HELOC Calculator
Use your estimated market value, not the original purchase price.
A home equity line of credit lets you borrow against the equity in your property up to a ceiling set by a combined loan-to-value ratio. Enter your home’s value, the balance of your first mortgage, your credit profile and the lender’s CLTV limit, and the calculator returns the line amount, the interest-only monthly payment during the draw period, and the amortised payment you will face once repayment starts.
How to estimate a HELOC
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1
Enter your home value and mortgage balance
Use a recent appraisal or Zillow-style estimate for value, and the current payoff from your mortgage statement.
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2
Set the CLTV limit
Most lenders cap combined loan-to-value at 80-90%. The calculator uses the limit to find the maximum you can borrow.
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3
Pick draw and repayment terms
Typical HELOCs have a 10-year draw period and a 10-20 year repayment period, with variable rate.
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4
Review payment scenarios
See interest-only payments during the draw phase and fully amortised payments during repayment.
How a HELOC works in numbers
A HELOC is a revolving line, not a lump-sum loan. You have a ceiling (the “line amount”) and can borrow, repay and borrow again during the draw period.
Line amount math
Maximum line = (Home value × CLTV limit) − Current mortgage balance
Example: a home worth $500,000 with a $300,000 mortgage at an 85% CLTV cap:
Maximum line = (500,000 × 0.85) − 300,000 = 425,000 − 300,000 = $125,000
Draw vs repayment phases
| Phase | Typical length | Payment type |
|---|---|---|
| Draw | 5-10 years | Interest only on current balance |
| Repayment | 10-20 years | Principal + interest, fully amortising |
During the draw phase, a 7.5% APR on a $50,000 balance means 50,000 × 0.075 / 12 = $312.50 per month. When repayment starts, the same $50,000 over 20 years at 7.5% jumps to roughly $402.78 per month.
Variable rate exposure
Most HELOCs track the US prime rate plus a margin (prime + 1% is typical for strong credit). If prime rises 100 basis points, your interest-only payment rises proportionally. Stress-test your budget against prime + 3%.
Fees and traps to watch
- Early closure fee: 1-2% of the line if you close it within 3 years.
- Annual fee: $50-$100 per year during the draw period.
- Minimum draw: some lenders require an initial draw of 50-75% of the line.
- Balloon payment: older HELOCs end the draw with a full balance due instead of converting to amortisation — read the disclosure.
Frequently Asked Questions
During the draw period you only owe interest on the money you have actually borrowed, not the full line. A $100,000 line with a $10,000 draw charges interest only on the $10,000. Once repayment begins, the full drawn balance amortises and the payment rises sharply.
LTV compares one loan to the home value. CLTV adds every lien — first mortgage, HELOC, any second mortgage — against the value. A lender that caps CLTV at 85% will fund a HELOC only up to the point where your total debt reaches that limit.
Under current US law, HELOC interest is deductible only if the funds are used to buy, build or substantially improve the home that secures the loan, and subject to the combined mortgage debt cap. Rules differ by jurisdiction — check with a tax professional.
You convert unsecured debt (credit cards) into secured debt (your home). If you miss payments, the lender can foreclose. HELOCs are cheaper because of that security, so the trade-off is real — use them only if you are confident the consolidation reduces your total cost and you have a plan to pay it back.
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