HELOC Calculator — Credit Line, Draw & Repayment Payments
Your maximum home equity line of credit from home value and mortgage balance, the interest-only payment during the draw period, the payment jump when repayment starts, total interest, a rate-rise stress test and the home-equity-loan alternative.
| Available equity | — |
|---|---|
| Interest-only payment during the draw period | — |
| Interest paid over the draw period (if nothing repaid) | — |
| Repayment-period payment | — |
| Payment jump at the end of the draw period | — |
| Total interest over the life | — |
| If rates rise | — |
| Compared with a home-equity loan (same term, amortising from day one) | — |
In short
A HELOC limit is the lender’s combined loan-to-value cap (typically 80–85%) times the home value minus the mortgage — $160,000 on a $600,000 home with a $350,000 mortgage at 85%; a $60,000 draw at 8.25% costs $413 a month interest-only for the 10-year draw period, then $511 a month for 20 years of repayment, about $112,200 of total interest if nothing is repaid early, versus $451 a month and $102,274 on a 30-year fixed-rate home-equity loan.
Who this is for: Homeowners planning a renovation or large expense who want to know their credit line, the draw-period payment and the jump when repayment starts.
How a HELOC works — and the payment jump nobody mentions
A home equity line of credit is a revolving credit line secured on your home. The limit is the lender's combined loan-to-value cap — typically 80–85% of the home's value — minus your mortgage balance. During the draw period (usually 10 years) you borrow as needed and pay interest only on what you have drawn, at a variable rate tied to prime. Then the repayment period (10–20 years) begins: no more draws, and the balance amortises, so the payment jumps — often by 50–100% — which is the moment borrowers get into trouble.
The calculator shows the line you qualify for, the interest-only payment, the repayment payment and the jump between them, the total interest if you draw everything on day one, the effect of a rate rise, and the same borrowing as a fixed-rate home-equity loan amortising from the start. Use a HELOC for staged spending you will repay quickly (a renovation in phases); use a home-equity loan for a single lump sum you will repay over years.
See also: Home Equity Loan & HELOC Calculator, Cash-Out Refinance Calculator, Debt Consolidation Calculator — Any Currency, Mortgage Payment Calculator (PITI).
Assumptions
- Credit line = home value × combined LTV cap − mortgage balance; draw capped at the line.
- Draw period: interest-only on the drawn amount at the rate entered; repayment period: standard amortisation of the drawn balance.
- Total interest assumes the full draw on day one and no principal repaid during the draw period (worst case for a given draw).
- Stress test re-prices both periods at the rate plus the increase; home-equity-loan comparison uses the same total years at the same rate, fixed.
Worked example
Line: 85% × $600,000 − $350,000 = $160,000. Interest-only on $60,000: $413 a month, $49,500 over ten years with the balance unchanged. Repayment: $511 a month for 20 years ($62,697 interest) — a 24% jump. Total interest on that path $112,197; at 10.25% the payments would be $513 and $589. A 30-year home-equity loan for the same $60,000 at 8.25% costs $451 a month and $102,274 of interest — $9,924 less.
Frequently asked questions
How much can I borrow on a HELOC?
Usually up to 80–85% of your home's value including the first mortgage; some lenders go to 90% for strong credit. Multiply the value by the cap and subtract the mortgage.
Is the rate fixed?
No — HELOCs are variable, usually prime plus a margin, repriced monthly; some lenders offer a fixed-rate lock on part of the balance.
What happens after the draw period?
Draws stop and the balance must be repaid over the repayment period, so the payment rises sharply unless you repaid principal along the way.
Is HELOC interest tax-deductible?
In the US only if the money buys, builds or substantially improves the home that secures it, and within the overall mortgage-interest limits.
HELOC or home-equity loan?
HELOC for flexible, staged borrowing you will repay fast; home-equity loan for a lump sum with a fixed rate and predictable payment.
Can the bank cancel my HELOC?
It can freeze or reduce the line if your home value drops or your finances deteriorate, as happened widely in 2008–09.
Are there HELOC fees?
Often an appraisal, origination or annual fee ($50–100) and an early-closure fee if closed within 2–3 years; many lenders waive them on promotion.
Does a HELOC affect my credit score?
It is reported as revolving credit; a high draw against the line raises utilisation, and the hard inquiry dips the score briefly.
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