HELOC Calculator - Home Equity Line of Credit Payment Calculator

Home Value ($)

Current Mortgage Balance ($)

Max LTV (%)

Typically 80-85% combined LTV

Draw Amount ($)

Max available: $70,000

Interest Rate (%)

Variable rate (HELOC rates change)

Draw Period (years)

Repayment Period (years)

Payment During Draw Period

Most HELOCs allow interest-only during draw

Financial Disclaimer

This HELOC calculator provides estimates for educational purposes only and is not financial or lending advice. HELOC rates are variable and will change over time — your actual payments may be higher or lower than shown. Credit limits, rates, and terms vary by lender and depend on your creditworthiness, income, and property appraisal. Consult a licensed financial advisor or mortgage professional before making borrowing decisions secured by your home.

What is HELOC Calculator?

A Home Equity Line of Credit (HELOC) is a revolving credit line secured by your home equity, governed by the Truth in Lending Act (TILA) and Regulation Z. Unlike a home equity loan that provides a fixed lump sum, a HELOC lets you borrow, repay, and borrow again during a draw period — functioning similarly to a credit card but secured by your property. HELOCs typically have variable interest rates tied to the prime rate plus a margin determined by your creditworthiness, with a 5–10 year draw period followed by a 10–20 year repayment period. During the draw period, most HELOCs allow interest-only payments, meaning your monthly payment covers only the interest on the outstanding balance. When the draw period ends, you enter the repayment period where you must pay both principal and interest, often resulting in significantly higher monthly payments. Your credit limit is determined by your combined loan-to-value (CLTV) ratio — typically 80–85% of your home's appraised value minus your existing mortgage balance. Under the Credit CARD Act provisions that apply to HELOCs, lenders must provide 45 days' notice before significant rate changes, and you have the right to cancel within three business days of closing under TILA's right of rescission.

How to Use

Enter your current home value — use a recent appraisal or market estimate.
Input your remaining mortgage balance.
Set the maximum LTV percentage (typically 80-85% for combined loan-to-value).
Enter the amount you want to draw from your HELOC.
Set the current interest rate (HELOC rates are variable, usually Prime + margin).
Choose draw and repayment periods based on your lender's offerings.
Select interest-only or principal+interest payments during the draw period.
Click Calculate to see your credit limit, payments, and timeline.

Why Use This Tool?

Understand your maximum available credit based on home equity and CLTV

Compare interest-only vs principal+interest payment strategies

See how payments change between draw and repayment periods

Calculate total interest costs over the full HELOC term

Plan for potential rate changes (HELOC rates are variable)

Compare HELOC with cash-out refinance or home equity loan options

Tips & Best Practices

HELOC rates are variable — budget for potential rate increases of 1-2% above current rates
Interest-only payments keep costs low during draw but increase significantly at repayment
80% combined LTV is typical; some lenders allow up to 85-90% with higher rates
HELOCs work best for ongoing expenses (renovations, education, medical bills)
Home equity loans are better for one-time large expenses due to fixed rates
Some HELOCs offer rate locks or conversion to fixed-rate options on portions of the balance
Closing costs are typically lower than cash-out refinance ($0-$2,000 vs $3,000-$6,000)

Frequently Asked Questions

What is the difference between HELOC and home equity loan?

A HELOC is a revolving credit line (like a credit card) with variable rates and a draw period where you borrow as needed. A home equity loan is a fixed lump sum with fixed rates and immediate repayment of principal and interest. HELOCs offer flexibility; home equity loans offer predictability. Choose HELOC for ongoing needs; home equity loan for one-time expenses.

How is my HELOC credit limit determined?

Your credit limit is based on your equity and the lender's maximum combined LTV (CLTV). Formula: Home Value × Max CLTV − Current Mortgage = Maximum Credit Limit. Example: $400,000 home × 80% − $250,000 mortgage = $70,000 available. Lenders also consider credit score, income, and debt-to-income ratio.

Why are HELOC rates variable?

HELOC rates are typically tied to the prime rate (Prime + margin) as disclosed in your TILA agreement. When the Federal Reserve changes the federal funds rate, the prime rate adjusts, and your HELOC rate follows. If Prime is 8.5% and your margin is 0.5%, your rate is 9%. Rates can increase significantly over time, so budget for higher payments.

What happens after the draw period ends?

When the draw period ends, you can no longer borrow from the HELOC. You enter the repayment period where you must pay both principal and interest over 10–20 years. Payments often increase significantly if you made interest-only payments during draw. Some HELOCs require a balloon payment at the end of the draw period — check your loan agreement.

Can I pay off a HELOC early?

Yes, you can repay your HELOC balance at any time during the draw period, then re-borrow up to your credit limit. Many borrowers pay more than the minimum to reduce principal. Check for early closure fees (typically $300-$500 if closed within 2-3 years) or prepayment penalties with your lender.

What are typical HELOC closing costs?

HELOC closing costs are lower than mortgages: typically $0-500 for appraisal, $200-500 for title work, and possible annual fees ($50-100). Many lenders offer no-closing-cost HELOCs with slightly higher rates or early closure fees. Compare total costs when choosing a lender.

What does this calculator not cover?

This calculator does not cover HELOC tax deductibility (interest is only deductible under IRC § 163(h) when funds are used to buy, build, or substantially improve the home), rate caps and floors, balloon payment scenarios, fixed-rate conversion options, interest-only repayment period calculations, or the effect of home value changes on your credit limit. It also does not model variable rate changes over time. Consult a licensed mortgage professional for personalized guidance.

Real-world Examples

$50,000 HELOC with interest-only draw period

A homeowner with a $400,000 home and $250,000 mortgage takes a $50,000 HELOC at 8.5% variable rate. They choose a 10-year interest-only draw period and 20-year repayment period.

$30,000 HELOC with principal+interest from start

A homeowner borrows $30,000 on a HELOC at 8.0% with a 10-year draw and 10-year repayment, choosing principal+interest payments from the start.

How this is calculated

HELOC payments are calculated using standard amortization formulas, with different rules for draw and repayment periods:

Credit limit: Home Value × Max CLTV% − Current Mortgage Balance. Most lenders cap CLTV at 80–85%.
Interest-only draw period: Monthly payment = Outstanding balance × (Annual rate / 12). Principal does not decrease.
Principal+interest draw period: Standard amortization over the total term (draw + repayment years). Monthly payment = P × [r(1+r)^n] / [(1+r)^n − 1].
Repayment period (after interest-only draw): The remaining balance is amortized over the repayment period. Monthly payment = Balance × [r(1+r)^n] / [(1+r)^n − 1], where n = repayment months.
Total interest: For interest-only: (draw period interest) + (repayment period interest). Draw interest = monthly payment × draw months. Repayment interest = (monthly payment × repayment months) − balance.
Variable rate note: This calculator uses a fixed rate for simplicity. Actual HELOC rates adjust with the prime rate and can change monthly.

Sources

Based on TILA/Reg Z and standard amortization · Last updated June 2026

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