HELOC Payment & Limit Calculator
Estimate your borrowing power and monthly interest-only payments.
How to Use the HELOC Calculator
A Home Equity Line of Credit (HELOC) is a revolving line of credit secured by your home. Unlike a traditional home equity loan, which provides a lump sum, a HELOC allows you to borrow as needed, much like a credit card.
To use this calculator, you need three primary figures: your current home value, your existing mortgage balance, and the interest rate offered by your lender. Lenders typically allow you to borrow up to 80% or 85% of your home's total value, minus what you still owe on your mortgage. This is known as the Loan-to-Value (LTV) ratio.
Understanding the Calculation
Our calculator performs two main functions:
- The Maximum Line: This is calculated using the formula:
(Home Value × LTV Limit) - Current Mortgage Balance. For example, if your home is worth $500,000 and the lender allows 80% LTV, your total borrowing limit is $400,000. If you owe $250,000 on your mortgage, your maximum HELOC line is $150,000. - Monthly Payment: Most HELOCs have a "draw period" (usually 10 years) where you are only required to pay interest. The interest-only payment is calculated by:
(Borrowed Amount × Annual Interest Rate) ÷ 12 months.
Example Scenario
Imagine your home is valued at $400,000 and you have a $200,000 mortgage balance. If a lender offers an 80% LTV limit, they will allow total debt up to $320,000. Subtracting your $200,000 mortgage leaves you with a potential HELOC limit of $120,000.
If you then decide to withdraw $30,000 for a kitchen renovation at an interest rate of 9.0%, your monthly interest-only payment would be approximately $225.00 during the draw period.
Important Considerations
Variable Rates: Most HELOCs have variable interest rates tied to the Prime Rate. This means your monthly payment can fluctuate over time. Furthermore, once the draw period ends, you enter the "repayment period," where you must pay back both the principal and interest, which can significantly increase your monthly obligation.