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HELOC Calculator

Calculate your Home Equity Line of Credit limit, draw-period interest-only payments, and repayment-period P&I payments. See CLTV, max credit line, and total interest across both phases.

Calculation Inputs

HELOCs use variable rates, typically Prime + margin. Current Prime ~8.5%.

Estimated average amount you plan to draw each month.

Results computed instantly — your data never leaves your device.

Live Results

Real-Time

Approved Credit Line

$60,000

Current Home Equity

$170,000

Draw Period Monthly Interest

$218.75

Interest-only on avg drawn balance

Repayment Monthly Payment

$530.23

P&I over 20 years

CLTV After HELOC

75.6%

Total Interest (est.)

$93,504.34

100% Client-SidePrivate & Secure

HELOC Phases

Draw Period
10 yrs · interest-only
Repayment Period
20 yrs · P&I
First Mortgage LTV62.2%
Combined LTV (CLTV)75.6%
Total Interest (Draw)$26,250
Total Interest (Repayment)$67,254.34

How to Use the HELOC Calculator

  1. 1

    Enter your current home value and remaining mortgage balance to determine available equity.

  2. 2

    Input your desired credit limit — the calculator will cap it at the lender's maximum CLTV (typically 85%).

  3. 3

    Set the interest rate (check current Prime rate + your lender's margin), draw period, and repayment period.

  4. 4

    Enter your estimated average monthly draw to project total interest costs across both phases.

  5. 5

    Review the CLTV ratio, draw-period interest-only payment, and repayment-period P&I payment.

Formula & Mathematical Basis

Max HELOC = (Home Value × Max CLTV%) − Existing Mortgage Balance

Variable Key

CLTV

Combined Loan-to-Value ratio — total debt secured by the property divided by appraised value

Draw Interest

Outstanding Balance × (Annual Rate ÷ 12) — interest-only during draw period

Repayment PMT

Standard amortization formula applied to balance outstanding at end of draw period

📝 Interest during the draw period accrues only on amounts actually drawn, not the full credit limit. This calculator uses an average draw model for projection; actual costs depend on your draw pattern.

Step-by-Step Examples

1

Home renovation HELOC

Scenario: $500,000 home, $300,000 mortgage, 85% CLTV, 8.75% rate, 10-year draw, $500/mo draw.

  1. 1.Max HELOC = $500,000 × 0.85 − $300,000 = $125,000.
  2. 2.CLTV after HELOC = ($300,000 + $125,000) / $500,000 = 85%.
  3. 3.Draw-period interest on avg balance ($31,250): $31,250 × 8.75%/12 ≈ $228/month.
  4. 4.Repayment: $125,000 over 20 years at 8.75% ≈ $1,107/month.
✅ $228/mo draw period · $1,107/mo repayment · $125,000 credit line

Practical Use Cases

  • Home renovation and remodeling — kitchen, bathroom, or addition financing
  • Emergency fund backstop — low-cost standby credit without drawing unless needed
  • Debt consolidation — paying off high-interest credit cards with home equity at lower rates
  • Education expenses — tuition and college costs financed over time
  • Investment property down payment — using equity in primary residence

Common Mistakes to Avoid

  • Treating a HELOC as permanent income — the lender can reduce or freeze the line if your home value drops or creditworthiness changes.
  • Interest-only mindset — paying only the draw-period minimum means the full balance remains and payment shock arrives at repayment.
  • Variable rate risk — a 2% rate increase on a $100,000 balance adds $167/month to your payment.
  • Over-leveraging — borrowing to the CLTV maximum leaves no equity buffer if home prices decline.

Glossary of Terms

CLTV (Combined LTV)
The total of all loans secured by a property divided by its appraised value, expressed as a percentage.
Draw Period
The initial phase (typically 5–10 years) during which you can borrow, repay, and re-borrow up to your credit limit.
Repayment Period
The phase following the draw period (typically 10–20 years) when no new draws are allowed and the outstanding balance is repaid with P&I payments.
Prime Rate
The benchmark interest rate US banks charge their most creditworthy customers; most HELOCs are priced as Prime + a margin.

Frequently Asked Questions

What is the difference between a HELOC and a home equity loan?

▾
A HELOC is a revolving credit line — you borrow, repay, and re-borrow during the draw period, paying interest only on the outstanding balance. A home equity loan disburses a lump sum upfront with fixed monthly P&I payments from day one.

How is a HELOC credit limit determined?

▾
Lenders calculate the maximum Combined Loan-to-Value (CLTV) — typically 80–90% of your home's appraised value — and subtract your existing mortgage balance. For example: $500,000 home × 85% CLTV − $300,000 mortgage = $125,000 maximum HELOC.

Are HELOC interest rates fixed or variable?

▾
Most HELOCs have variable rates tied to the Prime Rate plus a margin (e.g. Prime + 0.5%). This means your payment changes when the Fed adjusts rates. Some lenders offer rate-lock options to convert a portion to a fixed rate.

Can I deduct HELOC interest on my taxes?

▾
As of the Tax Cuts and Jobs Act (2018), HELOC interest is only deductible if the funds are used to "buy, build, or substantially improve" the home securing the loan. Using HELOC funds for other purposes (debt consolidation, vacations) disqualifies the deduction.

What happens at the end of the draw period?

▾
The HELOC enters repayment. You can no longer draw funds and must repay the outstanding balance — usually as fully amortizing P&I payments. Some HELOCs require a balloon payment; confirm the terms with your lender.

Sources & References

  1. [1]
    Home Equity Line of Credit (HELOC)— Consumer Financial Protection Bureau, 2024
  2. [2]

CalculatorFree Mortgage TeamCertified Mortgage Planning Specialist (CMPS) Advisory Review

HELOC mechanics verified against CFPB guidelines and current bank product disclosures.

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