HELOC Calculator 2026
Estimate your borrowing power and monthly payments for a Home Equity Line of Credit.
Property & HELOC Details
Approved HELOC Amount
$50,000
CLTV: 73.3% · Total Interest: $96,639
Draw Period Payment
$354.17/mo
Repayment Payment
$433.91/mo
Total Cost
$146,639
Equity & Payment Summary
HELOC vs Cash-Out Refinance
30-year fixed at 6.8% on $330,000 (mortgage + HELOC combined)
Disclaimer
- HELOC rates are typically variable — payments may increase.
- Interest may be tax-deductible if used for home improvement.
- Your home is collateral — missed payments risk foreclosure.
What Is a HELOC?
A Home Equity Line of Credit (HELOC) is a revolving credit line secured by your home. It works like a credit card backed by your house — you borrow as needed during a draw period (typically 10 years), then repay during the repayment period (10-20 years). Lenders typically allow you to borrow up to 80-90% of your home's value, minus your existing mortgage balance.
How HELOC Borrowing Limits Work
The formula is straightforward: take your home's current market value, multiply by the lender's maximum Combined Loan-to-Value (CLTV) ratio (usually 80-90%), then subtract your remaining mortgage balance. For a $400,000 home with $200,000 left on the mortgage and 80% CLTV, your maximum HELOC would be $120,000 ($400,000 × 0.80 − $200,000).
Draw Period vs Repayment Period
| Phase | Duration | Payments |
|---|---|---|
| Draw Period | 5–10 years | Interest-only (minimum) |
| Repayment Period | 10–20 years | Principal + Interest (amortized) |
During the draw period, you only need to pay interest on what you've borrowed. Payments jump significantly when the repayment period begins because you're now paying down principal too. Plan ahead for this payment increase.
HELOC vs Cash-Out Refinance
- HELOC — Variable rate (currently 8-9%), flexible borrowing, interest-only option, lower closing costs, keeps existing mortgage intact
- Cash-out refinance — Fixed rate available, replaces entire mortgage, higher closing costs (2-5% of loan), single predictable payment
A HELOC makes more sense when you need flexible access to funds over time. A cash-out refinance is better when you need a lump sum and can lock in a lower rate than your current mortgage.
HELOC Interest Tax Deduction
Under current tax law, HELOC interest is deductible only if the funds are used to "buy, build, or substantially improve" the home securing the loan. Using a HELOC for debt consolidation, vacations, or other purposes means the interest is not deductible. Keep records of how you spend HELOC funds.
Risks to Consider
Your home is collateral. If you can't make payments, the lender can foreclose. Variable rates mean payments can increase if rates rise. And the shift from interest-only to full amortization can cause payment shock. Only borrow what you can confidently repay.
Frequently Asked Questions
Can I get a HELOC with bad credit?
Most lenders require a credit score of 680+ for a HELOC, though some accept 620+. Lower credit scores typically mean higher interest rates and lower borrowing limits. You'll also need sufficient equity — at least 15-20% after accounting for the HELOC.
Can my lender freeze or reduce my HELOC?
Yes. If your home value drops significantly, your financial situation deteriorates, or you miss payments, the lender can freeze your line of credit, reduce your limit, or require immediate repayment. This happened widely during the 2008 housing crisis.