SlickCalc

HELOC Calculator

Calculate your home equity line of credit limit, monthly payments, and total interest cost. See both draw period and repayment period payments instantly.

Loan Details

Combined loan-to-value ratio, typically 80%

Draw Period (Years)
Results

Max Credit Line

$70,000

Available Credit: $20,000

Draw Period Payment

$354.17

Interest-only / month

Repayment Payment

$433.91

Principal + Interest / month

Cost Summary

Total Interest$96,639
Total Cost$96,639

Max Credit = $400000 × 80% − $250000 = $70000

Draw Payment = $50000 × (8.5%/12) = $354.17/mo

Repayment: M = P × [r(1+r)^n] / [(1+r)^n − 1]

P = $50000, r = 0.7083%, n = 240

= $433.91/mo

How HELOC Works

A Home Equity Line of Credit (HELOC) lets you borrow against the equity in your home up to a set credit limit. Your maximum credit line is calculated as: Home Value × CLTV Limit − Existing Mortgage Balance. For example, a $400,000 home with an 80% CLTV limit and a $250,000 mortgage balance gives you a maximum credit line of $70,000. Use our home equity calculator to understand how much equity you have built up.

A HELOC has two phases. During the **draw period** (typically 10 years), you can borrow up to your credit limit and only pay interest on what you've drawn. The monthly payment equals Draw Amount × (Annual Rate / 12). This is similar to how a revolving credit card works, except it's secured by your home.

After the draw period ends, the **repayment period** begins (typically 20 years). The outstanding balance converts to a fully amortizing loan with fixed principal and interest payments — the same formula used in a mortgage calculator or loan calculator: M = P × [r(1+r)^n] / [(1+r)^n − 1]. Your payments increase significantly compared to the draw period, so budget accordingly.

HELOC interest rates are typically variable (tied to the prime rate), so your payments can change over time. Closing costs usually range from $200–$2,000 depending on the lender. Shop around for rates since even a 0.5% difference on a $100,000 HELOC saves over $1,000 per year in interest. HELOCs are best used for home improvements, debt consolidation at lower rates, or emergencies — not for everyday spending.

Frequently Asked Questions

What is CLTV and how does it affect my HELOC limit?
CLTV (Combined Loan-to-Value) is the ratio of all loans secured by your home to its appraised value. Most lenders cap HELOCs at 80–85% CLTV. For example, with an 80% CLTV limit on a $400,000 home, total borrowing cannot exceed $320,000. If your first mortgage is $260,000, your maximum HELOC is $60,000.
Why does my payment jump after the draw period?
During the draw period you only pay interest on the amount borrowed, keeping payments low. Once the repayment period starts, the full balance must be paid off in 20 years with principal and interest. On a $50,000 HELOC at 8.5%, the draw period payment is ~$354/month, but the repayment period payment rises to ~$434/month — and you can no longer draw additional funds.
Is HELOC interest tax-deductible?
Under current US tax law (post-2017 Tax Cuts and Jobs Act), HELOC interest is only tax-deductible if the funds are used to buy, build, or substantially improve the home securing the loan. Interest on HELOCs used for personal expenses (vacations, car purchases, etc.) is not deductible. Consult a tax advisor for your specific situation.
How is a HELOC different from a home equity loan?
A HELOC is a revolving line of credit with a variable rate — you draw funds as needed and only pay interest on what you borrow during the draw period. A home equity loan is a lump-sum fixed-rate loan where you receive the full amount upfront and make fixed P&I payments immediately. HELOCs offer more flexibility; home equity loans offer payment predictability.
What credit score do I need for a HELOC?
Most lenders require a minimum credit score of 620, but to get competitive rates you typically need 700+. You'll also need sufficient home equity (at least 15–20%), a debt-to-income ratio below 43%, and verifiable income. The higher your credit score and equity, the lower your interest rate will be.

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