Free Calculator

HELOC Calculator

Estimate your home equity line of credit limit and monthly interest payment. Enter your home value, mortgage balance, and desired draw amount to see how much you can borrow and what it will cost.

HELOC Details

Calculate your available equity and payments

Home value ($)

Mortgage balance ($)

Credit limit (%)

Interest rate (%)

Draw period (years)

Repayment period (years)

Expected draw amount ($)

Your Results

Estimated availability and payments

Enter your home and loan details to see your HELOC options

Quick Answers

Max CLTV (typical)

80% to 85%

Typical draw period

5 to 10 years

Rate type

Variable (prime-based)

Draw period payments

Interest only

Frequently asked questions

Common questions about home equity lines of credit.

How is a HELOC different from a home equity loan?

A HELOC is a revolving line of credit secured by your home equity, similar in structure to a credit card -- you draw what you need, repay it, and draw again up to your limit during the draw period, typically 10 years. A home equity loan delivers a fixed lump sum upfront with a fixed interest rate and fixed monthly payments for the full term. HELOCs usually carry variable rates that adjust with the prime rate, so your payment can change over time. Home equity loans offer payment predictability. For ongoing or uncertain expenses like a home renovation, a HELOC gives flexibility; for a one-time known expense, a home equity loan may be more appropriate.

How much equity do I need to qualify for a HELOC?

Most lenders require you to retain at least 15% to 20% equity in your home after the HELOC is factored in, meaning your combined loan-to-value ratio (CLTV) cannot exceed 80% to 85%. To calculate your available equity: take your home's current appraised value, multiply by 0.80 (or the lender's maximum CLTV), and subtract your current mortgage balance. For example, a $400,000 home with an 80% CLTV limit and a $250,000 mortgage balance allows a maximum HELOC of $70,000 ($320,000 - $250,000). Lenders also evaluate your credit score, income, and debt-to-income ratio before approving the line.

What is the draw period and repayment period on a HELOC?

A HELOC has two distinct phases. The draw period -- typically 5 to 10 years -- is when you can borrow against the line, and most lenders only require interest payments on the outstanding balance during this time. The repayment period -- typically 10 to 20 years -- begins when the draw period ends, and you can no longer borrow. During repayment, your payments shift to principal plus interest on whatever balance remains. This transition can cause a significant payment increase, sometimes called payment shock, especially if you drew heavily during the draw period and rates have risen.

Are HELOC interest payments tax deductible?

Under current tax law following the Tax Cuts and Jobs Act of 2017, HELOC interest is only deductible if the funds are used to buy, build, or substantially improve the home securing the loan. Interest on a HELOC used to pay off credit cards, fund a vacation, or cover living expenses is no longer deductible. The deduction is also subject to the overall $750,000 limit on mortgage debt for loans originated after December 15, 2017. Tax rules can change, and individual situations vary -- consult a qualified tax professional before relying on a HELOC interest deduction.

What is the risk of using a HELOC?

The primary risk is that a HELOC is secured by your home -- if you cannot make payments, the lender can foreclose. Because HELOC rates are typically variable and tied to the prime rate, your payment can increase significantly if rates rise. A $50,000 HELOC balance at 8% costs about $333 per month in interest-only payments; if the rate rises to 11%, that same balance costs $458 per month. Additionally, lenders can reduce or freeze your credit line during periods of declining home values, which can happen precisely when you might most need the funds. Use a HELOC for planned expenses with clear repayment timelines, not as an emergency cushion.

About this calculator

This HELOC calculator estimates your maximum credit limit based on your home's current value, outstanding mortgage balance, and a lender-specified combined loan-to-value (CLTV) ratio. It also calculates the monthly interest-only payment on a specified draw amount during the draw period. It does not model origination fees, annual fees, or the transition to principal-and-interest repayment at draw period end.

HELOC underwriting guidelines and CLTV thresholds referenced on this page are consistent with standards published by the Consumer Financial Protection Bureau (CFPB). Tax deductibility information reflects the Tax Cuts and Jobs Act of 2017 as currently in effect.

MyLoanCalcs.com provides free educational calculators and does not offer financial advice, home equity lending, or mortgage services. HELOC terms vary significantly by lender -- consult a licensed mortgage professional and a tax advisor before opening a home equity line of credit.

Before You Calculate

Understanding Your HELOC Calculator Results

A Home Equity Line of Credit can be one of the most flexible and cost-effective borrowing tools available to homeowners -- or a significant financial risk if misunderstood. The difference usually comes down to how well you understand the two-phase structure, the variable rate exposure, and the real payment obligations before you sign.

This guide walks through exactly how to interpret every number this calculator produces, what the results do and do not account for, and what to evaluate before applying for a HELOC.

