How to use the HELOC calculator
- Enter your Home value and Current mortgage balance.
- Enter the Lender's max combined loan-to-value, CLTV (%). This is the cap on all loans against the home as a share of its value, usually 80 to 90%.
- Enter the HELOC interest rate, the Amount you plan to draw, and the Draw period (years) and Repayment (years) from the lender's terms (10 and 20 years are common).
- Read Credit line available, Draw-period payment and Repayment-period payment. The table adds equity, CLTV, lifetime interest and a rate-rise test.
How the HELOC math works
Credit line available = home value × CLTV limit − mortgage balance. During the draw period most HELOCs charge interest only, so the payment is balance × rate / 12. When the draw period ends the balance is repaid with principal and interest over the repayment period, using the standard amortization formula M = P × r / (1 − (1 + r)−n). The CFPB's HELOC booklet explains these phases and why payments can rise sharply.
Worked example with the default numbers
A $500,000 home at an 85% CLTV limit supports $425,000 of total debt. Subtract the $250,000 mortgage and the credit line available is $175,000. Drawing $50,000 at 7.25% costs $50,000 × 7.25% / 12 = $302.08 a month for the 10-year draw period. Repaying the same $50,000 over 20 years costs $395.19 a month, which is $93.11 more (31% higher). Interest over the whole HELOC comes to $81,095: $36,250 during the draw period and $44,845 during repayment. The draw lifts your combined loan-to-value from 50% to 60%, and if the rate rose 2 points to 9.25% the payments would be $385.42, then $457.93.
Limits and edge cases
- The rate is held steady, but real HELOC rates usually follow the prime rate, so use the rate-rise row to test your budget.
- It assumes you draw the full amount at the start and pay only interest until the draw period ends.
- If your draw is larger than the credit line, the payments use the credit line and a note explains why.
- Lenders also check credit score and debt-to-income ratio. See where you stand with the debt-to-income ratio calculator.
- Some HELOCs end with a balloon payment instead of a repayment period. Check your agreement.
If you would rather replace your first mortgage than add a second loan, compare a cash-out refinance using the mortgage refinance calculator, and see the month-by-month repayment in the amortization schedule calculator.
HELOC FAQ
How much can I borrow with a HELOC?
Multiply your home value by the lender's CLTV limit and subtract your mortgage balance. For a $500,000 home at 85% with a $250,000 mortgage, that is $425,000 minus $250,000, or $175,000. Your credit and income can lower the amount a lender approves.
How is a HELOC payment calculated during the draw period?
Most HELOCs charge interest only while you can draw, so the payment is your balance times the rate divided by 12. A $50,000 balance at 7.25% costs $302.08 a month.
What happens when the HELOC draw period ends?
You can no longer borrow, and the balance is repaid with principal and interest over the repayment period. In the default example the payment rises from $302.08 to $395.19 a month for 20 years.
Is HELOC interest tax deductible?
Only if you itemize and use the money to buy, build or substantially improve the home that secures the loan. IRS Publication 936 says interest on home equity debt used for anything else, such as paying off credit cards, is not deductible.
Is a HELOC or a home equity loan better?
A HELOC is a reusable credit line with a variable rate, which suits costs that arrive over time. A home equity loan pays a lump sum at a fixed rate, which suits one known expense.
Sources: CFPB, What you should know about home equity lines of credit; IRS Publication 936, Home Mortgage Interest Deduction. The default rate is an example close to national HELOC averages in September 2026; use the rate your lender quotes.