HELOC Calculator
Calculate your available home equity line of credit and estimated payments
Payment Estimates
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About HELOCs
A Home Equity Line of Credit (HELOC) is a revolving credit line that uses your home equity as collateral.
Draw Period: Typically 5-10 years (interest-only payments)
Repayment Period: 10-20 years (principal + interest payments)
LTV Limits: Most lenders allow 80-90% combined LTV
HELOC Tips
• Use for home improvements that increase value
• Consider tax deductibility (consult a tax advisor)
• Be aware of variable interest rates
• Understand the balloon payment risk
Variable Rates: HELOC rates are typically variable and can increase over time.
Payment Shock: Payments can increase significantly after the draw period ends.
Risk of Foreclosure: Your home secures the loan, so failure to repay could result in foreclosure.
Closing Costs: HELOCs often have fees similar to a mortgage (appraisal, origination, etc.).
A Home Equity Line of Credit (HELOC) Calculator is a financial tool that helps homeowners estimate the borrowing power, repayment terms, and interest costs associated with a HELOC. This calculator provides insights into how much you can borrow against your home's equity, monthly payments, and the overall cost of the loan.
How a HELOC Calculator Works
A HELOC calculator uses key inputs to determine:
Available Credit – How much you can borrow based on your home equity.
Interest-Only Payments – Minimum payments during the draw period.
Repayment Schedule – Monthly payments during the repayment period.
Total Interest Cost – The overall interest paid over the life of the HELOC.
Key Inputs Required
Home Value – Current market value of your home.
Outstanding Mortgage Balance – Remaining amount owed on your mortgage.
Loan-to-Value (LTV) Ratio – Maximum percentage of home equity a lender allows (typically 80-90%).
HELOC Interest Rate – Variable or fixed rate applied to the borrowed amount.
Draw Period – Duration during which you can withdraw funds (usually 5-10 years).
Repayment Period – Timeframe to repay the borrowed amount (often 10-20 years).
Calculations Performed by a HELOC Calculator
1. Available Credit Calculation
The calculator determines how much you can borrow based on your home equity and the lender’s LTV limit.
Formula:
Example:
Home Value = $400,000
LTV Limit = 85%
Mortgage Balance = $250,000
Available HELOC = ($400,000 × 0.85) - $250,000 = $90,000
2. Interest-Only Payments (During Draw Period)
During the draw period, you may only need to pay interest on the amount borrowed.
Formula:
Example:
Borrowed Amount = $50,000
Interest Rate = 5%
Monthly Payment = ($50,000 × 0.05) / 12 ≈ $208.33
3. Repayment Period Payments (Principal + Interest)
After the draw period ends, you must repay the principal plus interest.
Formula (Amortized Loan Payment):
Where:
= Principal borrowed
= Monthly interest rate (annual rate ÷ 12)
= Number of payments (years × 12)
Example:
Borrowed Amount = $50,000
Interest Rate = 5%
Repayment Term = 10 years
Monthly Payment ≈ $530.16
Total Interest Paid ≈ $13,619
Benefits of Using a HELOC Calculator
✅ Estimates Borrowing Power – Helps determine how much you can access.
✅ Compares Lenders – Allows comparison of interest rates and terms.
✅ Plans Repayments – Shows monthly payments during draw and repayment periods.
✅ Avoids Overborrowing – Prevents taking more debt than you can afford.
Limitations of a HELOC Calculator
⚠️ Variable Rates Change – HELOCs often have adjustable rates, making future payments uncertain.
⚠️ Assumes Stable Home Value – If home prices drop, your available equity may decrease.
⚠️ Doesn’t Include Fees – Some HELOCs have origination or annual fees.