# HELOC Calculator

Calculate your HELOC borrowing power, interest-only payments, and total interest cost. See your available equity and maximum HELOC amount. Free calculator.

## What this calculates

Estimate your Home Equity Line of Credit borrowing power and costs with our free HELOC calculator. Enter your home value, mortgage balance, and desired amount to see interest-only payments, full repayment amounts, and total interest costs.

## Inputs

- **Home Value** ($) — min 0 — The current estimated market value of your home.
- **Mortgage Balance** ($) — min 0 — Your remaining mortgage balance.
- **HELOC Interest Rate** (%) — min 0, max 25 — The annual interest rate on the HELOC (often variable).
- **Desired HELOC Amount** ($) — min 0 — How much you want to borrow from the HELOC.
- **Draw Period (Years)** — min 1, max 20 — The period during which you can draw funds and make interest-only payments.
- **Repayment Period (Years)** — min 5, max 30 — The period after the draw period when you repay principal and interest.

## Outputs

- **Available Equity** — formatted as currency — Your total home equity (home value minus mortgage balance).
- **Maximum HELOC (85% LTV)** — formatted as currency — The maximum HELOC amount based on 85% combined LTV.
- **Interest-Only Payment** — formatted as currency — The monthly payment during the draw period (interest only).
- **Full Repayment Payment** — formatted as currency — The monthly payment during the repayment period (principal + interest).
- **Total Interest Cost** — formatted as currency — The total interest paid over the draw and repayment periods.

## Details

A Home Equity Line of Credit (HELOC) lets you borrow against the equity in your home. Most lenders allow a combined loan-to-value (CLTV) ratio of up to 85%, meaning your mortgage balance plus HELOC cannot exceed 85% of your home's value. For a $500,000 home with a $300,000 mortgage, the maximum HELOC would be $125,000 ($500,000 x 0.85 - $300,000).

HELOCs have two phases: the draw period (typically 5-10 years) and the repayment period (typically 10-20 years). During the draw period, you can borrow up to your limit and make interest-only payments. During the repayment period, you can no longer draw funds and must repay the principal plus interest, resulting in significantly higher monthly payments. This payment jump catches many borrowers off guard.

HELOC interest rates are typically variable, tied to the prime rate. This means your payments can increase if interest rates rise. Some lenders offer fixed-rate conversion options for a portion of the balance. Common uses for HELOCs include home improvements (which can increase home value), debt consolidation (replacing higher-rate debt), and emergency funds. Be cautious: since your home is collateral, defaulting on a HELOC can lead to foreclosure.

## Frequently Asked Questions

**Q: What is the difference between a HELOC and a home equity loan?**

A: A HELOC is a revolving line of credit with variable rates and flexible borrowing during the draw period. A home equity loan is a lump sum with a fixed rate and fixed monthly payments. A HELOC is better for ongoing or uncertain expenses (like renovations), while a home equity loan is better for one-time expenses where you want payment certainty.

**Q: How much can I borrow with a HELOC?**

A: Most lenders allow a combined loan-to-value (CLTV) ratio of up to 85%. Maximum HELOC = Home Value x 0.85 - Mortgage Balance. Some lenders go up to 90% CLTV for borrowers with excellent credit. You also need to qualify based on income, credit score (typically 680+), and debt-to-income ratio.

**Q: Is HELOC interest tax-deductible?**

A: Under the Tax Cuts and Jobs Act of 2017, HELOC interest is only tax-deductible if the funds are used to buy, build, or substantially improve the home that secures the loan. Using a HELOC for debt consolidation, education, or other purposes does not qualify for the interest deduction. The total mortgage debt (including HELOC) must be under $750,000.

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Source: https://vastcalc.com/calculators/finance/heloc
Category: Finance
Last updated: 2026-04-21