What this calculator does
This HELOC calculator models a home equity line of credit across both of its phases. Enter your credit line, the amount drawn, the rate, and the lengths of the draw and repayment periods, and it returns the interest-only payment you make while drawing, the fully amortizing payment that begins afterwards, and the total interest across both phases.
Those two payment figures are the reason the calculator exists. A HELOC's affordability during the draw period bears little relation to what it costs once repayment starts, and lenders quote the first number far more prominently than the second.
When to use it
The classic case is a staged home renovation, where you do not know the final cost and want to draw as bills arrive rather than borrow a lump sum and pay interest on money sitting idle. A HELOC charges interest only on what you have actually drawn, which is precisely the right structure for uncertain spending.
It is also used as standby liquidity — a line opened while your income and equity qualify, then held unused. And it is used for consolidation, where the rate gap against credit cards is enormous. Run that scenario carefully, because it converts unsecured debt into a lien on your home. The calculator's total interest figure across 30 years is often what stops that idea.
Understanding the inputs
Credit line is the maximum approved, generally set so that your mortgage plus the line stays within 80 to 85 percent of appraised value. Amount drawn is what you actually take, and it is the only figure interest is charged on — an unused line costs nothing beyond any annual fee.
The HELOC rate is variable, quoted as prime plus a margin, so enter today's rate and then test two or three points higher to see your exposure. Draw period is typically 10 years and repayment period 20, giving a 30-year total. Shortening the repayment period raises the post-draw payment considerably, which is worth knowing before you agree to it.
How is this calculated?
Available Credit = Home Value × LTV % − Mortgage Balance. Draw Period Payment = Draw × Monthly Rate (interest only). Repayment Period = standard amortization.
A worked example
Take a $100,000 line with $60,000 drawn at 8.5 percent, a 10-year draw period, and a 20-year repayment period. During the draw period your payment is interest only: $60,000 times 8.5 percent divided by twelve, or exactly $425 a month.
That $425 never touches principal. Over ten years it totals $51,000 in interest, and you still owe the full $60,000. Repayment then begins at roughly $521 a month for 20 years, carrying about $64,967 of further interest. Across the full 30 years, borrowing $60,000 costs roughly $115,967 in interest — nearly twice the amount drawn.
Limitations and assumptions
The calculator holds the rate fixed, which is the largest simplification here, since HELOC rates float with prime. A two-point rise on a $60,000 balance adds $100 a month to the interest-only payment immediately. It also assumes a single draw at the start rather than staged draws, which would reduce early interest.
Annual fees, appraisal costs, early closure fees, and any minimum draw requirement are excluded, as is the possibility that the lender freezes or reduces your line. Because the debt is secured by your home, treat this as a planning tool and read the actual line agreement — particularly the repayment period terms — before drawing.
Common Questions
- How much can I borrow with a HELOC?
- Lenders take your home's appraised value, multiply by a maximum combined loan-to-value ratio — usually 80 to 85 percent, occasionally 90 — and subtract your mortgage balance. On a $500,000 home with a $280,000 mortgage at 85 percent CLTV, that is $425,000 minus $280,000, or about $145,000 of available credit.
- Is a HELOC rate fixed or variable?
- Almost always variable, tied to the prime rate plus a margin set by your credit profile. When the Federal Reserve moves, your payment moves with it, usually within a billing cycle or two. Some lenders offer fixed-rate lock options on portions of the balance, which can be worth using on a large draw.
- What is the difference between a HELOC and a home equity loan?
- A home equity loan hands you a lump sum at a fixed rate with a fixed payment from day one. A HELOC is a revolving line you draw from as needed, with a variable rate and interest-only payments during the draw period. Use the loan for a known cost, the line for staged or uncertain spending.
- Is HELOC interest tax deductible?
- Only if the funds are used to buy, build, or substantially improve the home securing the loan, under the Tax Cuts and Jobs Act rules. Using a HELOC to consolidate credit cards or pay tuition makes the interest non-deductible. The combined limit across your mortgage and HELOC is $750,000 of acquisition debt, and you must itemize.
- What fees come with a HELOC?
- Often fewer than a mortgage, but check for an appraisal fee, annual maintenance fee of $50 to $100, inactivity fees, and early closure fees if you shut the line within two or three years. Some lenders waive closing costs on the condition that you keep the line open for a minimum period.
- Can my lender reduce or freeze my credit line?
- Yes. Federal rules permit a lender to suspend draws or reduce the line if your home's value drops significantly, if your financial circumstances deteriorate materially, or if you default. This happened widely in 2008 and 2009. A HELOC is not a guaranteed emergency fund, which is worth remembering if you are treating it as one.
- What happens at the end of the draw period?
- The line closes to new draws and you begin repaying principal plus interest over the repayment period, typically 20 years. Payments jump sharply because you go from covering interest only to amortizing the entire balance. Model that transition before you draw heavily — it is the single most common HELOC surprise.
- Is a HELOC a good way to consolidate credit card debt?
- The rate is dramatically better — single digits against 22 percent or more. The catch is that you are converting unsecured debt into debt secured by your house, so a future job loss now threatens your home rather than just your credit score. It works only alongside stopping the behavior that created the balances.
Related calculators
- HELOC Draw vs Repay CalculatorCompare HELOC interest-only draw period vs principal+interest repayment costs.
- Debt Consolidation CalculatorSee how much you save by consolidating multiple debts into a single loan.
- Mortgage Refinance CalculatorCompare your existing mortgage against a proposed new one, including closing costs, and find the point at which the switch pays for itself.