HELOC Calculator

How to Use This Calculator

A Home Equity Line of Credit (HELOC) lets you borrow against your home equity as needed, similar to a credit card but with much lower interest rates because your home serves as collateral. This calculator helps you understand the two distinct phases of a HELOC. During the draw period (typically 5-10 years), you can borrow up to your credit limit and usually make interest-only payments. Once the draw period ends, the repayment period begins (typically 10-20 years), during which you can no longer borrow and must repay both principal and interest in fully amortizing payments. The payment jump from draw to repayment period can be significant — sometimes doubling or tripling — so planning ahead is critical. Most lenders limit your total borrowing to 85% of your home value minus your existing mortgage balance, known as the combined loan-to-value (CLTV) ratio. HELOCs typically carry variable interest rates tied to the prime rate, which means your payments can fluctuate as rates change. This calculator helps you estimate payments under both phases so you can budget appropriately and determine whether a HELOC or a fixed-rate home equity loan is the better choice for your needs.

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