HELOC Payment Calculator
Estimate your line of credit limit and monthly payments
Available HELOC Credit Limit:
Monthly Interest-Only Payment (Draw Period):
Monthly Principal + Interest (Repayment Period):
Combined Loan-to-Value (CLTV):
How a HELOC Works
A Home Equity Line of Credit (HELOC) is a revolving line of credit, much like a credit card, but secured by your home. It typically consists of two distinct phases: the Draw Period (usually 10 years) and the Repayment Period (usually 20 years).
Calculating Your HELOC Limit
Lenders use your Combined Loan-to-Value (CLTV) ratio to determine how much they are willing to lend. The formula is:
(Home Value × Max CLTV %) – Existing Mortgage Balance = Your HELOC Limit
Example Scenario
If your home is worth $500,000 and your lender allows an 80% CLTV, your total borrowing limit is $400,000. If you already owe $250,000 on your primary mortgage, your maximum HELOC line would be $150,000.
Monthly Payment Variations
- Interest-Only: During the draw period, many HELOCs allow you to pay only the interest on the amount you've actually used.
- Repayment: Once the draw period ends, you must pay both principal and interest, which significantly increases the monthly payment.
- Variable Rates: Most HELOCs have variable interest rates tied to the Prime Rate, meaning your payment can change monthly.
Is a HELOC Right for You?
HELOCs are ideal for long-term projects with uncertain costs, such as home renovations or ongoing educational expenses. However, because your home is collateral, failing to make payments puts your property at risk of foreclosure.