HELOC Calculator
Calculate your home equity line of credit payment, available credit limit, and total interest cost.
Results
Monthly Draw Payment (interest only)
$354.17
Home Equity
$200,000
Max Credit Line (85% CLTV)
$132,500
Monthly Repayment
$433.91
Total Interest
$96,639
How a HELOC Works
A home equity line of credit (HELOC) lets you borrow against the equity you've built in your home. Lenders typically allow a combined loan-to-value (CLTV) ratio of 80–85%, meaning you can borrow up to 85% of your home's appraised value minus your outstanding mortgage balance. For example, a $450,000 home with a $250,000 mortgage has $200,000 in equity, and at 85% CLTV you could access up to $132,500 as a revolving credit line.
HELOCs work in two phases. During the draw period (typically 5–10 years), you can borrow up to your credit limit and are usually only required to make interest-only payments. Your monthly payment equals the outstanding balance multiplied by the monthly rate. Because most HELOCs carry variable rates tied to the prime rate, your payment can fluctuate as rates change.
Once the draw period ends, the repayment periodbegins (typically 10–20 years). You can no longer borrow from the line, and your remaining balance is fully amortized over the repayment term. This often causes payment shock — on a $50,000 balance at 8.5%, your interest-only draw payment is just $354/month, but the fully amortized repayment payment rises to $435/month for 20 years. Over the life of the loan, you'll pay $54,400 in total interest on that $50,000.
HELOCs are commonly used for home renovations, debt consolidation, education expenses, and emergency reserves. Because your home is collateral, HELOC rates are significantly lower than personal loans or credit cards. Interest paid on a HELOC used for home improvements may be tax-deductible under current IRS rules — consult a tax advisor for your specific situation.
Frequently Asked Questions
How much can I borrow with a HELOC?
Most lenders allow a combined loan-to-value (CLTV) ratio of 80–85%. To estimate your maximum credit line: multiply your home value by 0.85, then subtract your current mortgage balance. A $450,000 home with a $250,000 mortgage gives a maximum HELOC of $132,500 at 85% CLTV. Your actual limit also depends on your credit score, income, and debt-to-income ratio.
Are HELOC rates fixed or variable?
Most HELOCs carry variable rates tied to the prime rate, which means your rate — and monthly payment — can change as the Federal Reserve adjusts rates. Some lenders offer fixed-rate conversion options on portions of your balance. If payment predictability is important, a home equity loan (fixed rate, fixed term, lump sum) may suit you better than a variable HELOC.
What is the difference between a HELOC and a home equity loan?
A HELOC is a revolving line of credit with a variable rate and flexible draws — much like a credit card backed by your home. A home equity loan delivers a lump sum at a fixed rate repaid in equal installments. HELOCs suit ongoing projects or emergency funds where you need flexible access over time. Home equity loans are better when you know exactly how much you need and want a fixed, predictable payment from day one.
Is HELOC interest tax-deductible?
Under current tax law, HELOC interest is deductible only if the funds are used to 'buy, build, or substantially improve' the home securing the line. Interest used for other purposes (debt consolidation, tuition, vacations) is generally not deductible. The deduction is also subject to the $750,000 combined home debt limit under the Tax Cuts and Jobs Act. Always consult a tax professional to confirm what applies to your situation.