthly payments and amortization for any fixed-rate loan.
Frequently Asked Questions
How much can I borrow with a HELOC?
Lenders usually allow a combined loan-to-value of 80–85%. With a $400,000 home and a $250,000 mortgage, 85% CLTV allows total debt of $340,000, so a credit line of up to $90,000.
How are HELOC payments calculated?
During the draw period (often 10 years) many HELOCs require interest-only payments: a $50,000 balance at 8.5% costs about $354 a month. In the repayment period (often 20 years) you repay principal too, and the same balance costs about $434 a month.
Is a HELOC rate fixed or variable?
Most HELOCs are variable, set at the prime rate plus a margin, so payments change when the Fed moves rates. Some lenders let you lock part of the balance at a fixed rate.
Is HELOC interest tax deductible?
Under current IRS rules, only if the money is used to buy, build or substantially improve the home that secures the loan, and you itemize deductions.