🚧 Coming Soon
HELOC Calculator
Estimate your Home Equity Line of Credit limit, monthly payments, and total interest based on your home value and mortgage balance. We're building this calculator now — check back soon.
Estimate your Home Equity Line of Credit limit, monthly payments, and total interest based on your home value and mortgage balance. We're building this calculator now — check back soon.
A Home Equity Line of Credit (HELOC) lets you borrow against your home equity — the difference between your home's value and your mortgage balance. This calculator estimates your HELOC borrowing limit, monthly payment during the draw period (interest-only), monthly payment during the repayment period (principal + interest), and total cost over the life of the line. It also models rate changes on variable-rate HELOCs, which is critical in today's rate environment.
Available Equity = Home Value × CLTV Limit − Existing Mortgage Balance
Most lenders allow a combined loan-to-value (CLTV) of 80–85%. If your home is worth $500,000, mortgage balance is $300,000, and CLTV limit is 80%, your maximum HELOC is $100,000 ($500,000 × 0.80 − $300,000).
During the draw period (typically 10 years), you pay interest only on amounts borrowed. During the repayment period (typically 10–20 years), you pay principal plus interest — often resulting in a payment 2–3x the draw period amount.
Most HELOCs carry a variable rate tied to the Prime Rate plus a margin (typically 0.25–1.00%). When the Federal Reserve raises rates, your HELOC payment rises immediately. A $100,000 HELOC at 9.00% costs $750/month in interest-only. If rates rise 2%, the payment becomes $916/month.
During the draw period, you can borrow and repay as needed. When it ends, the line closes and you repay the outstanding balance with full P&I payments. This "HELOC reset" is where many borrowers are caught unprepared by the payment jump.
Post-TCJA (2017), HELOC interest is only deductible if funds are used to "buy, build, or substantially improve" the home securing the loan. Using HELOC funds for vacations, debt consolidation, or investments is not deductible — a significant change from pre-2018 rules.
Most lenders require a minimum score of 620–640, with best rates for 720+. Lenders also require sufficient equity (15–20% after the new line), stable income, and DTI below 43%. Credit unions often have more flexible underwriting than national banks for home equity products.
Yes. Lenders can freeze or reduce your HELOC if your home value drops significantly, credit score falls substantially, or you experience a major change in financial circumstances. This happened widely during the 2008–2009 financial crisis. Lenders must provide notice before this action in most circumstances.
If you have a low-rate first mortgage (3–4%), a cash-out refinance replaces it with today's higher rates (7%+), significantly increasing total housing cost. A HELOC adds a second lien without touching your existing mortgage — making it the better choice when your primary mortgage rate is well below current market rates.
Typically 2–6 weeks from application to funding. The process includes a credit check, income verification, home appraisal, title search, and a closing with a 3-business-day right of rescission. Online lenders using automated property valuations can sometimes complete in as few as 5 days.
Compare a HELOC against a cash-out refinance with the Refinance Calculator. The Mortgage Calculator helps model different loan scenarios. For using home equity to consolidate debt, see the Debt Consolidation Calculator.