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HELOC Calculator

Updated · By the CalculatorDash editorial team · How we check our maths

Quick answer

Lenders usually let you borrow up to 80–85% of your home's value minus your mortgage. On a $450,000 home with $250,000 owed and an 85% limit, the line is about $132,500. Drawing $50,000 at 8.5% costs about $354 a month interest-only, rising to about $434 a month over a 20-year repayment period.

HELOC payments

$
$
% of value
$
%

Available credit line

$132,500

Interest-only payment (draw period)
$354
Payment in repayment period
$434
Interest over repayment period
$54,139
Combined loan-to-value after draw
66.7%

HELOC rates are usually variable, so real payments change with the prime rate.

How this calculator works

A home equity line of credit (HELOC) works like a credit card secured by your house. During the draw period, often ten years, you can borrow and repay as you like and many lenders only require interest payments. After that the line closes and the balance is repaid with principal and interest over a set repayment period.

Your limit is based on combined loan-to-value (CLTV): the lender multiplies your home's value by its maximum CLTV, then subtracts what you still owe on the mortgage. The calculator shows that limit, then the two payment stages for the amount you actually plan to use.

The jump from interest-only to full repayment is where people get caught out. Plan for the higher payment from the start, and remember that most HELOCs have variable rates tied to the prime rate.

The formula

Credit line
home value × max CLTV − mortgage balance
Interest-only payment
amount drawn × rate ÷ 12
Repayment payment
standard amortisation of the drawn amount over the repayment period

Worked example

$450,000 × 85% = $382,500. Subtract the $250,000 mortgage and the line is $132,500. Drawing $50,000 at 8.5% costs $354 a month interest-only. Repaying it over 20 years costs about $434 a month and about $54,100 in interest.

Tips

  1. 01Use a HELOC for things that add lasting value, such as renovations, rather than everyday spending.
  2. 02Ask whether the lender charges an annual fee, an early-closure fee or a minimum draw.
  3. 03Pay some principal during the draw period so the repayment payment is smaller.

Frequently asked questions

How much can I borrow with a HELOC?

Typically up to 80–85% of your home's value minus your mortgage balance. Lenders also check income, debts and credit score.

Is HELOC interest tax deductible?

In the US, interest can be deductible when the money is used to buy, build or substantially improve the home that secures the loan and you itemise. Check current IRS rules or ask a tax professional.

HELOC or home equity loan?

A home equity loan gives you a lump sum at a fixed rate with fixed payments. A HELOC is flexible and you only pay interest on what you use, but the rate usually floats.

What happens when the draw period ends?

You can no longer borrow, and payments switch to principal plus interest, which can raise the payment sharply.