HELOC Calculator

See how much home equity you can borrow at an 80 to 90% CLTV limit, the interest-only draw payment, the repayment payment and a fixed home equity loan comparison.

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About this tool

What is the HELOC Calculator?

The HELOC Calculator answers the two questions people ask before opening a home equity line of credit: how much will a lender let me borrow, and what will the payments be? Enter your home value, what you still owe on the mortgage and the lender's maximum combined loan-to-value (CLTV), and it shows your equity, the largest line you can get and the CLTV after you draw.

It then prices the line in its two phases. During the draw period (often 10 years) most HELOCs require only interest, so the payment is the balance times the rate divided by 12. When the draw period ends, the balance is repaid over the repayment period (often 20 years) with principal and interest, and the payment jumps. The calculator shows both payments, the size of the jump, total interest, a stress test if the variable rate rises, and the cost of a fixed-rate home equity loan for the same amount.

A year-by-year table shows the balance and interest through both phases. All figures are calculated in your browser.

  • Maximum credit line from home value, liens and CLTV limit
  • Interest-only draw and amortizing repayment payments
  • Payment jump, total interest and a rate stress test
  • Fixed home equity loan comparison
  • Year-by-year balance and interest schedule
  • Currency selector, copy and share link, runs in your browser
Read the guide: HELOC Maths: How Much Equity You Can Borrow and What It Costs

How to use the HELOC Calculator

  1. Enter the current value of your home and the balance of your mortgage plus any other liens already on it.
  2. Set the lender's CLTV limit. 80% to 85% is typical; some lenders go to 90% for strong borrowers.
  3. Type the amount you plan to draw, or leave it blank to use the whole line, then the HELOC rate and the lengths of the draw and repayment periods.
  4. Optionally set a rate rise for the stress test and the rate and term of a fixed home equity loan to compare against.
  5. Read the maximum line, the draw-period and repayment payments, total interest and the comparison table, then check the year-by-year schedule.

Worked examples

Maximum line at 85% CLTV

Input

Home $500,000, mortgage $300,000, CLTV 85%, full draw at 8%, 10-year draw, 20-year repayment

Output

Line $125,000; interest-only $833.33 a month; repayment $1,045.55 a month; total interest $225,932.02

$500,000 x 0.85 - $300,000 = $125,000. Ten years of interest-only payments cost $100,000 and pay nothing off, which is why the total interest is so high.

Drawing only what you need

Input

Same home, draw $60,000 at 8%

Output

Interest-only $400 a month, then $501.86 a month; CLTV after 72%

Interest is charged only on what you draw. If the rate rises 2 points the repayment payment becomes $579.01.

HELOC against a fixed home equity loan

Input

$60,000 HELOC at 8% against a 15-year fixed loan at 8.25%

Output

Fixed loan $582.08 a month with $44,775.16 interest, against $108,447.37 interest on the HELOC over 30 years

The fixed loan costs more each month at first but repays from day one over a shorter term, so total interest is less than half.

Lower value, tighter limit

Input

Home $400,000, mortgage $250,000, CLTV 80%, rate 7.5%

Output

Equity $150,000 but a maximum line of $70,000; interest-only $437.50, then $563.92 a month

You cannot borrow all your equity: 80% of $400,000 is $320,000, and $250,000 of that is already taken by the mortgage.

Background and insight

Lenders size a HELOC with combined loan-to-value: all loans secured by the home divided by its appraised value. If a lender caps CLTV at 85% on a $500,000 home, total secured debt can reach $425,000; with a $300,000 mortgage, the most you can borrow is $125,000. The 15% left over is the lender's cushion against a fall in prices. Common caps sit between 80% and 90%, and the lender will also check your credit score, debt-to-income ratio and an appraisal before it sets the final line.

