HELOC Payment & Limit Calculator
Estimate your borrowing power and monthly interest-only payments.
75%
80%
85%
90%
Maximum Eligible Credit Line:
$0.00
Remaining Equity After HELOC:
$0.00
Monthly Interest-Only Payment:
$0.00
Monthly Principal + Interest (Repayment):
$0.00
Warning: Your draw amount exceeds your calculated credit limit.
How to Calculate Your HELOC Payments
A Home Equity Line of Credit (HELOC) functions differently than a standard home equity loan. During the "draw period" (typically the first 10 years), most lenders only require you to pay the interest on the amount you have actually spent. This calculator helps you determine both that initial interest-only payment and the eventual full payment required during the repayment phase.
The HELOC Formula
To find your maximum credit limit, lenders use the Loan-to-Value (LTV) ratio. The formula is:
(Home Value × Max LTV%) - Current Mortgage Balance = HELOC Limit
To calculate the interest-only payment during the draw period:
(Draw Amount × Annual Interest Rate) / 12 Months = Monthly Payment
Example Calculation
Imagine your home is worth $500,000 and you owe $300,000 on your primary mortgage. If your lender allows an 80% LTV, they will lend up to $400,000 in total debt. Subtracting your $300,000 mortgage leaves you with a $100,000 HELOC limit.
If you draw $20,000 at an 8% interest rate, your monthly interest-only payment would be approximately $133.33.
Important Considerations
- Variable Rates: Most HELOCs have variable interest rates tied to the Prime Rate. Your payment will fluctuate as market rates change.
- The Repayment Phase: Once the draw period ends, you must pay back both principal and interest. This often leads to a significant "payment shock" as the monthly cost increases.
- Closing Costs: While some lenders offer "no-cost" HELOCs, others may charge for appraisals, title searches, or annual membership fees.