HELOC Calculator (Home Equity Line of Credit Payments)
Estimate your HELOC borrowing power — available equity at 80% combined LTV, the interest-only draw payment, the full repayment payment once principal kicks in, and the payment shock between them.
HELOC — interactive calculator, computed instantly in your browser.
HELOC Payments Explained: Interest-Only Draws, Repayment Phase, and CLTV Limits
Max Line = Home × CLTV − Mortgage Balance
| Line | Value | Detail |
|---|---|---|
| Max HELOC line | $80,000 | $450,000 × 80% CLTV − $280,000 owed |
| Combined LTV after a $60,000 draw | 75.6% | Within the 80% guideline |
| Draw-period payment (interest-only) | $425.00/mo | $60,000 × 8.5% ÷ 12 |
| Repayment payment (20-year amortization) | $520.69/mo | Principal now included |
| Payment shock | +$95.69/mo | +23% over the interest-only payment |
| Total interest over repayment | $64,967 | On top of the $60,000 principal |
| Cost of a 2-point rate rise | +$100.00/mo | Variable-rate exposure on $60,000 |
Key Point: HELOC interest is comfortable while interest-only — the jump comes when repayment starts. Budget for the full $520.69 payment from day one, not the $425 draw-period teaser.
A Home Equity Line of Credit lets you borrow against the value you have already built — but it behaves nothing like a mortgage. Instead of one lump sum, you get a revolving line you can draw, repay, and redraw during a draw period, usually paying interest only. When the draw period ends, the balance converts to a fully amortizing payment. This calculator prices both phases and the shock between them.
1. How Much Equity You Can Borrow
Lenders cap the combined loan-to-value ratio (CLTV, first mortgage + HELOC ÷ home value) — typically 80% for solid credit, 85% with strong profiles, and occasionally 90%+ for premium borrowers. The formula is brutally simple: $450,000 × 80% = $360,000 max financed; subtract the $280,000 first mortgage and you have an $80,000 line. Drawing $60,000 lifts your combined LTV to 75.6% — comfortably inside the guideline.
2. The Two Payment Phases
- Draw period (typically 10 years): interest-only. $60,000 at 8.5% costs $425.00/month and not one dollar of principal leaves.
- Repayment phase (typically 10-20 years): the balance amortizes. The same $60,000 over 20 years at 8.5% costs $520.69/month — a $95.69 payment shock the month principal kicks in.
- Total interest: repaying over 20 years costs about $64,967 of interest on the $60,000 — more than the principal itself. Shorter terms cut that sharply.
3. Variable Rates and Payment Shock
Most HELOCs price off the prime rate plus a margin, so payments float. A 2-point rise on $60,000 adds $100/month in interest-only mode alone. Lenders also re-underwrite at conversion — if home values fell or your credit slipped, the repayment terms can tighten. Fixed-rate HELOC options exist and swap away downside for away upside; weigh them if the draw will sit outstanding for years.
4. HELOC vs Cash-Out Refinance vs Home Equity Loan
A HELOC is revolving and variable — ideal for phased or uncertain needs like a renovation spread over years. A home equity loan is one lump at a fixed rate. A cash-out refinance replaces the first mortgage entirely — one payment at today's rate, but it resets the clock on the whole balance. Whatever route you take, keep total obligations inside lender limits with the 📊 Debt-to-Income Calculator, read the first lien with the 🏡 Mortgage Payment Calculator, and compare against keeping the loan as-is with the 🏦 Mortgage Refinance Calculator — all in the 💰 Financial Hub.
🔗 Home Equity Cross-References
A HELOC prices your equity, not the whole house — before borrowing, check the payment the first lien already demands with the 🏡 Mortgage Payment Calculator and verify total debt still clears under 36% with the 📊 Debt-to-Income Calculator, inside the 💰 Financial Hub.
Equity also sizes the house you can keep — run the 🏠 Home Affordability Calculator before tapping it, or compare keeping the first mortgage against starting fresh with the 🏦 Mortgage Refinance Calculator.
Frequently Asked Questions (HELOC)
A HELOC is a revolving credit line secured by your home. During the draw period (commonly 10 years) you borrow, repay, and reborrow, usually paying interest only. After that the balance converts to a fully amortizing repayment (another 10-20 years). Interest accrues only on what you have drawn — an untouched line costs nothing beyond possible annual fees.
Most lenders want a score of 680 or better for prime pricing, with 740+ unlocking the highest lines and lowest margins. The combined loan-to-value ceiling is typically 80% of home value (first mortgage plus HELOC), stretching to 85% with strong credit and up to 90% in some programs. Debt-to-income ratios usually need to stay under roughly 43-45%.
Interest is deductible only when the funds are used to buy, build, or substantially improve the home that secures the line — the TCJA restriction that applies through 2025 and continues under current law. Using the line for tuition, debt consolidation, or travel does not qualify. Keep receipts and documentation of the use of funds, and confirm with a tax professional.
The outstanding balance stops revolving and begins amortizing over the repayment term — the payment jumps from interest-only to principal-plus-interest (about $95.69 more on a $60,000 balance at 8.5% over 20 years in our example). Some lenders allow interest-only repayment to continue briefly; most require the full amortizing payment. Budget for that step-up from the start.
When you need flexibility or expect to repay quickly: the HELOC leaves your first mortgage rate untouched and lets you draw only what you need. A cash-out refinance wins when you are taking a large amount, want one fixed payment, and can improve on your existing first-mortgage rate — but it recloses the whole loan. Compare total closing costs and how long you will hold the balance before choosing.