Home equity tools
Estimate how much you could borrow with a home equity line of credit — and what your monthly payments may look like during the draw period and the repayment period.
Based on the numbers you entered.
A home equity line of credit (HELOC) is a revolving line of credit secured by your home. Instead of receiving one lump sum, you are approved for a credit limit and can draw money as you need it during a set draw period — repaying and borrowing again, much like a credit card.
Because a HELOC is secured by your home, lenders typically offer lower interest rates than unsecured credit cards or personal loans. The trade-off is that your home is collateral, so failing to repay the line can put it at risk.
This calculator estimates two things:
Use it to compare scenarios, sanity-check a lender's offer, or decide whether a HELOC fits comfortably inside your monthly budget.
Tip: Results refresh automatically as you type. Press Calculate at any time to validate every field, or Reset to return to the default example.
During the draw period, most lenders require interest-only payments. On a $40,000 balance at 8.5%, that is roughly $283 per month. Because no principal is paid, the balance stays flat — and rises if you draw more.
When the draw period ends, the line converts to a repayment schedule. The same $40,000 amortized over 20 years at 8.5% costs roughly $347 per month. That is a 22% jump, and it happens whether or not your income has changed.
This is a planning estimate, not a loan offer. Lenders apply their own credit-score, income, property-type and debt-to-income requirements, and they may set a lower CLTV ceiling than the one you enter. A variable rate means your real payments can move up or down. Property values can also fall, reducing the equity a lender will recognize.
| Feature | HELOC | Home equity loan |
|---|---|---|
| How you receive funds | Revolving line you draw from | One lump sum |
| Typical rate | Variable | Fixed |
| Monthly payment | Interest-only during draw | Fixed principal + interest |
| Best for | Ongoing or uncertain costs | One-time known expense |
| Payment predictability | Lower, then higher | Same every month |
If you need a single, known amount and want a payment that never changes, a fixed-rate home equity loan is usually simpler. If you need flexibility — or want to pay interest only on what you actually use — a HELOC is often the better fit.
Most lenders let you borrow up to a combined loan-to-value ratio of 80%–90%. Subtract your first mortgage balance from that ceiling and you have a rough maximum. On a $450,000 home with a $260,000 mortgage and an 85% CLTV cap, the estimated available credit is $122,500.
The draw period is the window — often 5 to 10 years — when you can borrow from the line, repay it and borrow again. Payments during this phase are usually interest-only, which keeps them low but leaves the balance unchanged.
Once the draw period ends, the line converts to a repayment schedule that includes principal. The same balance spread over 20 years costs considerably more per month than interest-only. This calculator shows that increase explicitly.
Most HELOCs carry variable rates tied to an index such as the U.S. prime rate. Your payment can rise or fall over time. Some lenders offer fixed-rate options on portions of the balance.
Interest may be deductible if the funds are used to buy, build or substantially improve the home that secures the line. Rules and limits depend on your situation — confirm with a qualified tax professional.
