About the HELOC Calculator
A home equity line of credit (HELOC) is a revolving credit line secured by your home. This HELOC calculator first estimates how large a line you could get — lenders typically cap the combined loan-to-value (CLTV) of your mortgage plus the HELOC at around 80% to 90% of the home’s value — and then works out what you will pay on the amount you actually draw.
Most HELOCs have two phases. During the draw period (often 10 years) you can borrow as needed and usually only have to pay interest. When the repayment period starts (often 20 years), the balance is amortized and the payment jumps because you now repay principal as well. The calculator shows both payments, the size of that jump and total interest over the life of the line.
It is useful for homeowners comparing a HELOC with a home equity loan or cash-out refinance, or planning a renovation. HELOC rates are usually variable and tied to the prime rate, so the figures assume the rate you enter stays constant and that the full amount is drawn at the start.
With the default inputs, the draw-period payment (interest only) is $283.33. Change any value above to recalculate instantly.
How to use the heloc calculator
- 1Enter your home’s current value and what you still owe on the mortgage.
- 2Set the lender’s maximum CLTV (85% is common) to see your likely credit limit.
- 3Enter how much you plan to draw and the HELOC rate.
- 4Set the draw and repayment periods from your lender’s terms.
- 5Compare the interest-only payment with the higher repayment payment and plan for the jump.
Formula and method
The credit limit is the most a lender will let your total debt on the home reach — home value times the maximum combined loan-to-value — minus what you still owe on the first mortgage. During the draw period the minimum payment is interest only: the balance B times the monthly rate r (annual rate ÷ 12).
When the draw period ends, the balance is amortized over the repayment period of n months using the standard loan payment formula. Total interest is the interest-only payments for the draw period plus the interest portion of all repayment-period payments. The rate is assumed fixed for illustration, although most HELOCs are variable.
- B
- HELOC balance drawn
- r
- Monthly rate (annual rate ÷ 12 ÷ 100)
- n
- Repayment period in months
- CLTV
- (Mortgage balance + HELOC) ÷ home value
Worked examples
$40,000 drawn at 8.5%, 10-year draw, 20-year repayment
With a $400,000 home, $250,000 owed and an 85% CLTV cap, the line could be up to $90,000. Drawing $40,000 at 8.5% costs $283.33 a month interest-only for 10 years, then $347.13 a month for 20 years. Total interest is about $77,311.
$100,000 for a renovation at 9%, 10/15 structure
An 80% CLTV on a $600,000 home with $300,000 owed allows up to $180,000. A $100,000 draw at 9% is $750 a month interest-only, rising to $1,014.27 when a 15-year repayment period begins.
Requested draw above the limit
At 85% CLTV the lender allows at most $255,000 of total debt, so with $240,000 owed the limit is only $15,000 — half of the $30,000 requested. Drawing $30,000 would push CLTV to 90%.
Frequently asked questions
How much can I borrow with a HELOC?+
Lenders usually cap your combined loan-to-value at 80% to 90%. Multiply your home value by that percentage and subtract your mortgage balance: a $400,000 home with $250,000 owed and an 85% cap allows up to $90,000.
How are HELOC payments calculated?+
During the draw period most HELOCs require only interest on what you have borrowed, so the payment is the balance times the rate ÷ 12. In the repayment period the balance is amortized, so the payment includes principal and is noticeably higher.
What happens when the HELOC draw period ends?+
You can no longer borrow, and the balance converts to a repayment loan, typically over 10 to 20 years. Payments can rise sharply, so many borrowers pay down principal during the draw period or refinance before it ends.
Is a HELOC rate fixed or variable?+
Most HELOC rates are variable, usually the prime rate plus a margin, so payments change when rates move. Some lenders let you lock part of the balance at a fixed rate for a fee.
HELOC or home equity loan — which is better?+
A HELOC suits ongoing or uncertain costs because you borrow only what you need and pay interest only on that. A home equity loan suits a one-time expense and gives a fixed rate and fixed payment.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.