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Real Estate

HELOC Calculator

It works out how much a home equity line of credit could make available at your lender's CLTV limit, the interest-only draw payment, and the jump when repayment begins.

IntermediateUpdated 2026-07-28Free · no sign-up

Credit available

$125,000

$200,000 of equity, capped at 85% combined LTV

Home equity

$200,000

Available credit

$125,000

Drawn

$100,000

Interest-only payment

$666.67

Repayment payment

$836.44

CLTV after draw

80.0%

Payment jumps $169.77 at repayment

Interest-only during the draw period is $666.67 a month. Once principal must be repaid it becomes $836.44 — budget for that figure, not the first one.

Estimate only. Most HELOC rates are variable and move with a published index, so the draw payment changes as rates change. Your home secures the debt.

What it calculates

It works out how much a home equity line of credit could make available at your lender's CLTV limit, the interest-only draw payment, and the jump when repayment begins.

Why it matters

A HELOC is cheap while you are only paying interest and then changes character overnight. The payment shock at the end of the draw period catches many borrowers out.

Who it's for

Owners funding a renovation, consolidating higher-rate debt, or holding a line of credit as a standby reserve.

Formula

Available = value × CLTV limit − mortgage balance
V
Current home value
M
Outstanding first mortgage balance
CLTV
Combined loan-to-value ceiling the lender allows
D
Amount actually drawn from the line

Worked example

$500,000 home with a $300,000 mortgage at 85% CLTV

  1. 1Ceiling = 500,000 × 85% = $425,000
  2. 2Available = 425,000 − 300,000 = $125,000
  3. 3Interest-only on $100,000 drawn at 8% = $667 a month

$125,000 available; payment jumps to about $836 in repayment

How the heloc calculator works

Lenders cap total borrowing against the home at a combined loan-to-value limit, commonly 80–90%. Your available credit is that ceiling less whatever the first mortgage still owes, so equity alone is not the same as borrowing power. During the draw period, typically ten years, payments are usually interest only — cheap, but repaying nothing. When repayment begins the outstanding balance amortizes over the remaining term, and the payment rises sharply overnight. Most HELOCs also carry a variable rate, so the draw payment moves with prevailing rates.

Lenders cap total borrowing against the home at a combined loan-to-value limit, commonly 80–90%. Your available credit is that ceiling less what the first mortgage still owes, so equity alone is not the same as borrowing power.

During the draw period payments are usually interest only. When repayment begins the balance amortizes over the remaining term and the payment rises sharply overnight.

Common mistakes

  • Mistaking equity for available credit; the CLTV ceiling is what actually binds.
  • Planning around the interest-only payment and being unprepared for the repayment phase.
  • Forgetting the rate is usually variable, so payments rise when rates do.
  • Using a line secured on your home for spending that will not outlast the debt.

Tips and best practice

  • Pay some principal during the draw period even when only interest is required.
  • Model the repayment payment before you draw, not after the draw period ends.
  • Compare a HELOC against a fixed-rate home equity loan if you want payment certainty.

Frequently asked questions

How much can I borrow with a HELOC?

Usually up to 80–90% of your home value less the existing mortgage. On a $500,000 home with a $300,000 mortgage at 85%, that is about $125,000.

What is the draw period?

The first phase, typically ten years, when you can borrow and repay freely and payments are often interest only. Repayment of principal begins after it ends.

Why does my HELOC payment go up so much?

When the draw period ends the balance must amortize over the remaining term, so a payment covering only interest becomes one covering principal as well.

Is a HELOC rate fixed?

Usually not. Most are variable and track a published index, so the payment during the draw period changes as rates move.

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

A HELOC is a revolving line you draw on as needed, usually at a variable rate. A home equity loan is a single lump sum at a fixed rate with set payments.

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Methodology & trust

Formula source
Standard lender CLTV limits and HELOC draw and repayment structures
Last updated
2026-07-28
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