How to use the heloc calculator
- Enter your home's current market value in dollars. Use a recent appraisal or online estimate for accuracy.
- Enter the outstanding balance on your first mortgage. This is the amount you still owe on the primary loan.
- Set the combined loan-to-value (CLTV) ratio your lender allows. Most lenders cap CLTV at 80 to 90 percent.
- Input the current annual interest rate for the HELOC. Remember that HELOC rates are usually variable and tied to the prime rate.
- Choose the draw period and repayment period in years. Typical draw periods are 10 years and repayment periods are 10 to 20 years.
- Read the results: maximum line, interest-only payment, amortizing payment and total interest over the life of the line.
How the HELOC line is calculated
The maximum line of credit is based on the combined loan-to-value ratio: maxLine = homeValue × (CLTV / 100) - mortgageBalance. If the result is negative, the line is zero. For a $300,000 home with a $150,000 mortgage at 80% CLTV: 300,000 × 0.80 - 150,000 = 90,000. This heloc calculator uses that formula to give you an instant estimate of your borrowing power.
Interest-only draw period payment
During the draw period you pay only interest on the outstanding balance. The monthly payment is maxLine × (annualRate / 100) / 12. Using the example above at 5.5%: 90,000 × 0.055 / 12 = 412.50 per month. The calculator assumes the whole line is drawn from day one, so it shows the highest interest-only payment you could face.
Amortizing repayment period payment
After the draw period ends, the balance amortizes over the repayment term. The monthly payment uses the standard loan formula: P = L × r / (1 - (1 + r)^-n), where L is the line amount, r is the monthly rate, and n is the number of repayment months. For 90,000 at 5.5% over 20 years (240 months): r = 0.055/12 ≈ 0.0045833, P = 90,000 × 0.0045833 / (1 - 1.0045833^-240) ≈ 619.10. This payment stays constant for the repayment period unless the rate adjusts.
Total interest paid over the life of the HELOC
Total interest equals the sum of all interest-only payments plus all amortizing payments minus the original line amount. In the example: (412.50 × 120) + (619.10 × 240) - 90,000 = 108,083.66. This figure helps you compare the HELOC cost with other financing options such as a personal loan or cash-out refinance.
Common HELOC scenarios
Home improvement: Borrow $50,000 for a renovation, pay interest only for 10 years, then repay over 20 years.
Debt consolidation: Use a HELOC at 6% to pay off credit cards at 20%, which can cut interest, but the debt is then secured by your home.
Emergency fund: Keep a $100,000 line open; pay nothing until you draw. A heloc calculator lets you model each scenario before you commit.
Reference table: payments at different rates for a $100,000 line
| Annual Rate | Interest-Only (10 yr draw) | Amortizing (20 yr repay) |
|---|---|---|
| 4.0% | $333.33 | $605.98 |
| 5.5% | $458.33 | $687.89 |
| 7.0% | $583.33 | $775.30 |
| 8.5% | $708.33 | $867.82 |
HELOC vs home equity loan
A home equity loan gives you a lump sum with a fixed rate and fixed payments from day one. A HELOC works like a credit card: you draw as needed during the draw period, pay interest only, then enter a repayment phase. The heloc calculator above models the HELOC structure. If you prefer predictable payments, compare the HELOC amortizing payment with a home equity loan quote.
Method and sources
Worked example: a $300,000 home with a $150,000 mortgage and an 80% combined limit allows a line of $90,000.00. At 5.5% the interest-only payment while the full line is drawn is $412.50. After a 10-year draw, repaying over 20 years costs $619.10 a month, and total interest over the 30 years is $108,083.66.
Method: line = home value x CLTV limit - mortgage balance; draw payment = line x rate / 12; repayment payment is the standard amortization formula. The tool assumes the whole line is drawn on day one and the rate never changes. Real HELOCs usually have a variable rate tied to an index, may let you draw gradually, and charge fees, so this is an upper-bound illustration, not an offer.
Worked examples
| Example | Input | Result |
|---|---|---|
| Typical $300k home, $150k mortgage, 80% CLTV | Home value ($): 300000; Current mortgage balance ($): 150000; Combined LTV (%): 80; Annual interest rate (%): 5.5; Draw period (years): 10; Repayment period (years): 20 | Maximum Line of Credit: $90,000.00; Interest-Only Payment (Draw Period): $412.50; Amortizing Payment (Repayment Period): $619.10; Total Interest Paid: $108,083.66 |
| High-value home, low mortgage, 90% CLTV | Home value ($): 750000; Current mortgage balance ($): 200000; Combined LTV (%): 90; Annual interest rate (%): 6.25; Draw period (years): 10; Repayment period (years): 15 | Maximum Line of Credit: $475,000.00; Interest-Only Payment (Draw Period): $2,473.96; Amortizing Payment (Repayment Period): $4,072.76; Total Interest Paid: $554,971.55 |
| Conservative 70% CLTV, shorter terms | Home value ($): 250000; Current mortgage balance ($): 100000; Combined LTV (%): 70; Annual interest rate (%): 4.75; Draw period (years): 5; Repayment period (years): 10 | Maximum Line of Credit: $75,000.00; Interest-Only Payment (Draw Period): $296.88; Amortizing Payment (Repayment Period): $786.36; Total Interest Paid: $37,175.47 |
FAQ
What is a HELOC?
A home equity line of credit (HELOC) is a revolving credit line secured by your home. You can draw funds up to a limit during the draw period, then repay over a fixed term.
How is the maximum line determined?
Lenders set a combined loan-to-value (CLTV) ratio. The maximum line equals your home's value times the CLTV percentage minus your existing mortgage balance.
What happens during the draw period?
You can borrow, repay, and borrow again up to the limit. Payments are usually interest-only on the amount you have drawn.
What happens when the draw period ends?
The line closes to new draws and the outstanding balance converts to a fully amortizing loan with principal and interest payments over the repayment period.
Can the interest rate change?
Most HELOCs have variable rates tied to an index such as the prime rate. Your payment will change as the rate changes.
Is the interest tax-deductible?
Interest may be deductible if the funds are used to buy, build, or substantially improve the home that secures the line. Consult a tax advisor.
What if I sell my home?
The HELOC must be paid off at closing from the sale proceeds, just like your first mortgage.
How accurate is this heloc calculator?
The calculator uses standard formulas for interest-only and amortizing payments. Actual lender terms may include fees, rate caps, or minimum draw requirements that affect the exact payment.
Why does the page assume the whole line is drawn?
It shows the highest payments you could face. If you draw less, scale the payments down in proportion, or enter a smaller CLTV limit to model a smaller line.