HELOC Calculator

Frequently asked questions

What is a HELOC?

A home equity line of credit (HELOC) is a revolving loan secured by your home. You borrow against your equity up to an approved limit, pay interest only on what you draw, then enter a repayment period where you pay down principal plus interest.

How is my maximum credit line calculated?

Lenders use a combined loan-to-value (CLTV) ratio, typically 80% to 90%. Max credit line = home value x max CLTV - current mortgage balance. This calculator lets you adjust the CLTV to match your lender's limit.

What are the draw period and repayment period?

The draw period (often 10 years) is when you can borrow from the line and usually make interest-only payments. The repayment period (often 10 to 20 years) is when the line closes to new draws and you repay principal plus interest on a fixed amortization schedule.

Are HELOC rates fixed or variable?

Most HELOCs have variable rates tied to the prime rate, so payments can rise or fall over time. Some lenders offer fixed-rate conversion on portions of the balance. This calculator assumes a constant rate for estimation only.

Is HELOC interest tax deductible?

In the US, HELOC interest may be deductible if funds are used to buy, build, or substantially improve the home that secures the loan, subject to IRS limits. Interest for other uses is generally not deductible. Check with a tax professional.

What are the risks of a HELOC?

Your home is collateral, so missed payments can lead to foreclosure. Variable rates mean payment shock is possible. Payments also jump when the repayment period begins because you start paying principal. Keep total debt comfortably below your income.