A HELOC is revolving credit, like a credit card secured by your house. The Consumer Financial Protection Bureau's guide to home equity lines and Regulation Z (12 CFR 1026.40) describe the typical structure: a draw period when you can borrow, repay and borrow again, followed by a repayment period when you can no longer draw. Most rates are variable, quoted as an index such as the prime rate plus a margin, and must have a lifetime cap disclosed up front.

The payment jump is the risk people underestimate. On a $125,000 balance at 8%, interest-only is $833.33 a month; repaying the same balance over 20 years is $1,045.55, about 25% more, and if the rate has risen 2 points by then it is $1,206.28. A fixed home equity loan avoids both the variable rate and the interest-only phase, at the cost of borrowing the whole amount at once.

Interest on home equity debt is deductible for federal tax only if the money is used to buy, build or substantially improve the home that secures the loan, within the mortgage interest limits described in IRS Publication 936. Using a HELOC for a car, tuition or credit card debt gives no deduction.

Common use cases

  • Planning a renovation

    Check whether the line will cover the project and what the payment will be once repayment starts.

  • Comparing HELOC and home equity loan offers

    Put a variable line and a fixed loan for the same amount side by side on payment and total interest.

  • Stress-testing a variable rate

    See what happens to the payment if the prime rate rises before or during the repayment period.

  • Consolidating debt

    Estimate the new monthly cost of moving high-rate balances onto a line secured by your home, and the risk that brings.

Tips and limitations

  • The calculator assumes the whole draw is taken on day one and the rate never changes. Real HELOC rates float with the prime rate, so treat the stress test as part of the answer.
  • Lenders use an appraised value, not your own estimate. A lower appraisal lowers the line by the CLTV percentage of the difference.
  • Paying only interest during the draw period leaves the full balance owed when repayment starts. Paying extra principal early shrinks the later payment.
  • Watch for fees: annual fees, inactivity fees and early-closure fees appear in the HELOC disclosure required by Regulation Z.
  • A lender can freeze or reduce a line if home values fall significantly or your finances change, so do not count on unused credit as an emergency fund.
  • Your home secures the debt. Missing payments can lead to foreclosure, which is the main reason to borrow less than the maximum.

Frequently asked questions

How much can I borrow with a HELOC?

Multiply your home value by the lender's combined loan-to-value limit and subtract what you owe on the mortgage. At 85% on a $500,000 home with a $300,000 mortgage, that is $425,000 - $300,000 = $125,000. Credit score, income and the appraisal can lower the final figure.

What is CLTV and how is it calculated?

Combined loan-to-value is the total of every loan secured by the home divided by its value. With a $300,000 mortgage and a $60,000 HELOC on a $500,000 home, CLTV is $360,000 / $500,000 = 72%.

How is the HELOC payment calculated during the draw period?

Most HELOCs require interest only: balance x annual rate / 12. A $100,000 balance at 8% costs $666.67 a month and does not reduce the balance. Some lenders require a small principal payment as well; check your agreement.

Why does my HELOC payment go up after the draw period?

When the draw period ends you must repay the balance with principal and interest over the repayment period. $125,000 at 8% over 20 years is $1,045.55 a month, compared with $833.33 interest-only, and more if the variable rate has risen.

Is a HELOC or a home equity loan cheaper?

It depends on rate and term. A fixed home equity loan usually has a slightly higher starting rate but repays from the first month and cannot rise. In the default example a 15-year fixed loan at 8.25% costs $44,775 in interest against $108,447 for a 10 + 20 year HELOC at 8%.

Is HELOC interest tax deductible?

Only if the money is used to buy, build or substantially improve the home that secures the line, and only within the mortgage interest limits in IRS Publication 936. Interest on money used for other purposes is not deductible.

Does the calculator include closing costs or fees?

No. Appraisal, origination, annual and early-termination fees vary by lender and appear in the disclosures you receive. Add them to the cost when comparing offers.

Is there an in-depth guide to the HELOC Calculator?

Yes. “HELOC Maths: How Much Equity You Can Borrow and What It Costs” covers the background, how it works, common pitfalls and worked examples. Read the full guide.

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