What this calculator does
Find out how much you might borrow on a home equity line of credit, and what your payments would look like. A HELOC is a credit line backed by your home, a bit like a credit card with a much bigger limit. Enter your home's value, what you owe, how much you plan to use and the rate. You'll see your available credit, both monthly payments and the total interest.
A HELOC usually has two stages. During the draw period, you can take money out, and the payment is often just the interest. Then the repayment period starts, and you pay off the balance too. That change is the part most people miss, so this page shows the jump in dollars. Real HELOC rates usually vary, too. They can move up or down over the life of the line, so treat these numbers as an estimate. The what-if box shows what a higher rate would do.
Where it's used
Why this math matters outside the classroom:
- Renovation budgets. Owners of a $450,000 home owing $250,000 find an 80% cap leaves $110,000 of credit for a remodel.
- Planning the jump. A borrower with $50,000 drawn at 8.5% budgets for $354.17 a month rising to $433.91 at repayment.
- Testing a rate rise. A household checks that a 2-point rise to 10.5% would lift its repayment payment to about $499.19 a month.
- Lender underwriting. A loan officer divides $300,000 of total debt by a $450,000 value to get a combined ratio of about 66.67%.
- Classroom finance. Students compare interest-only payments followed by repayment with a loan paid down from the first month.
Grade level and standards: Grades 11–12; Common Core State Standards for Mathematics HSA.SSE.B.4. © Copyright 2010. National Governors Association Center for Best Practices and Council of Chief State School Officers. All rights reserved.
How to use it
- Enter your home's value and everything you still owe on it.
- Enter the maximum combined loan-to-value. Then enter the amount you plan to draw.
- Enter the interest rate, the draw period and the repayment period, in years.
- Enter a rate rise to test, or leave it blank. Then read your payments, the jump between them and the total interest.
What the inputs mean
- Home value
- An estimate is fine for planning. A lender will usually want its own valuation, and your limit would be based on that.
- Mortgage balance
- Your mortgage, plus any other loan backed by the home. Use what it would take to pay each one off today.
- Maximum combined loan-to-value
- Combined loan-to-value means all the loans on your home as a share of its value. It's the cap on your total borrowing. The default of 80% is only a starting point, so ask your lender for its figure.
- Amount drawn
- The calculator assumes you take this whole amount on day one and keep it out for the full draw period. That shows the most this amount could cost you at this rate.
- Interest rate
- Enter the rate you've been quoted. Many lines tie the rate to a public benchmark rate, so it can change after you open the line.
- Draw period
- The years you can take money out. Enter 0 if your payments would pay down the balance from the start.
- Repayment period
- The years you have to pay off the balance after the draw period ends. You can't take out more money during this time.
- What if the rate rises by
- A percentage point is a straight addition to the rate. So 2 points takes 8.5% to 10.5%. The what-if uses the higher rate for the whole life of the line.
Formula and method
available credit = home value × max combined loan-to-value − mortgage balance interest-only payment = amount drawn × rate ÷ 12 i = rate ÷ 12; repayment payment = A × i ÷ (1 − (1 + i)^(−n)) payment jump = repayment payment − interest-only payment total interest = interest-only payment × draw months + repayment payment × n − A
In the formulas, A is the amount you drew, i is the monthly interest rate and n is the number of monthly payments in the repayment period.
Available credit starts from the lender's cap on all loans against your home. Then it subtracts what you already owe. If the cap is $360,000 and you owe $250,000, that leaves $110,000.
During the draw period, you pay only the month's interest, so the balance stays where it is. When repayment starts, a standard formula finds the one amount that clears the balance by the end. That payment includes interest and some of the balance, so it's higher.
The total interest is often more than you'd expect, because the balance doesn't shrink at all for the first stage. In the example, ten years of interest-only payments add $42,500 before repayment even begins.
Worked example
A home worth $450,000 has a $250,000 mortgage. The maximum combined loan-to-value is 80%. You draw $50,000 at 8.5%, with a 10-year draw period and a 20-year repayment period. You also test a rate rise of 2 points.
- Available credit: $450,000 × 80% − $250,000 = $110,000.
- Interest-only payment: $50,000 × 8.5% ÷ 12 ≈ $354.17 a month.
- Repayment payment: $50,000 × 0.00708333 ÷ (1 − 1.00708333^(−240)) ≈ $433.91 a month.
- Payment jump: $433.91 − $354.17 ≈ $79.74 a month.
- Total interest: $354.17 × 120 + $433.91 × 240 − $50,000 ≈ $96,638.79.
- What-if at 10.5%: the payments become $437.50 and about $499.19, with about $25,666.80 more interest.
Result: You'd have $110,000 of available credit. Drawing $50,000 costs about $354.17 a month at first. Then it jumps by about $79.74 to about $433.91 a month. Total interest comes to about $96,638.79 if the rate never changes.
Understanding the result
Budget for the higher payment, not the first one. If $433.91 a month would be a stretch, a line that costs $354.17 today may become a problem later.
Paying extra during the draw period helps a lot. Every dollar you pay down lowers the interest and the later payment. This calculator doesn't model it, but you can test it by entering a smaller amount drawn.
Use the what-if to set your comfort level. If a rise of 2 points would strain your budget, consider drawing less. You could also look at a fixed-rate home equity loan on the Home Equity Calculator.
Assumptions and limitations
- The rate stays the same for the whole line, unless you use the what-if. Real HELOC rates usually vary, so your actual payments will likely differ.
- You draw the full amount on day one and never pay it down during the draw period.
- The payment during the draw period is interest only. Interest is the yearly rate ÷ 12 on the balance, with payments at the end of each month.
- The what-if applies the higher rate from the very first month. That's a simple stress test, not a forecast.
- It doesn't model rate caps, rate changes partway through, partial draws or lines that switch part of the balance to a fixed rate.
- Some lines require a minimum payment that also pays down the balance. Others end with one large final payment. Read your agreement to see which applies.
- Closing costs, yearly fees and early closure fees aren't included.
- Lenders also look at your income and credit, so you may not be offered the full limit. Your home backs the line, so missed payments put it at risk.
Frequently asked questions
Why does my HELOC payment go up when repayment starts?
During the draw period, you often pay only interest, so the balance doesn't fall. When repayment starts, you pay interest and also pay off the balance, in a set number of months. With the default numbers, the payment goes from about $354.17 to about $433.91.
Are HELOC rates fixed or variable?
They usually vary. The rate is often tied to a public benchmark, plus a margin set by the lender. So your payment can rise or fall with it. Some lenders let you lock part of the balance at a fixed rate. Ask what yours allows.
What's the difference between a HELOC and a home equity loan?
A home equity loan gives you one lump sum, usually at a fixed rate, with the same payment each month. A HELOC is a line you can draw from over time, and its rate usually varies. You pay interest only on what you've actually taken out.
Do I have to use the whole line?
No. Your available credit is a ceiling, and you only pay interest on what you draw. Enter the amount you really plan to use. The result called credit left after this draw shows what stays unused.
Can I pay more than the interest during the draw period?
Often, yes, but check your agreement. Paying extra lowers your balance, so the later payment and the total interest both fall. To see the effect here, try a lower amount drawn.
How this calculator is checked
Method: Available credit by definition as value × combined loan-to-value cap − balances; interest-only payment as balance × rate ÷ 12; standard level-payment formula for the repayment period with monthly rate = yearly rate ÷ 12. The calculation is covered by automated tests with known reference values and edge cases. Last updated 2026-10-31. Found a problem? Tell us.
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