A home equity line of credit (HELOC) lets you borrow against the equity you have built in your home — but the number people actually want to know is simple: how much can I borrow, and what will it cost me each month? This HELOC calculator answers both at once. It takes your home value, your remaining mortgage, the combined loan-to-value (CLTV) cap your lender allows, your variable rate, and the amount you have drawn, then shows your maximum credit line, your remaining available credit, and your interest-only monthly payment during the draw period.
Because HELOCs are revolving — like a giant, secured credit card — interest is charged only on the money you actually pull, not on the full approved line. Slide the drawn balance upward and watch the monthly payment move; leave it at zero and the monthly bill is zero, which is exactly how a line of credit is supposed to work.
How to Use
- Enter the Home Value — a recent appraisal or comparable-sale estimate, not what you paid five years ago. Lenders base the line on today's value, and home prices move.
- Type your Existing Mortgage Balance — the principal still owed on your first mortgage. Add any second liens or HELOan balances here, because they all sit ahead of or alongside the new line.
- Set the Max CLTV Allowed. Most banks cap HELOCs at 80% of the home value; some go to 85% or 90% for strong credit. If you do not know your lender's cap, leave the default at 80% — it is the industry benchmark.
- Enter the HELOC Interest Rate (APR). HELOCs are almost always variable, priced at Prime plus a margin. Test ±1% to see how a rate change moves your bill.
- Set the Drawn Balance — the amount you expect to pull from the line. If you are still deciding, try your planned renovation or debt-consolidation figure.
- Read the result card: the Maximum HELOC Credit Line tells you what you qualify for, the Monthly Interest-Only Payment is what you owe during the draw period, and Combined Loan-to-Value shows how close you are to your lender's cap.
Remember that during the draw period (typically 10 years) you usually pay only interest. After that, the repayment period (often 15–20 years) converts the balance into fixed amortizing payments that are substantially higher — so model the future, not just today.
How the HELOC Math Works
Two formulas drive this calculator:
Maximum credit line = Home Value × CLTV% − Existing Mortgage Balance
For example, on a $400,000 home with a $200,000 mortgage and an 80% CLTV cap: 400,000 × 0.80 = $320,000; minus $200,000 = $120,000 maximum line. If that result comes out negative, lenders simply offer $0 — your equity is already tapped out.
Monthly interest-only payment = Drawn Balance × Annual Rate ÷ 12
On a $50,000 drawn balance at 8.5%: 50,000 × 0.085 = $4,250 per year, divided by 12 = $354.17 per month. That entire payment is interest; none of it reduces what you owe, which is why HELOCs are cheap short-term but can surprise people when repayment begins.
Combined LTV = (First Mortgage + Drawn Balance) ÷ Home Value × 100
On the example above: (200,000 + 50,000) ÷ 400,000 = 62.5% CLTV. As you draw more, CLTV rises; once it hits the cap, the line freezes until you pay down or the home appreciates.
HELOC vs. Home Equity Loan: Which Fits?
A HELOC is a revolving line — you draw, repay, and draw again, paying interest only on what you use. It is ideal for uncertain-timing projects like a multi-year renovation or a safety buffer. A home equity loan is a closed second mortgage that gives you a lump sum at a fixed rate and a fixed payment from day one. Choose the HELOC if you may need the money in stages or want flexibility; choose the equity loan if you want certainty and a single predictable payment.
One caution: because HELOCs are variable, your monthly payment rises when the Fed raises rates. On a $100,000 balance, a 1% rate increase adds roughly $83 per month — and that is before the repayment period converts interest-only bills into fully amortizing ones.
Examples
Example 1 — Typical homeowner. A couple owns a home worth $400,000, owes $200,000 on their first mortgage, qualifies for an 80% CLTV HELOC at 8.5%, and plans to draw $50,000 for a kitchen remodel. Their maximum line is $120,000, remaining available credit is $70,000, and the monthly interest-only payment is $354.17. Their combined LTV sits at 62.5%, comfortably below the 80% cap.
Example 2 — Zero balance buffer. A borrower with a $300,000 home, a $150,000 mortgage, and a 75% CLTV cap opens a HELOC but does not draw anything yet. Their line is approved for $75,000, but because the drawn balance is $0, the monthly interest payment is $0.00. They pay an annual fee (often $0–$75) for the privilege, but the line sits there as a ready emergency fund.
Example 3 — Million-dollar home. On a $1,000,000 home with a $600,000 mortgage, an 85% CLTV cap, and a 7.5% HELOC rate, the borrower draws $200,000 for a second property down payment. The maximum line is $250,000, remaining credit is $50,000, and the monthly interest-only payment is $1,250.00 — $15,000 per year in interest. Their combined LTV reaches exactly 80%, right at the cap.
Example 4 — Negative equity warning. If your existing mortgage already exceeds the home value times the CLTV cap, the maximum line is $0. For instance, a $350,000 home with a $300,000 mortgage at 80% CLTV yields a theoretical line of negative $20,000, which the lender floors at zero. In that situation you must pay down the first mortgage or wait for appreciation before a HELOC makes sense.
FAQ
How much can I borrow with a HELOC?
Your maximum line equals your home value times your lender's combined loan-to-value (CLTV) cap, minus any existing mortgage balance. A typical 80% CLTV cap on a $400,000 home with a $200,000 first mortgage gives you a $120,000 line. Strong credit, low debt ratios, and jumbo programs can push the cap to 85% or 90%.
How is a HELOC monthly payment calculated?
During the draw period, you pay interest only: drawn balance × annual rate ÷ 12. On a $50,000 balance at 8.5%, that is $354.17 per month. During the repayment period (usually after 10 years), the remaining balance is amortized over 15–20 years, which makes the payment several times larger.
What is CLTV and why does it matter?
Combined loan-to-value is your total mortgage debt divided by your home value. Lenders use it to cap risk: the higher your CLTV, the more you owe relative to your home. Once your CLTV hits the allowed cap (often 80%), you cannot draw more from the line until you pay down principal or the home appreciates.
Are HELOC interest rates fixed or variable?
Nearly all HELOCs have variable rates that move with the Prime rate. When the Federal Reserve raises rates, your HELOC rate and monthly payment rise automatically. Some lenders offer rate-lock or conversion features, but they usually come with fees or a higher starting rate.
Can I pay off my HELOC early without a penalty?
Most HELOCs in the US do not charge prepayment penalties, but some charge an annual fee or an early-closure fee if you close the account within the first 2–3 years. Always read the closing disclosure; paying down principal early reduces interest immediately and frees up available credit for future draws.
What is the difference between a HELOC and a home equity loan?
A HELOC is a revolving line of credit you draw from as needed, paying interest only on the balance. A home equity loan gives you a lump sum at a fixed rate with a fixed monthly payment from day one. HELOCs are better for staged or uncertain funding; equity loans are better when you want a single predictable bill.
What credit score do I need for a HELOC?
Most lenders prefer a credit score of at least 620–680, a CLTV below 80%, and a debt-to-income ratio under 43%. Higher scores qualify for lower rates and higher CLTV caps. Some credit unions and government-backed programs offer options for borrowers with thinner credit.
Disclaimer
This HELOC calculator is provided for informational purposes only and does not constitute financial, lending, tax, or legal advice. Estimates are based on the CLTV and interest-only formulas shown above; actual credit limits, rates, fees, and repayment terms vary by lender, credit profile, geography, appraisal, and program rules. Draw-period and repayment-period schedules, annual fees, closing costs, and rate-adjustment terms are not modeled here. Always confirm your approved line, rate, and payment schedule directly with a licensed mortgage lender or loan officer before signing.