HELOC Calculator

This page has two HELOC tools. The first works out the monthly payments and total cost of a home equity line of credit across its draw and repayment periods. The second estimates how large a line you might qualify for, based on your home value, your remaining mortgage, and the loan-to-value limit your lender allows. Both are built for U.S. borrowers.

What a HELOC is

A home equity line of credit, or HELOC, is a revolving credit line secured by your home. It lets you borrow against your equity, but unlike a regular loan you do not take a lump sum up front. You draw money as you need it, up to a set credit limit, much like a credit card. A HELOC runs in two distinct phases:

• Draw period: the first 5 to 10 years, when you can withdraw funds up to the limit. Most lenders ask only for interest on the balance during this time, and you can borrow, repay, and borrow again as often as you like.
• Repayment period: the next 10 to 20 years, when withdrawals stop and each payment covers both principal and interest, like a standard loan.

Because a HELOC is secured by your home, its rate is usually lower than unsecured borrowing. But it is also revolving credit, so the rate is typically variable, set as an index plus a margin, which means your payment can move over the years.

How much you can borrow

Since your home is the collateral, lenders cap the line at a share of its value. The common limit is 80% to 85% of the home's value minus what you still owe on your mortgage. Say a home is worth $500,000 with a $210,000 mortgage balance; at an 80% loan-to-value limit the line would be $500,000 × 80% − $210,000 = $190,000. Most lenders also set an absolute ceiling, often around $1 million. The second calculator on this page runs that math for any home value, balance, and LTV.

Home value is not the only test. Lenders also look at credit history, and a score below about 630 often will not qualify. Your other debts matter too: a high debt-to-income ratio, such as 43% to 50%, can sink an application. The condition of the home, existing liens, and insurance can all factor in as well. The Debt-to-Income Ratio Calculator shows where you stand.

What a HELOC costs

Borrowing is never free, and a HELOC carries two kinds of cost. Upfront or closing costs include origination, appraisal, document, and title-search fees, and they often run 1% to 5% of the loan, easily thousands of dollars. Many lenders advertise a no-closing-cost HELOC, but they usually recover the money through a higher rate or an early-termination fee. Ongoing costs are mostly the interest plus fees over time: many HELOCs charge an annual fee to keep the line open during the draw period, and some add maintenance or per-withdrawal charges.

Because upfront costs, variable rates, and draw and repayment lengths differ so much between lenders, offers are hard to compare head to head. The first calculator can include closing costs and the annual fee, and the annual percentage rate (APR) it reports rolls the interest, closing costs, and annual fee into one yearly figure, which is the fairest way to line up competing offers.

How people use a HELOC, and the alternatives

A HELOC suits costs that arrive over time rather than all at once, like college tuition paid each semester or a remodel done in stages. The draw period lets you take only what you need, so you neither over-borrow nor come up short. The trade-offs are real, though. The variable rate makes future payments uncertain, and the switch from interest-only in the draw period to full principal and interest in the repayment period pushes a heavier bill into later years. Two other home-backed options are worth weighing:

• Home equity loan: a one-time lump sum repaid over a fixed term, usually at a fixed rate with a set monthly payment. It trades the HELOC's flexibility for a predictable schedule. Compare the two with our Home Equity Loan Calculator.
• Cash-out refinance: replaces your existing mortgage with a larger one and hands you the difference in cash. It makes the most sense when today's rates are below your current mortgage rate, and refinanced mortgage interest can qualify for the itemized tax deduction, which HELOC and home equity loan interest do not always. The Refinance Calculator covers that path.

Used carefully, a HELOC is a flexible, relatively low-cost way to tap your equity. Used carelessly, the variable rate and the two-stage payment structure can strain a budget, and because the loan is tied to your home, falling behind puts the house itself at risk.

The draw period, and the payment that follows it

A HELOC has two lives. During the draw period, usually ten years, you borrow and repay as you like, and many lenders ask only for the interest on what you owe. When the draw period ends the line closes, and the balance converts to a fully amortizing payment over the repayment period, usually another twenty years.

The change is abrupt. A $50,000 balance at 8% costs $333 a month in interest alone. Amortized over twenty years at the same rate the payment becomes $418, a quarter more, and every year the rate is higher makes the jump larger. Households that treated the draw period as the real cost are the ones this catches. Model the repayment payment before you draw the money, not ten years later.

The rate moves, and so can the line

Nearly all HELOCs are variable. The rate is the prime rate plus a margin set at origination, so when the Federal Reserve moves its target and prime follows, your payment moves within a billing cycle or two. A lifetime cap is disclosed in the agreement and is usually far above anything you would expect to see.

The line itself is less permanent than it looks. Under Regulation Z a lender may freeze a HELOC or cut the credit limit when the property value drops significantly below the appraisal, or when your financial circumstances deteriorate materially. Both happened at scale in 2008 and 2009, and homeowners who were counting on an untouched line as their emergency fund found it closed. A line is a promise with conditions attached, so it should not be the only cash reserve you keep.

One protection runs the other way. Because a HELOC on a primary residence is not purchase money, the Truth in Lending Act gives you three business days after closing to cancel it with no penalty.

The tax rule that catches most people

Interest on a HELOC is deductible only when the money is used to buy, build or substantially improve the home securing the loan, and total mortgage debt stays within $750,000 for a joint filer or $375,000 filing separately. The One Big Beautiful Bill Act, signed on 4 July 2025, made that rule permanent rather than letting it expire.

Using a line to consolidate credit cards or to pay tuition is common and often sensible, and none of that interest is deductible. Even qualifying use rarely helps, because the deduction only exists if you itemize, and for 2026 the standard deduction is $32,200 for a married couple filing jointly and $16,100 for a single filer. Most households clear that threshold only with large state tax and charitable deductions on top. Treat any tax saving as a bonus you have confirmed with your own return rather than a reason to borrow.