HELOC Payment Calculator
Estimate your Home Equity Line of Credit payments
What Is a HELOC?
A Home Equity Line of Credit (HELOC) is a revolving credit line that lets you borrow against the equity you've built in your home. Unlike a traditional home equity loan that gives you a lump sum, a HELOC works more like a credit card — you can draw funds as needed during the draw period, pay interest only on what you use, and then repay the balance during the repayment period.
HELOCs are popular for home renovations, debt consolidation, education expenses, and emergency funds because they offer flexibility and typically lower interest rates than credit cards or personal loans.
How to Use This HELOC Calculator
- Enter your home's current market value — be realistic; you can use recent comparable sales or a professional appraisal estimate.
- Enter your remaining mortgage balance — this is what you still owe on your primary mortgage.
- Set your desired HELOC amount — the calculator will automatically show you the maximum you can borrow (typically 80% of your home's value minus your mortgage balance).
- Adjust the interest rate — HELOC rates are usually variable, tied to the Prime Rate plus a lender margin. Check current rates for accuracy.
- Set the draw and repayment periods — most HELOCs have a 10-year draw period and a 20-year repayment period.
- Click "Calculate Payments" to see your estimated monthly costs.
Understanding Your Results
Draw Period Payments
During the draw period (typically 10 years), you're usually only required to pay interest on the outstanding balance. This keeps payments low initially but means you're not reducing the principal. Our calculator shows this interest-only payment amount.
Repayment Period Payments
Once the draw period ends, the HELOC enters the repayment phase (typically 20 years). At this point, you can no longer draw funds, and the outstanding balance is fully amortized — meaning each payment covers both principal and interest. Payments typically increase significantly during this phase.
Tips for Getting the Best HELOC
- Shop around: Compare offers from multiple lenders — credit unions, banks, and online lenders often have different rates and fees.
- Check your credit score: A higher credit score (700+) typically qualifies you for better rates and higher LTV limits.
- Know your LTV: Most lenders cap HELOCs at 80% combined LTV, though some go up to 90%. Staying below 80% gives you more options.
- Watch out for fees: Some HELOCs have annual fees, origination fees, or early closure penalties. Factor these into your decision.
- Plan for rate changes: Since HELOC rates are usually variable, budget for potential rate increases over time.
Frequently Asked Questions
A HELOC is a revolving credit line with variable rates and interest-only draw periods. A home equity loan gives you a fixed lump sum with fixed rates and immediate full repayment. HELOCs offer more flexibility; home equity loans offer more predictability.
Lenders typically allow a combined LTV of 80%. So: Max HELOC = (Home Value × 0.80) − Mortgage Balance. If your mortgage balance is already above 80% LTV, you may not qualify for a HELOC.
Interest on a HELOC may be tax-deductible if the funds are used to "buy, build, or substantially improve" the home securing the loan. Consult a tax professional for your specific situation. Tax laws changed in 2018, so not all HELOC interest qualifies.
Since a HELOC is secured by your home, failure to repay can lead to foreclosure. If you're struggling, contact your lender immediately to discuss options like loan modification or refinancing.
