HELOC Calculator
Estimate your available equity and your draw-period vs. repayment-period payments.
Your home and existing mortgage
Typically 80-85%.
Usually variable, tied to the prime rate.
Interest-only period.
Fully-amortizing period after the draw period ends.
Available equity (your credit limit)
$140,000
Draw used: $50,000
During the draw period (interest-only)
Monthly payment
$354.17
Total interest paid
$42,500
During the repayment period (amortizing)
Monthly payment
$433.91
Total interest paid
$54,139
Total interest over the life of the HELOC
$96,639
Estimate calculated from the numbers you entered. This is not financial, tax, or legal advice — always consult a qualified professional before making significant financial decisions.
How the HELOC Calculator works
This tool estimates your available home equity line of credit based on your lender's maximum combined loan-to-value ratio, then projects both your interest-only payment during the draw period and your fully-amortizing payment once repayment begins.
The formula
Available equity = (Home value × Max CLTV%) − Current mortgage balanceDuring the draw period, the payment is interest-only on the amount you've actually drawn. During repayment, that drawn amount amortizes like a standard installment loan over the remaining years.
Worked example
A home worth $500,000 with a $310,000 mortgage, at a lender allowing 85% combined loan-to-value: $500,000 × 85% = $425,000, minus the $310,000 already owed, leaves $115,000 of available equity. Drawing $60,000 at 8.5% costs $60,000 × 8.5% ÷ 12 = $425 a month during the draw period — interest only, with the balance untouched.
That $425 is the number people budget around, and it's the trap. Nothing has been repaid: after a 10-year draw period you still owe the full $60,000, having paid roughly $51,000 in interest. When repayment begins, the payment jumps to whatever amortizes $60,000 over the remaining term — often two to three times the interest-only figure. Plan for the second number, not the first.
Common mistakes
- Budgeting only for the low interest-only payment and getting surprised when repayment starts and the payment jumps.
- Assuming the rate stays fixed for the life of the line — most HELOCs are variable.
- Drawing the full available line at once when you only need part of it — interest only accrues on what you actually draw.
Frequently asked questions
How much can I actually borrow with a HELOC?
Lenders set a maximum combined loan-to-value (CLTV) ratio — typically 80-85% of your home's value. Your available credit line is that CLTV limit minus whatever you still owe on your first mortgage. For example, an $85% CLTV limit on a $400,000 home allows $340,000 in total secured debt; if you owe $200,000 on your mortgage, you have $140,000 in available HELOC equity.
Why does my payment change so much after the draw period ends?
Most HELOCs are interest-only during the draw period (commonly 10 years) — you only pay interest on what you've drawn, so the payment can look deceptively low. Once the draw period ends, the outstanding balance switches to a fully-amortizing repayment period (commonly 15-20 years), and the payment jumps to include principal too. This calculator shows both payments so the jump doesn't come as a surprise.
Is a HELOC rate fixed or variable?
Most HELOCs carry a variable rate tied to the prime rate plus a lender margin, meaning your payment can rise or fall over the draw period as the prime rate moves. This calculator uses a single rate you enter as a snapshot — if your real HELOC is variable, treat the result as a point-in-time estimate, not a locked-in payment.
What can I use a HELOC for?
Common uses include home improvements (which may also preserve mortgage-interest tax deductibility, subject to IRS rules), debt consolidation, or as a financial cushion. Because it's secured by your home, missing payments puts your home at risk — treat it with the same seriousness as your primary mortgage.
What actually moves this number
Specific levers, and roughly what each one is worth. Not “save more” — the things that change the figure above by an amount you can measure.
Model the payment at the repayment-period reset
The interest-only draw period ends and the payment often doubles or more when principal starts amortizing. That number, not today's payment, is the one you must be able to make.
Ask about the lifetime rate cap
HELOC rates are variable and tied to prime. The contract has a ceiling; find it, compute the payment there, and treat that as the real worst case rather than assuming rates stay put.
Remember the collateral is your house
Consolidating card debt into a HELOC lowers the rate and converts unsecured debt into secured debt. That is a genuine improvement on interest and a genuine increase in what failure costs you.
Deductibility depends on what you spend it on
Interest is generally deductible only where the proceeds buy, build, or substantially improve the home securing the loan — and only if you itemize. Using it for a car or a vacation does not qualify.
What this calculator does not cover
Every calculator simplifies, and the useful thing is knowing exactly where. These are the specific gaps between this estimate and your real situation:
- HELOC rates are variable and typically tied to the prime rate. A payment that is comfortable today can change materially over a ten-year draw period.
- The transition from the interest-only draw period to the repayment period is where payments jump sharply — often by a factor of two or more.
- Your home is the collateral. Unlike credit card debt, failing to repay a HELOC puts the house at risk.
- Deductibility of the interest depends on whether the proceeds were used to buy, build, or substantially improve the home securing the loan, and only if you itemize.
For anything that turns on an exact figure, use the primary sources below or a qualified professional. How these limits are decided and disclosed is described in the editorial standards.