HELOC Calculator
Plan a home equity line of credit end to end. See how much you can borrow against your equity, the interest-only payment during the draw period, the higher amortizing payment once repayment starts, total interest over the life of the line, the true APR once closing costs and annual fees are counted, and a year by year payoff schedule.
Formula
Worked example
A $400,000 home with an 85% LTV cap allows $340,000 of total debt. Subtract a $220,000 mortgage and $120,000 is available. Draw $40,000 at 8.5%: the interest-only payment is 40,000 × 0.085 ÷ 12 ≈ $283.33 a month for the 10 year draw period. Over a 20 year repayment, the amortizing payment is about $347 a month, and total interest across the full life of the line is roughly $77,000.
How a HELOC credit limit is set
Lenders cap how much you can owe against your home using a combined loan-to-value ratio, or CLTV. They multiply your home value by the maximum LTV they allow, often between 80% and 90%, to find the total debt your home can carry. Subtracting your existing first-mortgage balance leaves the room available for a home equity line of credit. If your mortgage already reaches that cap, there is nothing left to borrow until you pay it down or your home appreciates.
Two phases: draw period and repayment period
A HELOC has two stages. During the draw period, commonly ten years, you can borrow, repay, and re-borrow up to your limit, and most lenders only require interest on the balance you have actually used. That interest-only payment is the balance times the annual rate divided by twelve, and it does not reduce principal. When the draw period ends the line enters the repayment period, often twenty years, and the payment switches to a fully amortizing principal-plus-interest figure that pays the balance down to zero. This calculator shows both payments side by side and a year by year schedule so the step up is no surprise.
Closing costs, annual fees and the true APR
The quoted interest rate is not the whole story. Turn on closing costs and fees to fold in origination, appraisal and title charges (entered as a dollar amount or a percent of the draw) plus any annual account fee. The calculator then solves for the true annual percentage rate, the single rate that accounts for the interest, the upfront costs and the recurring fees together. The APR is the right number for comparing one lender against another, because two lines with the same headline rate can cost very differently once fees are counted.
Variable rates and your home as collateral
HELOC rates are usually variable, tied to a published index such as the prime rate plus a margin, so your payment changes as rates move. Because the line is secured by your home, missing payments can ultimately lead to foreclosure. These figures are estimates for planning only. Your actual limit, rate, and terms depend on your credit, income, and the lender, so confirm the details with a qualified lender or financial professional before borrowing.
Typical combined LTV limits
| Borrower profile | Typical max CLTV | Tier |
|---|---|---|
| Conservative / lower credit | 80% | Low |
| Standard qualified borrower | 85% | Normal |
| Strong credit, some lenders | 90% | High |
Maximum total debt lenders commonly allow against a home, including the first mortgage.
Frequently asked questions
How much can I borrow with a HELOC?
Multiply your home value by the lender maximum combined LTV (often 80-90%) to get the total debt your home can carry, then subtract your current mortgage balance. The remainder is roughly the line you can open, subject to your credit and income.
What is the difference between the draw and repayment payments?
During the draw period you usually pay interest only, calculated as the balance times the annual rate divided by 12. Once the draw period ends, the repayment period begins and the payment switches to a fully amortizing principal-plus-interest amount that pays the balance to zero. The repayment payment is typically much larger, so the calculator shows both.
Why is the true APR higher than the interest rate?
The interest rate covers only the cost of the money borrowed. The APR also folds in closing costs and any annual fee, spread across the life of the line, so it reflects what the credit actually costs. Two HELOCs with the same rate can have different APRs, which is why the APR is the better number for comparing lenders.
Does the interest-only payment pay off the loan?
No. Interest-only payments cover only the cost of borrowing and leave the principal untouched. The balance stays the same unless you pay extra, and payments rise once the draw period ends and repayment of principal begins.