A HELOC calculator estimates the home equity line of credit you may qualify for. It uses the common lender rule of 80% combined loan-to-value: your maximum line is 80% of your home value minus your current mortgage balance. It also shows interest-only payments and a fully amortized payment.
How to use it
- Enter your home’s current market value and your remaining mortgage balance.
- Enter the interest rate (APR) you expect on the line.
- Set the repayment period to see the amortized monthly payment.
- Compare the interest-only payment (draw period style) with the amortized payment.
The formula
Interest-only payment = line × (APR / 12)
Amortized payment uses the standard loan amortization formula over the repayment period.
Worked example
Max line = 0.80 × 500,000 − 300,000 = $100,000
Interest-only = 100,000 × 0.085 / 12 = $708.33/mo
Amortized over 20 years = $867.82/mo
Frequently asked questions
How is the monthly payment on a home equity loan calculated?
During the draw period many HELOCs ask interest-only payments: balance times the monthly rate. In repayment, the payment amortizes like a regular loan. This tool shows both.
What is the draw period vs the repayment period?
The draw period (often 10 years) is when you can borrow and usually pay interest only. The repayment period (often 15 to 20 years) is when you can no longer draw and must pay down the balance.
What does 80% CLTV mean?
Combined loan-to-value. Lenders often cap your total borrowing (mortgage plus credit line) at 80% of the home’s value, which is the rule this calculator applies.
Is HELOC interest tax deductible?
It can be, if the funds are used to buy, build or substantially improve the home securing the loan, subject to IRS limits. Tax rules change, so confirm with a tax professional. This is general information, not tax advice.