HELOC Calculator
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What Your Result Means
- Maximum HELOC Available: The maximum you can borrow based on your home equity. Lenders typically allow borrowing up to 85% of your home's value minus your existing mortgage.
- Monthly Payment (Draw Period): Your interest-only payment while actively drawing funds. This is typically the lower payment phase and can last 5–10 years.
- Monthly Payment (Repayment): Your payment after the draw period ends. This covers both principal and interest as you repay the borrowed amount.
- Total Interest Cost: The total interest you'll pay over both the draw and repayment periods. This estimate assumes you draw the full amount and maintain the same interest rate throughout.
How This Calculator Works
This calculator determines your maximum HELOC by multiplying your home value by 85% (the standard LTV limit) and subtracting your current mortgage balance. It then calculates your monthly payment during the draw period using interest-only payments, and your repayment-period payment using the standard amortization formula. Your total interest cost reflects the sum of all payments minus the amount borrowed.
Quick Questions
What is a HELOC?
A HELOC (Home Equity Line of Credit) is a revolving credit line that allows you to borrow against your home's equity. You can typically draw funds during an initial draw period and then enter a repayment period where you pay back the borrowed amount plus interest.
Why is there an 85% LTV limit?
Lenders typically allow you to borrow up to 85% of your home's value to protect themselves if the home's value declines. This 85% loan-to-value (LTV) ratio is a standard lending guideline, though some lenders may offer higher limits with stricter requirements or lower limits depending on your credit profile.
What's the difference between the draw and repayment period?
During the draw period, you typically make interest-only payments on whatever amount you've borrowed, giving you lower monthly costs. After the draw period ends, the repayment period begins, and you start paying down the principal plus interest until the balance is fully paid.
Can my HELOC interest rate change?
Yes, most HELOCs have variable interest rates tied to a benchmark rate, so your rate and monthly payment can fluctuate over time. Some lenders offer fixed-rate options or the ability to lock in a fixed rate for part of the balance. Always review your agreement carefully.
Is my HELOC interest tax-deductible?
HELOC interest may be tax-deductible if you use the borrowed funds to substantially improve your home. Interest on borrowing for other purposes is generally not deductible. Consult a tax professional or review IRS guidelines to understand your specific situation.
What fees should I expect with a HELOC?
HELOCs may include origination fees, annual maintenance fees, early closure fees, and transaction fees. These vary by lender, so compare offers carefully and ask about all fees before opening a HELOC.
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Method & review
Estimate only. Results reflect your inputs and standard formulas. Double-check important decisions independently.