How to Read Your HELOC Calculator Results

Follow these six steps to get a complete picture of your borrowing capacity and true costs.

Enter your home value accurately

Start with a realistic current market value for your home, not what you paid for it. Use a recent appraisal, a licensed appraiser estimate, or a current comparable sales report from a real estate agent. Overstating your home value will inflate your available credit line estimate. Lenders will order their own appraisal before approving your HELOC, and the final credit line will be based on that figure.

Pro tip: Check Zillow, Redfin, or a local agent for recent comparable sales in your neighborhood as a starting estimate.

Understand the LTV limit

Most lenders cap your total outstanding debt -- your first mortgage plus the HELOC -- at 80% to 85% of your appraised home value. This is called the Combined Loan-to-Value (CLTV) ratio. For example, if your home is worth $400,000 and your lender uses an 85% CLTV, the maximum total debt is $340,000. Subtract your current mortgage balance to get your maximum HELOC credit line.

Pro tip: The calculator defaults to 85% LTV. Some lenders offer up to 90%, but those products typically carry higher rates.

Know the difference between draw and repayment periods

A HELOC has two distinct phases. During the draw period -- typically 5 to 10 years -- you can borrow up to your limit, repay, and borrow again. Many lenders require interest-only payments during this phase, which keeps payments low but builds no equity. When the draw period ends, the loan enters repayment, usually 10 to 20 years, where you pay both principal and interest. Your monthly payment can jump significantly at this transition.

Pro tip: Run the calculator for both the draw period and repayment period to see the full range of payments you may face.

Account for the variable interest rate

Most HELOCs carry a variable rate tied to the prime rate, which moves with Federal Reserve policy. If you open a HELOC at 8.5% today and the Fed raises rates by 1%, your rate becomes 9.5% -- and your payment rises accordingly. Some lenders offer a rate lock feature that lets you convert part of your balance to a fixed rate. Always model your payments at a rate 1% to 2% higher than the current rate to stress-test affordability.

Pro tip: The Federal Reserve publishes the current federal funds rate target at federalreserve.gov. The prime rate is typically the Fed funds rate plus 3%.

Understand what you can use a HELOC for

A HELOC is most beneficial when used for home improvements that increase the property value, consolidating high-interest debt at a lower rate, or planned large expenses like college tuition where you need funds in stages. It is a poor choice for discretionary spending or lifestyle inflation because your home is the collateral. If you cannot repay, the lender can foreclose. Use the flexibility of a revolving line intentionally, not as a fallback credit source.

Pro tip: HELOC interest may be tax-deductible when funds are used to buy, build, or substantially improve the home securing the loan. Consult a tax professional.

Compare the total cost, not just the draw period payment

The interest-only payment during the draw period may look very affordable. But the full cost of a HELOC includes all interest paid over both periods plus any origination fees, annual fees, and closing costs. Run the calculator at your expected balance and review the repayment period payment, not just the draw period minimum. The repayment payment is the number you need to be confident you can sustain.

Pro tip: Ask lenders for the full fee schedule upfront: origination fee, annual fee, early closure fee, and inactivity fee. These can add hundreds of dollars per year.

3 Common Mistakes When Using a HELOC

What to Do Next

Once you have run your estimate, these guides will help you understand the key terms, compare your options, and move forward with confidence.

What Is Home Equity?

How equity builds and how lenders measure it.

What Is Loan-to-Value Ratio?

The key metric that determines how much you can borrow.

Mortgage Calculator

Estimate your primary mortgage payment.

Refinance Calculator

See if a cash-out refinance beats a HELOC for your situation.

What Is APR?

Understand the true annual cost of borrowing.

How to Compare Loan Offers

A framework for evaluating any loan side by side.

Methodology

How It Works

A HELOC limit is determined by your available home equity and the lender's maximum combined loan-to-value (CLTV) ratio -- typically 80% to 85% of your home's appraised value minus your current mortgage balance.

Maximum HELOC calculation:

HELOC Limit = (Home Value x Max CLTV) - Mortgage Balance

Home Value = Current appraised or estimated market value
Max CLTV = Lender's combined loan-to-value limit (commonly 0.80)
Mortgage Balance = What you currently owe on your first mortgage

During the draw period, you pay interest only on the outstanding balance. The calculator shows your estimated credit limit and the monthly interest cost at a given draw amount and rate.

About the Author: De Van Do

De Van Do is the author and site builder behind MyLoanCalcs.com. With a background in technology, De Van Do built this site out of an interest in making financial calculations clear and accessible. De Van Do is not a licensed loan officer, mortgage broker, or financial advisor -- content on this site is for informational purposes only.