How this calculator works
The credit line is the home value times the maximum combined LTV, minus your mortgage. During the draw period you pay interest only on what you've drawn. In repayment the balance is amortized over the repayment years, which is why the payment jumps.
Worked example
With the example values below: Credit line, $122,500 ($40,000 drawn). Change any number above to run your own.
What you enter
| Input | Example |
|---|---|
| Home value | $450,000 |
| Mortgage balance | $260,000 |
| Max combined LTV | 85% |
| Amount you draw | $40,000 |
| Variable rate | 7.9% |
| Draw period | 10 yrs |
| Repayment period | 20 yrs |
How a HELOC works
A home equity line of credit is a revolving credit line secured by your home. You can borrow, repay and borrow again up to the limit during the draw period, usually 10 years. During the draw, many HELOCs require interest-only payments on what you've drawn.
When the draw period ends, the repayment period begins, often 10 to 20 years. You can't draw any more, and the balance is repaid with principal and interest, so the payment can jump sharply. This calculator shows both payments so there are no surprises.
HELOC rates
Most HELOCs have a variable rate equal to an index, usually the prime rate, plus a margin set by your credit and CLTV. When the Federal Reserve raises or cuts rates, the prime rate and your HELOC payment follow. Some lenders offer introductory rates for the first six to twelve months, and some let you lock part of the balance at a fixed rate.
Because the rate floats, test your budget at a rate one or two points higher than today's.
How much you can borrow
Your credit line is the home's value times the lender's maximum CLTV, usually 80% to 90%, minus your mortgage balance. On a $500,000 home with a $300,000 balance and an 85% limit, the line could be up to $125,000. Your income, credit score and debt-to-income ratio also limit the line.
- Good uses: renovations paid in stages, ongoing tuition, an emergency backstop you hope not to use.
- Watch out for: annual fees, early closure fees, minimum draw requirements and inactivity fees.
HELOC vs. other options
If you need a fixed amount once and want a predictable payment, a home equity loan is simpler. If your first mortgage rate is higher than today's rates, a cash-out refinance might be cheaper overall. For smaller amounts without using your home as collateral, compare a personal loan.
Frequently asked questions
How is a HELOC payment calculated?
During the draw period, interest-only payments are the balance times the annual rate divided by 12; $50,000 at 8.5% is about $354 a month. In repayment, the balance is amortized over the repayment years, so $50,000 over 20 years at 8.5% is about $434 a month.
What happens when the HELOC draw period ends?
You can no longer borrow, and payments switch to principal plus interest over the repayment period. If you were paying interest only, the payment can rise significantly.
Are HELOC rates fixed or variable?
Usually variable, tied to the prime rate plus a margin. Many lenders offer an option to lock part of the balance at a fixed rate.
Does a HELOC affect my credit score?
Applying causes a hard inquiry, and the line shows up as an account. Scoring models often treat HELOCs differently from credit cards, but carrying a large balance relative to the limit can still weigh on your score.
Can I pay off a HELOC early?
Yes, you can usually pay down the balance at any time. Some lenders charge an early closure fee if you close the line within the first two or three years.
Grow what this calculator projects.
TruthSayer AI sends quantitative stock signals across valuations, earnings and dark-pool activity, each one traded in its own funded account first.
Estimates for planning only, not financial, tax or legal advice. Tax tools use 2026 federal figures (brackets, $16,100 / $32,200 standard deduction, $19,000 gift exclusion, $15M lifetime exemption). Rates shown as defaults are examples; replace them with quotes you actually receive.