HELOC Calculator
Calculate your Home Equity Line of Credit payments for both the draw period and repayment period.
How to Use the HELOC Calculator
Step 1: Enter your home's current market value and your remaining mortgage balance. The calculator uses these to determine your total home equity and maximum available credit line at 85% combined loan-to-value.
Step 2: Enter the credit line amount you want to use, your annual interest rate, and your draw period length. During the draw period you make interest-only payments on the amount drawn.
Step 3: Select your repayment period — the number of years after the draw period ends during which you repay the principal plus interest in fixed monthly installments.
Step 4: Click Calculate to see your draw period payment, repayment period payment, total interest cost, and a complete year-by-year schedule. Download the free PDF to share with your lender or financial advisor.
Example Calculation
Scenario: Home Value: $450,000 | Mortgage Balance: $230,000 | Credit Line: $50,000 | Rate: 8.0% | Draw Period: 10 years | Repayment Period: 20 years
During the 10-year draw period you pay interest only. Once the repayment period begins your payment increases to cover both principal and interest.
Frequently Asked Questions
Q1: What is a HELOC and how does it work?
A HELOC (Home Equity Line of Credit) is a revolving credit line secured by your home equity. Unlike a home equity loan which gives you a lump sum a HELOC works like a credit card — you draw funds as needed up to your credit limit during the draw period typically 5 to 15 years. During the draw period you usually make interest-only payments. After the draw period ends the repayment period begins and you pay both principal and interest in fixed monthly installments.
Q2: How is a HELOC different from a home equity loan?
A HELOC is a revolving line of credit with variable interest rates — you borrow what you need when you need it and only pay interest on the amount drawn. A home equity loan provides a fixed lump sum at a fixed interest rate with equal monthly payments from day one. HELOCs are better for ongoing expenses like home renovations where costs occur over time. Home equity loans suit large one-time expenses where you need a specific amount immediately.
Q3: What is the CLTV ratio and why does it matter?
CLTV stands for Combined Loan-to-Value ratio — it is your total mortgage debt (primary mortgage plus HELOC) divided by your home's appraised value. Most lenders require a CLTV below 85% to qualify for a HELOC. A lower CLTV means more equity and lower risk for the lender which typically results in better interest rates. For example on a $450,000 home with a $230,000 mortgage and a $50,000 HELOC the CLTV is 62.2% which is excellent.
Q4: What happens at the end of the HELOC draw period?
When the draw period ends your HELOC enters the repayment period. You can no longer draw funds and must repay the outstanding balance in fixed monthly installments over the repayment period — typically 10 to 20 years. Your monthly payment increases significantly because you are now paying both principal and interest. Some borrowers are caught off guard by this payment increase so it is important to plan ahead and budget for the higher repayment period payment.
Q5: Are HELOC interest rates fixed or variable?
Most HELOCs have variable interest rates tied to the prime rate which means your monthly payment can change over time as interest rates rise or fall. This is different from a home equity loan which has a fixed rate. Some lenders offer the option to convert part or all of your HELOC balance to a fixed rate during the repayment period. If you are concerned about rising rates a home equity loan with a fixed rate may be a better choice for predictable monthly payments.
This HELOC calculator provides estimates for informational purposes only. Results are based on the inputs provided and assume interest-only payments during the draw period followed by fixed principal and interest payments during the repayment period. Actual HELOC terms credit limits interest rates and payments will vary based on your credit score home appraisal lender requirements and market conditions. HELOCs typically have variable interest rates that can change over time. Your home is used as collateral — failure to repay may result in foreclosure. This calculator does not constitute financial or lending advice. Always consult a licensed mortgage professional or financial advisor before opening a home equity line of credit.