What does HELOC Calculator do?
HELOC calculator: estimate borrowing room from home value, your lender’s CLTV limit and mortgage balance, plus draw period and repayment payments.
- Price
- Free
- Account
- Not required
- Processing
- Entirely in your browser; your data and files are not uploaded
- Works on
- Any modern browser on desktop, tablet or phone
- Region
- United States (USD)
- Category
- Financial Calculators
How to use the heloc calculator
- Enter your home’s estimated value and what you still owe on your mortgage.
- Enter your lender’s maximum combined loan-to-value (CLTV). 80% is filled in as an example only.
- Enter the amount you plan to borrow, the rate, the draw period and the repayment period.
- Read your borrowing room, the interest-only payment during the draw period and the payment once repayment starts.
Worked example
$500,000 home, $300,000 owed, 80% CLTV, borrowing $50,000 at 8.5%
80% of $500,000 is $400,000; minus the $300,000 mortgage leaves $100,000 of borrowing room. Borrowing $50,000 at 8.5%, the interest-only payment during a 10-year draw period is $354.17. When the 20-year repayment period starts, the payment rises to $433.91. Total interest is $96,639.63, against $88,400.57 for a fixed 30-year home equity loan at the same rate ($384.46 a month).
How it works
Borrowing room = home value × maximum CLTV − mortgage balance (never below zero). Draw period payment = amount borrowed × rate ÷ 12 (interest only). Repayment payment = P × r / (1 − (1 + r)−n) with n = repayment years × 12. Total interest = interest-only payments for the draw period + interest in the repayment schedule. The home equity loan comparison amortizes the same amount over the draw and repayment years combined.
Assumptions
- The CLTV limit is your input. Lenders set their own limits; the 80% default is an example, not a standard.
- The full amount is drawn at the start and stays drawn until repayment begins.
- The rate is held constant. Most HELOCs have variable rates that move with an index.
- Fees, annual charges and minimum draw rules are not included.
Frequently asked questions
How much can I borrow with a HELOC?
Lenders usually cap total debt secured by the home at a percentage of its value (the combined loan-to-value, CLTV). Multiply the value by that percentage and subtract what you owe. Credit, income and the appraisal also affect the final limit.
Why does the payment rise after the draw period?
During the draw period many HELOCs require interest-only payments, so the balance does not fall. When repayment starts, you pay principal and interest over the remaining years, which raises the payment.
What is the difference between a HELOC and a home equity loan?
A HELOC is a revolving line you draw from as needed, usually at a variable rate. A home equity loan is a lump sum with fixed payments from day one, usually at a fixed rate.
Is HELOC interest tax deductible?
It depends on how the money is used and on current IRS rules. Check IRS Publication 936 or ask a tax professional; this calculator does not model taxes.
Limitations
- Does not model variable rates, partial draws or minimum payment rules.
- Your home is security for the line. Missing payments puts it at risk.