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HELOC Calculator
About the HELOC Calculator
Estimate payments on a home equity line of credit (HELOC), which has an interest-only draw period followed by a repayment period.
How to use the HELOC Calculator
- Enter the Amount Drawn and Interest Rate (%).
- Choose the Draw Period and the Repayment Period.
- Press Calculate to see the payment in each phase.
Formula and method
Draw period: Payment = Balance × annual rate ÷ 12 (interest only). Repayment period: the standard loan formula on the remaining balance.
Worked example
Available equity. If a home is worth 400,000, the lender allows a combined loan-to-value of 80% (320,000) and you owe 250,000, you could borrow up to about 70,000.
When to use the HELOC Calculator
- Estimating how much you could borrow against your home equity.
- Comparing the interest-only draw period with the repayment period.
- Planning a renovation budget.
Common mistakes to avoid
- Forgetting that your home secures the loan, so missed payments put it at risk.
- Ignoring that HELOC rates are often variable and can rise.
Tips
- HELOC rates are usually variable, so payments can rise.
- Your home is the collateral. Borrow carefully.
Frequently Asked Questions
A HELOC is a revolving credit line you draw on as needed. A home equity loan is a fixed lump sum with fixed payments.
The first years of a HELOC in which you can borrow and often pay only interest. After it ends you repay principal and interest.