HELOC Calculator 2026
Variable: prime + the lender's margin
Maximum line of credit
$150,000
- Drawn at closing
- $60,000
- Remaining credit available
- $90,000
- Interest-only payment (10 yr draw)
- $425
- Principal + interest (20 yr repayment)
- $521
- Payment increase when the draw period ends
- +$96
- Interest paid during the draw period
- $51,000
- Interest paid during repayment
- $64,967
- Total interest over both periods
- $115,967
If the rate climbs before you repay
| Rate | Draw-period payment | Repayment payment |
|---|---|---|
| 8.50% (today) | $425.00 | $520.69 |
| +1 pt → 9.50% | $475.00 | $559.28 |
| +2 pt → 10.50% | $525.00 | $599.03 |
| +3 pt → 11.50% | $575.00 | $639.86 |
Credit limit at different lender caps
| Combined LTV cap | Maximum credit line | vs. your selected cap |
|---|---|---|
| 80% | $150,000 | — |
| 85% | $175,000 | +$25,000 |
| 90% | $200,000 | +$50,000 |
Estimates only: closing costs, annual fees, and early-closure penalties are not included, and the draw period is treated as interest-only with no capitalized interest. A HELOC keeps your first mortgage in place — if you would rather replace it, compare the refinance calculator or check how much house your income supports with the affordability calculator.
A $500,000 home with a $250,000 mortgage supports a $150,000 HELOC at an 80% combined loan-to-value cap. Drawing $60,000 at 8.5% costs $425 a month interest-only during a 10-year draw period — $51,000 of interest and not one dollar of principal — then $520.69 a month for 20 years of repayment, for $115,967 of total interest on a $60,000 loan.
How the credit limit is calculated
A HELOC is a second lien, so the lender caps the combined loan-to-value of both loans:
maximum line = home value × CLTV cap − existing mortgage balance
With a $500,000 home, a $250,000 mortgage, and an 80% cap: 500,000 × 0.80 = $400,000, minus $250,000 = $150,000. Raise the cap to 85% and the line becomes $175,000; at 90% it is $200,000. That single choice moves the limit by tens of thousands, and lenders differ — 80% is common for a full line, 85–90% shows up with stronger credit or at credit unions.
Two things the formula hides: lenders also cap by a maximum dollar amount (often $250,000–$500,000) and by your debt-to-income ratio. A high income does not raise a CLTV cap, and a low debt load does not raise a home value.
Two phases, two very different payments
HELOC repayment is split into a draw period and a repayment period, and the payment changes shape between them:
| Phase | Typical length | What you pay | On a $60,000 draw at 8.5% |
|---|---|---|---|
| Draw period | 10 years | Interest only | $425.00 / month |
| Repayment period | 20 years | Principal + interest | $520.69 / month |
During the draw period you can borrow, repay, and borrow again up to the limit — it behaves like a credit card secured by your house. Most HELOCs let you pay principal voluntarily, but nothing forces you to, and the minimum is interest only.
The interest-only trap, in numbers
Ten years of paying $425 a month on a $60,000 draw is $51,000 of interest, and the balance is still $60,000 when the draw period ends. The interest alone is 85% of what you borrowed, with nothing to show for it.
Add the 20-year repayment and total interest reaches $115,966.55 — $60,000 borrowed, $175,966.55 paid back. A 20-year home equity loan at the same 8.5% costs $64,966.55 of interest on the same $60,000, because principal is reduced from month one. The gap — $51,000 — is exactly the price of the interest-only decade.
What happens when the draw period ends
The payment does not just switch from interest to principal-and-interest — it switches onto a fully amortizing schedule with a fixed end date, and the new payment can be several times larger depending on the repayment term the lender allows:
- 20-year repayment: $520.69 a month, a $95.69 increase over the interest-only payment
- 10-year repayment: $743.91 a month, a $318.91 increase
Lenders that offer only a 10-year repayment turn a comfortable $425 payment into $744 without any change in the balance. That is the "payment shock" borrowers get caught by, and it is entirely predictable from the terms in your closing documents — which is why the repayment length is an input here, not a footnote.
