HELOC Payment & Limit Calculator
Estimate your maximum credit line and monthly interest-only payments.
Total Equity Available:
Max Allowable HELOC Line:
Est. Monthly Interest-Only Payment:
*Estimation assumes interest-only payments during the draw period. Actual rates and terms vary by lender.
How a HELOC Works
A Home Equity Line of Credit (HELOC) is a revolving credit line secured by your home. Unlike a standard home equity loan which provides a lump sum, a HELOC allows you to borrow as needed, pay it back, and borrow again—much like a credit card but with significantly lower interest rates.
The Two Phases of a HELOC
- The Draw Period: Usually lasting 5 to 10 years. During this time, you can withdraw funds. Most lenders only require interest-only payments on the amount you have actually borrowed.
- The Repayment Period: Usually lasting 10 to 20 years. You can no longer withdraw money. Your monthly payments will increase significantly because you are now paying back both the principal and the interest.
Realistic Example:
Suppose your home is worth $400,000 and your remaining mortgage is $250,000. If a lender allows an 80% LTV (Loan-to-Value):
- 80% of $400,000 = $320,000
- $320,000 – $250,000 (Mortgage) = $70,000 Max HELOC Line
- If you draw $20,000 at 8% interest, your monthly interest-only payment would be approx $133.33.
Key Factors Affecting Your HELOC Payment
1. Variable Interest Rates: Most HELOCs have variable rates tied to the Prime Rate. If the Prime Rate goes up, your monthly payment increases immediately.
2. Your Credit Score: Borrowers with scores above 740 typically receive the lowest margins (the percentage added to the Prime Rate).
3. Utilization: You only pay interest on what you use. If you have a $50,000 line but only use $5,000 for repairs, you only pay interest on that $5,000.