A walkthrough, end to end.
- 1
Enter home value, mortgage balance, lender CLTV cap (typically 80–85%), expected outstanding balance, draw-period rate, repayment-period rate, and lengths.
- 2
The calculator returns maximum credit line, monthly interest-only payment during draw, and principal+interest payment during repayment.
- 3
Use draw period for flexibility; plan for the higher repayment-period payment when draw ends.
HELOC two-phase math
Phase 1 (draw, typically 10 yr): pay interest only on outstanding balance. Monthly = balance × rate / 12. Phase 2 (repay, typically 20 yr): standard amortization on the balance at draw-period end. Total HELOC life often 30 years (10 + 20).
What you can do with this.
Home renovation HELOC
$100K HELOC limit, draw $50K initially. Interest-only payment at 8.5% rate = ~$354/mo during 10-year draw. Flexible: draw more for unexpected costs, repay before draw ends to reduce repayment-period burden.
Emergency credit line
Open HELOC with little/no balance — costs almost nothing during draw period. Available if job loss, medical, or major repair hits. Cheaper safety net than credit cards or personal loans.
Bridge financing
Buying new home before old one sells. HELOC on old home funds down payment on new. Repay HELOC when old home sells. Risk: market shift, slow sale leaving you with the HELOC.
Investment property down payment
Tap home equity to fund rental property down payment. Real estate investors use this aggressively. Risk: leveraged investment risk on top of mortgage risk on primary residence.
HELOC vs. home equity loan
HELOC: variable rate, draw-as-needed, interest-only during draw. Home equity loan: fixed rate, lump sum, principal+interest from day one. HELOC for flexibility; loan for predictability.
Variable rate risk
Most HELOCs are variable rate (Prime + margin). Rate rises = payment rises immediately. Stress-test your budget at rate +2-3% before committing.
Payment shock at draw-end
10-year draw at $300/mo (interest only on $50K @ 7%) jumps to ~$425/mo at start of 20-year repayment. Plan for this transition; many borrowers refinance before draw ends to extend interest-only.
HELOC 2026 — what's current
Variable HELOC rates 8–10% in 2026 (Prime + 0.5–2%). Annual fees $0–$75 typical. Most lenders waive closing costs for HELOCs. Compare 5+ lenders — terms vary widely.
Frequently asked.
HELOC for flexibility (unknown total cost, rolling expenses, emergency fund). Home equity loan for one-time known cost. Both secured by your home with foreclosure risk on default.
US tax law: deductible only if used for substantial home improvement (post-TCJA). Used for non-home expenses, not deductible. Documentation matters — keep records of how funds were used.
Most HELOCs convert to standard amortization for repayment period. Some require balloon payment of remaining balance. Read the fine print; balloon HELOCs can force a refinance scramble.
No. Calculations run entirely in your browser.