HELOC Calculator
A Home Equity Line of Credit (HELOC) is a flexible borrowing tool that taps into your home's equity. This calculator projects your monthly payments across the two HELOC phases: the draw period (typically 10 years) when you can borrow, repay and re-borrow at interest-only minimums, and the repayment period when the outstanding balance amortizes over a fixed schedule. Enter your home value, mortgage balance, amount drawn and the interest rate to see your combined loan-to-value ratio and required monthly payments. The tool compares the interest-only payment during the draw phase to the fully amortized payment once repayment begins, helping you understand payment shock. You can also calculate the maximum HELOC credit line available to you based on your lender's CLTV limits, typically 80-85% combined with your existing mortgage.
On a $450,000 home with a $280,000 mortgage, your current equity is -- and your maximum HELOC at 85% CLTV is --.
How the HELOC calculation works
During the draw period, only the interest on the drawn balance is due each month. The CFPB describes this in its HELOC guide. After the draw period ends, the outstanding balance amortises over the repayment period using the standard PMT formula.
r = annual rate / 100 / 12
Draw-period interest-only = drawn balance x r
Repayment PMT = balance x r x (1+r)^n / ((1+r)^n - 1), where n = repayment months
CLTV = (mortgage balance + HELOC drawn) / home value x 100
Max HELOC line = (home value x CLTV% / 100) - mortgage balance
Worked example
$450,000 home, $280,000 mortgage, $50,000 drawn, 8.5% rate, 5 years draw remaining, 20-year repayment:
- Current equity = $450,000 - $280,000 = $170,000
- Max HELOC at 85% CLTV = ($450,000 x 0.85) - $280,000 = $382,500 - $280,000 = $102,500
- CLTV = ($280,000 + $50,000) / $450,000 = 73.3%
- Monthly interest-only = $50,000 x 0.085 / 12 = $354.17
- Repayment PMT (20 yrs at 8.5%): r = 0.007083, n = 240 = $433.75/mo
Note: the HELOC rate is variable. If the prime rate rises, your monthly payment will increase. The CFPB recommends stress-testing your budget at a rate 2-3 percentage points higher than today's rate.
Understanding HELOC structure
A HELOC has two phases. In the draw period (commonly 10 years) you can borrow, repay and re-borrow up to your credit limit. Minimum monthly payments are typically interest-only on the outstanding balance.
At the end of the draw period, the line closes and the outstanding balance enters the repayment period (commonly 20 years). Payments now include both principal and interest, which means a significant jump in your monthly obligation. This is sometimes called the "payment shock" and the CFPB specifically warns borrowers to plan for it.
The HELOC credit limit is set by your lender based on the CLTV formula. If your home value falls, the lender may reduce or freeze your credit line under the terms of your agreement.
HELOC calculator: frequently asked questions
What is the difference between a HELOC and a home equity loan?
A HELOC is a revolving credit line, similar to a credit card: you draw what you need up to a limit, repay it, and draw again. A home equity loan gives you a lump sum at a fixed rate upfront. HELOCs typically have variable rates tied to the prime rate; home equity loans have a fixed rate. The CFPB explains both options at consumerfinance.gov/owning-a-home/loan-options/.
What is the draw period on a HELOC?
The draw period is typically 10 years. During this time you can borrow up to your credit limit and most lenders require only interest-only payments on the outstanding balance. Your minimum payment will vary each month as your balance changes.
Are HELOC interest rates fixed or variable?
Most HELOCs carry a variable rate, usually expressed as the prime rate plus a margin set by your lender. The prime rate changes when the Federal Reserve adjusts the federal funds rate. Some lenders offer a fixed-rate lock on a portion of your balance, but the underlying line is typically variable.
How does a HELOC compare to a cash-out refinance?
A cash-out refinance replaces your entire mortgage with a new, larger loan and gives you the difference in cash at a fixed rate. A HELOC sits on top of your existing mortgage and gives you a flexible credit line at a variable rate. A refi makes sense when current rates are lower than your existing mortgage; a HELOC avoids resetting the clock on your primary loan.
Is HELOC interest tax deductible?
Under the Tax Cuts and Jobs Act of 2017, HELOC interest is only deductible if the funds are used to buy, build or substantially improve the home that secures the loan. Interest used for other purposes (debt consolidation, vacations, etc.) is not deductible. Consult IRS Publication 936 and a tax professional for your specific situation.
What is CLTV and why does it matter for a HELOC?
Combined loan-to-value (CLTV) is the total of all loans secured by your home divided by the home's value. Most lenders cap CLTV at 80%-85% for a HELOC. For example, on a $450,000 home at 85% CLTV, total secured debt cannot exceed $382,500. If your existing mortgage is $280,000, your maximum HELOC line is $102,500.
Official sources
- CFPB: What is a home equity line of credit (HELOC)?
- CFPB: Understand loan options
- IRS Publication 936: Home Mortgage Interest Deduction (interest deductibility rules)
Reviewed by the CalculatorHub team, edited by James Graham, 13 June 2026. See our methodology. General information, not financial advice.