HELOC Calculator

What is a HELOC?

A Home Equity Line of Credit (HELOC) is a revolving credit line that uses your home's equity as collateral — essentially a credit card secured by your house. HELOCs typically have a 10-year draw period during which you can borrow, repay, and reborrow as needed, paying interest only on what you actually use. After the draw period ends, you enter a 10–20 year repayment period where you pay back both principal and interest on the outstanding balance. Most HELOCs have variable rates tied to the prime rate; some lenders offer fixed-rate options or fixed-rate conversion features.

How to use this calculator

1. Enter your home's current market value.
2. Enter your remaining mortgage balance.
3. Enter the HELOC interest rate and the credit limit you expect (or the lender's max CLTV).
4. Choose how much you'll borrow upfront and how much you'll draw over time.
5. Click Calculate to see your monthly payments during the draw and repayment periods, plus total interest.

Understanding your results

The calculator shows three phases of a typical HELOC: (1) the interest-only draw period where you pay only interest on what you've borrowed — payments are low and variable; (2) the repayment period where you pay both principal and interest, often at a significantly higher monthly payment; (3) the total interest paid across the full 20-year term. Also shown: your CLTV ratio (lenders prefer ≤80%) and the equity cushion between your balance and home value.

HELOC requirements

• Equity: Most lenders require 15-20% equity in your home. On a $400,000 home, that means no more than $280,000-$320,000 in combined mortgage and HELOC balances.
• Credit score: Most HELOC lenders require 680+ credit score, though some accept 620+.
• DTI ratio: Your total debt-to-income ratio should be under 43%, including the new HELOC payment.
• Income verification: Lenders want to see stable employment and sufficient income to repay the HELOC.

HELOC vs home equity loan vs cash-out refinance

• HELOC — flexible, draw-as-needed, variable rate. Best for ongoing projects or uncertain costs.
• Home equity loan — lump sum at fixed rate, fixed payment. Best for one-time, known-cost needs.
• Cash-out refinance — replaces your mortgage with a larger one and gives you the difference. Best when mortgage rates are at historic lows and you can lower your rate.

For a detailed comparison, see our HELOC vs Home Equity Loan guide.

Pros and cons of a HELOC

• Pro: Flexibility — borrow only what you need, when you need it. Pay interest only on what you've drawn.
• Pro: Lower rates — HELOC rates are typically lower than credit cards and personal loans because they're secured by your home.
• Pro: Tax benefits — interest may be tax-deductible if used for home improvements (consult a tax advisor).
• Con: Variable rate — payments can increase significantly if rates rise. Budget for worst-case scenarios.
• Con: Your home is collateral — if you can't repay, you could lose your home through foreclosure.
• Con: Payment shock — the transition from interest-only to principal-plus-interest can double your monthly payment.