Variable rate, so model the upside-down side
Almost every HELOC is priced at prime plus a margin, and the rate resets as prime moves. On a $60,000 draw at 8.5%:
- +1 point (9.5%): $475 a month during the draw, $559.28 during repayment
- +2 points (10.5%): $525 a month, $599.03 during repayment
- +3 points (11.5%): $575 a month, $639.86 during repayment
The rate matters twice: it raises what you pay now, and the repayment payment is calculated from whatever the rate is when the draw period ends. Repricing from 8.5% to 11.5% adds 35% to the draw-period payment and 23% to the repayment payment.
HELOC vs. cash-out refinance vs. home equity loan
- HELOC — variable rate, interest-only option, reusable line. Best when the need is staged (a renovation paid in draws) or short-term.
- Home equity loan — fixed rate, fixed term, lump sum, principal repaid from month one. Best when you know the exact amount and want a fixed payment.
- Cash-out refinance — replaces your first mortgage at today's rate, so it only works if the new rate beats your current one; closing costs are the highest of the three.
A HELOC keeps your existing low-rate mortgage intact, which is the main reason it stays popular when first-mortgage rates are higher than the rate on the loan you already have.
How to use this calculator
- Enter the home's current value — an appraisal or a conservative estimate, not the Zillow zestimate.
- Enter the balance still owed on your first mortgage.
- Pick the CLTV cap the lender quoted (80%, 85%, or 90%).
- Enter the amount you want to draw and the current APR — prime plus margin, from your offer letter.
- Set the draw and repayment lengths from the same letter.
- Read the two payments, the increase between them, and the total interest across both phases.
Frequently asked questions
How much can I borrow with a HELOC?
It depends on the combined loan-to-value cap. With a $500,000 home, a $250,000 mortgage balance, and an 80% cap, the maximum line is $150,000. At 85% it is $175,000, at 90% $200,000 — before the lender's own dollar cap and your debt-to-income limits.
Is a HELOC interest-only?
During the draw period, usually yes — the minimum payment covers interest only. In the repayment period it becomes principal plus interest, amortized over 10 to 20 years. On a $60,000 draw at 8.5%, that is $425 a month, then $520.69 over 20 years.
What is the catch with a HELOC?
The draw period can retire no principal at all: $425 a month for 10 years is $51,000 of interest and still a $60,000 balance. Then the payment jumps when repayment starts, and because the rate is variable it can jump again.
Is a HELOC cheaper than a cash-out refinance?
Usually cheaper to open — often no closing costs versus 2–5% on a refinance. But the rate is variable and typically higher than a first mortgage. If your existing mortgage rate is below today's market, a HELOC preserves it; if it is above, a cash-out refinance may cost less overall.
Can the lender freeze my HELOC?
Yes. Lenders can suspend or reduce a line if home values fall sharply, if your credit deteriorates, or in a declared disaster area. A freeze does not cancel the balance you already owe — it stops further draws, and repayment terms continue as written.
How is a HELOC payment calculated?
Draw period: balance × APR ÷ 12. Repayment period: standard amortization of the remaining balance over the repayment term. This calculator treats the draw period as interest-only with interest paid monthly and no capitalized interest.
Data sources: The CLTV formula (home value × cap − first-mortgage balance) is the standard underwriting method used by US lenders. Payments use simple interest during the draw period and standard amortization during repayment, with the rate held constant in the main result and stress-tested at +1, +2, and +3 points. HELOC APRs are typically priced at the prime rate plus a margin and reset with prime. Closing costs, annual fees, early-closure penalties, and capitalized interest are not modeled. Everything runs in your browser. Compare a full replacement loan with the refinance calculator, or check what your income supports using the how much house calculator.