Calcs for Life

HELOC Calculator

HELOC payments during the interest-only draw period and the higher payment once repayment starts.

$
$
%
$
%
years
years

Interest-only payment (draw period)

$354.17

Payment during repayment period
$433.91
Payment increase at repayment
$79.74
Interest during draw period
$42,500
Interest during repayment
$54,139
Total interest
$96,639
Estimated maximum credit line
$90,000
Amount borrowed: 34.1%Draw-period interest: 29.0%Repayment interest: 36.9%
  • Amount borrowed$50,00034.1%
  • Draw-period interest$42,50029.0%
  • Repayment interest$54,13936.9%

HELOC rates are usually variable; payments change when the rate does.

How it works

A home equity line of credit has two phases. During the draw period, usually 10 years, you can borrow as needed and many lenders require only interest payments. During the repayment period, usually 10–20 years, you can no longer draw and the balance is amortized like a regular loan.

The jump from interest-only to full principal-and-interest payments can be large. This calculator shows both payments for the same balance so you can plan for it.

Lenders typically allow a combined loan-to-value (mortgage plus HELOC) of 80–90% of your home value, which sets the maximum credit line.

Formula

Draw period payment = balance × rate ÷ 12; repayment = balance × r(1 + r)^n ÷ ((1 + r)^n − 1)

Questions people ask

Are HELOC rates fixed or variable?

Most are variable, tied to the prime rate plus a margin. Some lenders let you lock a fixed rate on part of the balance.

Is HELOC interest tax-deductible?

Under current US rules, interest may be deductible only if the funds are used to buy, build or substantially improve the home securing the loan, and you itemize. Check with a tax professional.

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

A home equity loan is a lump sum with a fixed rate and payment. A HELOC is a revolving line you draw from as needed, usually with a variable rate.