HELOC Calculator
Estimate how much you can borrow with a home equity line of credit, plus your interest-only draw-period payment and your payment once repayment begins.
How a HELOC works
A home equity line of credit (HELOC) is a revolving credit line secured by your home. During the draw period (often 10 years) you can borrow, repay, and borrow again, and most HELOCs only require interest payments on what you've drawn. When the draw period ends, the line closes and the repayment period (often 20 years) begins: the balance is amortized, so you start paying principal and interest — which is why the payment can jump sharply.
How much can you borrow?
Lenders cap your combined loan-to-value (CLTV) — your mortgage plus the HELOC as a share of your home's value. Credit line = (home value × max CLTV) − mortgage balance. With a $400,000 home, an 85% CLTV limit, and $250,000 owed, the maximum line is $400,000 × 0.85 − $250,000 = $90,000. Your credit score, income, and debt-to-income ratio also affect the limit you're actually offered.
The formulas
Draw-period payment (interest-only) = balance × rate ÷ 12. Repayment-period payment uses the standard amortization formula: P × r(1+r)n ÷ [(1+r)n − 1], where r is the monthly rate and n is the number of repayment months. This calculator assumes you borrow the full amount at the start and carry it through the draw period.
Watch out for variable rates
Most HELOC rates are variable — typically the prime rate plus a margin — so your payment can rise or fall over time. Try a rate a couple of points higher than today's to see how a rate increase would affect your budget. For more detail, read how HELOC payments work.
Frequently asked questions
What's the difference between a HELOC and a home equity loan?
A home equity loan gives you a lump sum with a fixed rate and fixed payment from day one. A HELOC is a revolving line with a usually variable rate, interest-only payments during the draw period, and a higher amortizing payment afterward.
Why does my HELOC payment go up after the draw period?
During the draw period you typically pay only interest. Once repayment starts, you must pay down the principal over the remaining term, so the payment includes principal and interest and can be substantially higher.
Can I pay more than interest-only during the draw period?
Usually yes. Paying principal during the draw period lowers your balance, reduces interest, and shrinks the payment jump when repayment begins.
Is HELOC interest tax-deductible?
It can be when the funds are used to buy, build, or substantially improve the home securing the loan, subject to IRS limits. Interest on HELOC money used for other purposes generally isn't deductible. Check with a tax professional.