HELOC Calculator
Calculate your home equity line of credit — available credit, interest-only payments during the draw period, and amortized payments in repayment.
How to use this calculator
Enter your home's current value, your existing mortgage balance, the lender's CLTV cap (usually 80-90%), and how much you plan to draw. The calculator shows available credit, interest-only monthly payments during the draw period, and the amortizing payment once you enter repayment.
When a HELOC makes sense
HELOCs work best for predictable, value-adding home improvements (kitchen remodel, new roof, solar installation) where you want flexibility on timing. The variable rate is tolerable when the usage period is short and the draw pays down quickly. They also work as a backup line of credit for emergencies — approved but unused costs nothing.
When a HELOC is a bad idea
Paying for a depreciating asset (a car, a vacation) with a HELOC trades flexible unsecured debt for debt that can take your house if you miss payments. Similarly, using a HELOC to invest or start a business is usually higher risk than it looks. Using HELOC to consolidate credit card debt makes mathematical sense, but only if you've addressed what caused the credit card debt in the first place — otherwise you'll rack it up again while adding new secured debt.
The draw-period trap
During the 10-year draw period, your payment covers only interest. Many borrowers treat this low payment as sustainable, until the repayment phase begins and the required monthly payment can double or triple. Plan ahead: know what the amortized payment will be, and budget for it from day one. Better yet, pay some principal voluntarily during the draw period.
Rates and what to compare
HELOC rates are typically prime + a margin, where the margin depends on your credit and the lender. Shop at least 3-5 lenders — credit unions often have the lowest margins, online lenders compete on fees, and your existing mortgage servicer sometimes offers loyalty discounts. Always ask about closing costs, annual fees, and early-closure penalties.
Frequently asked questions
How is a HELOC different from a home equity loan?▾
A home equity loan is a lump-sum second mortgage with a fixed rate and fixed term. A HELOC is a revolving credit line — you draw what you need, when you need it, and only pay interest on what you've actually drawn. HELOCs almost always have variable rates tied to the prime rate.
What's a typical HELOC structure?▾
The standard US HELOC has a 10-year 'draw period' during which you can borrow and make interest-only payments, followed by a 15-20 year 'repayment period' during which you can no longer draw and must pay back principal plus interest on an amortizing schedule.
Why does CLTV matter?▾
Combined loan-to-value (CLTV) is the ratio of all mortgages (first + HELOC) to your home's value. Most lenders cap HELOCs at 80-85% CLTV. On a $500,000 home with a $200,000 first mortgage, an 85% cap means $425,000 total loans allowed, leaving $225,000 of HELOC room.
Is HELOC interest still tax-deductible?▾
Under the 2017 Tax Cuts and Jobs Act, HELOC interest is only deductible if the funds are used to buy, build, or substantially improve the home securing the loan — and only for mortgage debt up to $750,000. Using a HELOC for unrelated expenses (cars, vacations, debt consolidation) does NOT qualify for the deduction.
What are the risks of a HELOC?▾
Your home is collateral — default can lead to foreclosure. Variable rates can rise sharply (prime + 1-2% is typical), meaning payments that feel manageable today can jump significantly. The interest-only draw period can mask how much you've borrowed; many HELOC users are surprised when the repayment phase starts and payments double or triple.
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