HELOC Calculator
Free HELOC calculator: how much you can borrow against your home, the interest-only payment in the draw period and the payment when repayment starts.
What it does
A home equity line of credit (HELOC) lets you borrow against the part of your home you own. Lenders usually allow the mortgage plus the HELOC to reach 80% to 90% of the home value; the rest is your credit line. During the draw period, often 10 years, you can borrow and pay only the interest. Then the repayment period starts, often 20 years, and the payment includes principal, which can raise it a lot. HELOC rates are usually variable, tied to the prime rate.
How to use it
- Type the value of the home, what you still owe on the mortgage and the lender's maximum CLTV.
- Type how much you plan to borrow and the interest rate.
- Set the draw and repayment periods to see both payments and the total interest.
The arithmetic runs in your browser. Nothing you type is sent anywhere and nothing is stored, so you can use these with real numbers.
Frequently asked questions
What is CLTV?
The combined loan-to-value: all the loans on the home divided by its value. With a $400,000 home, a $250,000 mortgage and an 85% limit, the loans can reach $340,000, so the line is $90,000.
HELOC or home equity loan?
A home equity loan pays a lump sum at a fixed rate with a fixed payment from the start. A HELOC works like a credit card: you borrow only what you need, when you need it, usually at a variable rate. A HELOC suits expenses spread over time, such as a renovation.
Is HELOC interest tax deductible?
Only if you itemize and the money is used to buy, build or substantially improve the home that secures the loan, within the mortgage debt limit of $750,000. Interest on a HELOC used for a car or credit card debt is not deductible.
What happens if the rate changes?
Most HELOCs have a variable rate equal to the prime rate plus a margin, so the payment moves with it. Try a rate one or two points higher to see whether the payment would still fit your budget.
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