FinanceCalcs
HELOC Calculator
Calculate your available HELOC credit, draw period interest-only payments, and repayment period principal-and-interest payments — with a full month-by-month schedule and balance chart.
Works for any home value and mortgage balance — shows both draw period and repayment period payments side by side.
HELOC Calculator
Available Credit: $0
- Balance
- Cumulative Interest
"Your home is not just a place to live — it's your largest financial asset."
— Unknown
How a HELOC works
A Home Equity Line of Credit (HELOC) lets you borrow against the equity in your home — the difference between your home's current value and what you still owe on your mortgage. Unlike a home equity loan that delivers a lump sum upfront, a HELOC works more like a credit card: you draw funds as needed up to a set credit limit and only pay interest on what you borrow.
HELOCs have two distinct phases. During the draw period (typically 5–15 years), you can borrow and repay freely — and minimum payments are often interest-only. During the repayment period (typically 10–20 years), the line closes and you repay the outstanding balance in fully amortizing principal-and-interest payments, which can cause significant payment shock if you have only been making interest payments.
Most lenders limit your combined loan-to-value (CLTV) — your mortgage balance plus the HELOC — to 80–90% of your home's appraised value. The more equity you have and the stronger your credit, the better your rate and credit limit will be.
lightbulb Example HELOC Scenario
Suppose your home is worth $450,000 and you owe $280,000 on your mortgage. With a lender CLTV limit of 85%, your maximum combined borrowing would be $382,500 — leaving a maximum HELOC line of $102,500.
If you draw $60,000 at a 8.5% variable rate with a 10-year draw period and a 15-year repayment period, your interest-only draw period payment would be approximately $425/month. Once the repayment period begins, that payment jumps to roughly $590/month as you start paying down principal.
Understanding this payment transition in advance — and planning for the higher repayment period payment — is exactly what this calculator is designed to help with.
Many homeowners use a HELOC calculator to evaluate home improvement financing, compare it to a cash-out refinance, and understand the full repayment obligation before drawing funds.
HELOC Calculator FAQs
What is the difference between a HELOC and a home equity loan?
A home equity loan gives you a fixed lump sum at a fixed interest rate, repaid in equal monthly payments. A HELOC is a revolving line of credit with a variable rate — you draw what you need, when you need it, and only pay interest on the amount borrowed. HELOCs offer more flexibility; home equity loans offer more payment predictability.
What is payment shock and how do I avoid it?
Payment shock occurs when your HELOC transitions from the interest-only draw period to the fully amortizing repayment period — often causing monthly payments to double or more. To avoid surprises, use this calculator to see your estimated repayment period payment before you draw, and budget for that higher payment from the start.
Can I pay down my HELOC during the draw period?
Yes — and it is often a good strategy. Paying more than the interest-only minimum during the draw period reduces your outstanding balance, which lowers your repayment period payments and reduces total interest paid. Most HELOCs allow unlimited principal paydown during the draw period without penalty.
Is HELOC interest tax deductible?
HELOC interest may be tax deductible if the funds are used to buy, build, or substantially improve the home that secures the loan. It is generally not deductible if used for other purposes such as paying off debt or funding a vacation. Tax rules change — consult a tax professional for guidance specific to your situation.
HELOC terminology
Draw Period
The phase during which you can borrow from your HELOC — typically 5–15 years. You can draw, repay, and redraw funds up to your credit limit. Minimum payments are usually interest-only during this phase.
Repayment Period
After the draw period ends, the line closes and you enter repayment — making fully amortizing principal-and-interest payments for the remaining loan term, typically 10–20 years.
Combined Loan-to-Value (CLTV)
Your mortgage balance plus your HELOC balance, divided by your home's appraised value. Most lenders cap CLTV at 80–85%, though some go to 90% for well-qualified borrowers with strong credit.
Payment Shock
The significant increase in monthly payment when a HELOC transitions from interest-only draw period payments to fully amortizing repayment period payments. Planning for this increase before drawing is critical.
Variable Rate
HELOC rates are almost always variable, tied to the prime rate plus a lender margin. As the prime rate rises or falls, your interest rate — and monthly payment — adjusts accordingly.
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