How to use this calculator
Enter your home's current estimated value, your remaining first-mortgage balance, and your credit score range. The calculator computes available equity (home value − first-mortgage balance) and applies typical lender combined-LTV caps — most HELOCs allow you to borrow up to 80–85% combined LTV across your first mortgage and the HELOC. Enter the line amount you'd like to draw, the variable rate you've been quoted (HELOC rates are usually Prime + a margin — Prime is published daily by major banks), and the draw period you expect to use. The calculator returns interest-only monthly payments during the draw period, the principal-and-interest payment during the repayment period, and total interest paid over the life of the line. Most HELOCs offer a 10-year draw period followed by a 20-year repayment period. Use this tool to size the line you actually need rather than maxing out — you only pay interest on what you draw.
How the math works
HELOC math has two phases. During the draw period, monthly payments are typically interest-only: drawn balance × current rate ÷ 12. The interest-only payment scales linearly with what you've actually drawn — so drawing more raises the payment proportionally, and paying down the drawn balance lowers it. When the draw period ends, the line converts to a repayment period (usually 15 or 20 years). The remaining balance amortizes using the same formula as a fixed mortgage: P × r / (1 − (1 + r)^−n). The repayment-period monthly payment is meaningfully higher than the interest-only draw-period payment because principal is now being paid down on top of interest. Total interest paid depends on draw behavior. Carrying a high balance through the full draw period and then amortizing over the repayment period produces the largest cumulative interest. Paying down principal during the draw period drops total interest sharply. Use the calculator with current Prime + margin pricing — Prime moves with the federal funds rate target, so HELOC rates can change between application and close.
When to use this vs the others
Use this calculator when you want to size a HELOC against your existing equity and forecast the monthly payment under different draw scenarios. If you're deciding between a HELOC and a cash-out refinance, the cash-out refinance calculator handles the alternative scenario, and the HELOC vs cash-out comparison page lays out the structural tradeoffs side by side. For a fixed-rate alternative, a home equity loan (a fixed-payment second mortgage) isn't covered by this calculator — talk to your loan officer about that option separately.
Frequently asked questions
How is a HELOC's variable rate calculated?
Most HELOCs price as Prime + a margin (e.g., Prime + 0.5%). Prime rate moves with the Federal Reserve's federal funds rate target — so as Prime moves, your HELOC rate and payment move with it. That variable-rate exposure is the main structural risk vs. a fixed-rate cash-out refinance. Check current Prime on the federal funds page or with your bank before running scenarios.
Do I pay interest on the full line or just what I draw?
Just what you draw. If you have a $100,000 line approved and you've only drawn $20,000, you pay interest on the $20,000 outstanding balance. The remaining $80,000 sits available with no interest charged. That's the core advantage of HELOCs over a one-time cash-out refinance.
Can I deduct HELOC interest on my taxes?
Interest on HELOC funds used to buy, build, or substantially improve the home securing the loan is generally deductible (subject to the standard mortgage-interest cap). Interest on HELOC funds used for other purposes — debt consolidation, education, investments — is generally not deductible. Talk to your tax professional for your specific situation.
What happens when my HELOC's draw period ends?
The outstanding balance converts to a fully amortizing loan over the repayment period (usually 15–20 years). You can no longer draw new funds, and your monthly payment increases — sometimes dramatically — because you're now paying principal in addition to interest. Plan for this transition before the draw period ends.
How much can I borrow with a HELOC?
Most lenders allow up to 80–85% combined loan-to-value (CLTV) across your first mortgage and the HELOC. On a $500,000 home with a $250,000 first mortgage, an 85% CLTV cap gives you a $175,000 HELOC line. Stronger credit and lower DTI can sometimes push CLTV to 90%, but that's the upper edge.