HELOC Calculator — Home Equity Line of Credit

Model your credit limit, draw period payments, payment shock, variable rate risk, and full amortization — before tapping your home equity.

HELOC Analyzer
Quick Start
$
$
%
%
$
49% of credit limit
💡 Tax Deductibility
Enable if using HELOC for home improvement
Credit Limit
$102,500
Based on 85% CLTV
Total Interest
Over full term
Draw Payment
Interest-only / mo
Repayment Payment
Principal + Interest / mo
Home Value Breakdown
Mortgage
Borrowed
Available
Cushion
38%
equity
Actual CLTV
Available Credit
Equity Remaining
After-Tax Rate
Total Paid
Cost per $1K Borrowed
Limit = (Home × CLTV%) − Mortgage Draw = Balance × Rate/12 Repay = P&I Amortization
Draw Period (10 yrs)
Interest-only payments
— interest total
Repayment (20 yrs)
Principal + Interest
— additional interest
Outstanding Balance Over Time
Bear / Base / Bull Rate Scenarios

Rate shifts and home value changes affect your payments and borrowing capacity.

Repayment Payment Sensitivity

Rate × Borrowed Amount → Monthly Repayment Payment (P&I). Amber cell = your current scenario.

Payment Shock by Scenario

Draw period (interest-only) vs. repayment period payment across all scenarios.

HELOC vs. Alternatives

Compare your HELOC to a Home Equity Loan, Cash-Out Refi, and Personal Loan at the same borrow amount.

Cost Summary
Cumulative Interest Paid Over Time
Full Amortization Schedule

How to Use This Calculator

1

Enter Your Property Details

Input your home's current value, existing mortgage balance, and your lender's CLTV limit (usually 80–85%).

2

Set Rate & Terms

Choose fixed or variable rate mode. Variable HELOCs use Prime + your margin. Set draw and repayment periods.

3

Model Your Borrow Amount

Use the slider or quick presets to set your planned draw. See the payment shock when interest-only ends.

4

Explore Scenarios & Schedule

Check the Scenario tab for rate risk analysis and product comparisons. See the Full Schedule tab for month-by-month amortization.

Formula & Methodology

HELOC Credit Limit

Credit Limit = (Home Value × CLTV%) − Mortgage Balance

Most lenders allow up to 85% combined LTV. If your home is worth $450k with a $280k mortgage at 85% CLTV: ($450k × 0.85) − $280k = $102,500 limit.

Draw Period Payment (Interest-Only)

Monthly Payment = Balance × (APR ÷ 12)

During the draw period you only pay interest on the outstanding balance. The principal does not decrease.

Repayment Period Payment (P&I)

Payment = P × [r(1+r)^n] / [(1+r)^n − 1]

Standard amortization formula. P = principal, r = monthly rate, n = repayment months. This is why payments jump when the draw period ends.

Key Terms

HELOC
Home Equity Line of Credit — a revolving credit line secured by your home. You draw as needed and pay interest-only during the draw period.
Draw Period
The initial phase (5–10 years) when you can borrow from the line and make interest-only payments. Balance stays flat.
Repayment Period
The phase (10–20 years) when the line closes and you repay principal + interest. This causes the payment shock.
CLTV (Combined LTV)
Total liens ÷ Home Value. Lenders cap HELOCs at 80–90% CLTV. Higher CLTV = higher risk + higher rates.
Payment Shock
The jump in monthly payment when draw period ends. Since you've been paying interest-only, the P&I repayment payment is significantly higher.
HELOAN
Home Equity Loan — a fixed-rate lump-sum loan. Predictable payments but no revolving access. Compare to HELOC in the Scenario tab.
Prime Rate
The benchmark rate set by major banks, based on the Fed Funds Rate. Most variable HELOCs are priced at Prime + a margin (e.g., Prime + 1%).

Real-World Examples

Example 1

Home Renovation

Home: $500k, Mortgage: $300k, CLTV: 85%, Rate: 8.5%, Borrow: $50k, 10yr draw / 20yr repay

Credit limit: $125k. Draw payment: $354/mo (interest-only). Repayment: $435/mo (+23% shock). Interest deductible if for improvements.

Example 2

Debt Consolidation

Home: $400k, Mortgage: $200k, CLTV: 85%, Rate: 9%, Borrow: $30k, 10yr draw / 15yr repay

Credit limit: $140k. Draw payment: $225/mo. Repay: $305/mo. Saves vs. 20% credit card APR, but home is collateral.

Example 3

Variable Rate Risk

Prime + 1% margin HELOC on $75k balance. Current rate: 9.5%. If Prime rises 2% → Rate becomes 11.5%.

Draw payment rises from $594/mo to $719/mo (+$125/mo). Use the Scenario tab to model rate increase risk before borrowing.

HELOCs: Everything You Need to Know Before Borrowing

How a HELOC Works

A HELOC acts like a credit card backed by your home equity. During the draw period you borrow what you need, when you need it, and pay only interest on the outstanding balance. Once the draw period ends, the line closes and you begin repaying principal plus interest — often causing a significant payment jump known as "payment shock."

Variable vs. Fixed Rate

Most HELOCs have variable rates tied to the Prime Rate. If Prime rises 2%, your payment on a $75,000 balance increases by roughly $125/month. Some lenders offer fixed-rate conversion options, and a Home Equity Loan (HELOAN) provides a fixed lump-sum alternative if predictability matters more than flexibility.

Tax Deductibility

HELOC interest may be tax-deductible if the funds are used to "buy, build, or substantially improve" the home securing the loan (per IRS Publication 936). Debt consolidation or personal use does not qualify. Always consult a tax advisor for your specific situation.

HELOC vs. Cash-Out Refinance

Cash-out refi replaces your existing mortgage at a (hopefully) lower fixed rate. It offers lower rates but high closing costs (2–5%) and resets your loan term. A HELOC leaves your first mortgage intact and has low/no closing costs, making it better for ongoing or uncertain expenses like renovation projects.