How much can I borrow with a HELOC?

Most lenders allow you to borrow up to 85% of your home's appraised value minus your current mortgage balance. For example, if your home is worth $400,000 and you owe $250,000, your maximum HELOC would be ($400,000 x 0.85) - $250,000 = $90,000.

What is the difference between a HELOC and a home equity loan?

A HELOC is a revolving line of credit with variable interest rates, similar to a credit card. You draw funds as needed during the draw period (typically 10 years) and pay interest only on what you use. A home equity loan is a lump-sum loan with a fixed interest rate and fixed monthly payments from day one.

Are HELOC interest payments tax deductible?

HELOC interest may be tax deductible if the funds are used to buy, build, or substantially improve your home. Under the Tax Cuts and Jobs Act, interest on home equity debt used for other purposes (like paying off credit cards or funding a vacation) is generally not deductible. Consult a tax professional for your specific situation.

What happens when the HELOC draw period ends?

When the draw period ends (typically after 10 years), you enter the repayment period where you can no longer borrow and must pay back both principal and interest. Payments increase significantly because you are now amortizing the balance over the remaining term, usually 10-20 years.

Free HELOC Calculator — Home Equity Line of Credit

HELOC Calculator

Calculate your available home equity line of credit, monthly payments, and total interest costs.

Home Value ($)

Current Mortgage Balance ($)

HELOC Interest Rate (% p.a.)

Draw Amount ($)

Amount you plan to borrow from the credit line

Available Credit Line

Interest-Only Payment $0/mo Amortizing Payment (10yr) $0/mo Total Interest (Interest-Only, 10yr) $0 Total Interest (Amortizing, 10yr) $0

Home Equity $0 85% of Home Value $0 Draw vs Available --

Understanding Home Equity Lines of Credit (HELOC)

A Home Equity Line of Credit, or HELOC, allows homeowners to borrow against the equity they have built in their home. Unlike a traditional home equity loan that provides a lump sum, a HELOC works like a credit card with a revolving credit line. You can draw funds as needed during the draw period, typically lasting 10 years, and you only pay interest on the amount you actually use.

How Much Can You Borrow?

Most lenders allow you to borrow up to 85% of your home's appraised value, minus your outstanding mortgage balance. This is called your Combined Loan-to-Value (CLTV) ratio. For example, if your home is worth $400,000 and you owe $250,000 on your mortgage, the maximum HELOC would be $400,000 times 0.85 minus $250,000, which equals $90,000.

Interest-Only vs. Amortizing Payments

During the draw period, most HELOCs require only interest payments. This keeps monthly costs low but does not reduce your balance. Once the draw period ends, you enter the repayment phase where payments become fully amortizing, covering both principal and interest. This calculator shows both payment types so you can plan for the transition.

HELOCs typically have variable interest rates tied to the prime rate. Consider how rate changes could affect your payments, and always ensure you can handle higher payments if rates rise. Many homeowners use HELOCs for home improvements, debt consolidation, or emergency funds.

This calculator is for informational purposes only and does not constitute financial, tax, or legal advice. Always consult a qualified professional for decisions specific to your situation.

HELOC Calculator

Understanding Home Equity Lines of Credit (HELOC)

How Much Can You Borrow?

Interest-Only vs. Amortizing Payments

Frequently Asked Questions

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