How to use this HELOC calculator
- Enter your home’s value and mortgage balance, then your lender’s maximum combined loan-to-value (CLTV). The 80% shown is only an example; every lender sets its own.
- Choose the amount you draw, or “Borrow the maximum” to use the whole credit limit. The model draws it once, on day one.
- Enter the rate as index plus margin. The index defaults to the 7.00% bank prime loan rate reported by the Federal Reserve for September 28, 2026; the 2% margin is only an example, so use the one in your offer.
- Set the draw and repayment periods, then open “Fees & extra payments” to add closing costs, an annual fee or extra principal.
How a HELOC works: the draw period and the repayment period
The CFPB describes a HELOC as an “open-end” line of credit that lets you borrow repeatedly against your home equity. During the draw period, which could last 10 years, for example, you can borrow up to your credit limit at any time, typically with special checks or a credit card. Many HELOCs have minimum monthly payments based on your current balance, and some plans allow interest-only payments, which means you pay nothing toward principal.
When the draw period ends, you can no longer borrow and the repayment period begins. The lender may set a schedule so you repay the full balance, often over ten or 20 years, and monthly payments are often significantly higher. In some cases you may have to pay back the whole amount at once. This calculator models the common case: interest-only payments during the draw, then equal payments of principal and interest.
How lenders set your HELOC credit limit
The CFPB’s booklet explains that many lenders set the limit by taking a percentage of the home’s appraised value and subtracting the balance owed on the existing mortgage. Its example is a $100,000 home, a 75% limit and $40,000 owed, for a potential line of credit of $35,000. The lender also looks at your income, debts, other obligations and credit history to set your actual limit. Because we can’t know a lender’s percentage, it is an input: change the CLTV to match your offer.
HELOC payment formulas
During the draw period, an interest-only payment on a balance B at an annual rate A is:
Interest-only payment = B × A / 12
- B
- balance drawn
- A
- annual rate = index + margin (decimal)
Once repayment starts, the balance is paid off in equal monthly payments over n months at the monthly rate r = A ÷ 12:
M = B × r / (1 − (1 + r)^−n)
- M
- monthly payment during repayment
- r
- monthly rate = A ÷ 12
- n
- months in the repayment period = years × 12
Worked example
Draw B = $50,000 at A = 9%. Interest-only payment: $50,000 × 9% ÷ 12 = $375.00 a month, for 120 months, or $45,000 of interest. Repayment over 20 years has r = 0.0075 and n = 240, so M = $449.86, an increase of 20.0% that we call payment shock. Interest during repayment is $57,967, for $102,967 in total. Payment shock at a fixed rate depends only on the rate and the length of the repayment period, not on the balance.
HELOC reference tables
Credit limit with a CLTV limit of 80%, by home value and mortgage balance:
| Home value | Owe $0 | Owe $100,000 | Owe $200,000 | Owe $300,000 | Owe $400,000 |
|---|---|---|---|---|---|
| $250,000 | $200,000 | $100,000 | $0 | $0 | $0 |
| $350,000 | $280,000 | $180,000 | $80,000 | $0 | $0 |
| $450,000 | $360,000 | $260,000 | $160,000 | $60,000 | $0 |
| $600,000 | $480,000 | $380,000 | $280,000 | $180,000 | $80,000 |
| $800,000 | $640,000 | $540,000 | $440,000 | $340,000 | $240,000 |
Draw and repayment payments on a $50,000 balance with a 20-year repayment period, by annual rate:
| Annual rate | Draw payment (interest only) | Repayment payment | Increase |
|---|---|---|---|
| 6% | $250.00 | $358.22 | +43.3% |
| 7% | $291.67 | $387.65 | +32.9% |
| 8% | $333.33 | $418.22 | +25.5% |
| 9% | $375.00 | $449.86 | +20.0% |
| 10% | $416.67 | $482.51 | +15.8% |
| 11% | $458.33 | $516.09 | +12.6% |
| 12% | $500.00 | $550.54 | +10.1% |
The same balance at 9%, by the length of the repayment period:
| Repayment period | Monthly payment | Increase over interest-only | Interest during repayment |
|---|---|---|---|
| 5 years | $1,037.92 | +176.8% | $12,275 |
| 10 years | $633.38 | +68.9% | $26,005 |
| 15 years | $507.13 | +35.2% | $41,284 |
| 20 years | $449.86 | +20.0% | $57,967 |
| 25 years | $419.60 | +11.9% | $75,879 |
| 30 years | $402.31 | +7.3% | $94,832 |
Variable rates: index, margin and rate caps
The CFPB explains that a variable rate generally has two parts: an index, a measure of interest rates that reflects trends in the economy, and a margin, an extra percentage the lender adds. Common indexes include the U.S. prime rate and the Constant Maturity Treasury (CMT) rate. Your payment may change even if you don’t draw more money, and some lenders offer a temporary, unusually low introductory rate.
On its H.15 release, the Federal Reserve reports the prime rate posted by a majority of the 25 largest U.S. banks: 7.00% for September 22 through 28, 2026. The Fed says it has no direct role in setting prime, which is determined by individual banks, though many banks base it partly on the target for the federal funds rate. The table above and the sensitivity table in the calculator show what a rise of a few points does to your payment.
There are limits. Under Regulation Z (12 CFR 1026.30), a creditor must include in any consumer credit contract secured by a dwelling the maximum interest rate that may be imposed during the term when the rate can rise. The CFPB’s shopping worksheet also asks for the interest rate cap and floor and how often the rate adjusts. Some plans limit how much your payment can rise, and some let you convert part of the balance to a fixed rate, which is usually higher than the variable rate but more predictable.
What happens when the draw period ends
Two things can change at once when repayment starts: you begin paying principal, and the rate may have moved since you opened the line. On the example balance, a 20-year repayment period lifts the payment 20.0%, but a 10-year period lifts it to $633.38. If the rate has risen 3 points by then, the payment climbs to $550.54 on the 20-year schedule.
Some plans instead call for payment in full when the draw period ends, and you must be ready to refinance, borrow elsewhere or otherwise cover that balloon payment; the CFPB warns that if you can’t, you could lose your home. Other plans let you renew the line. Ask your lender which applies before you sign, and reduce principal during the draw period if you can: the “extra principal” option in the calculator shows the effect.
HELOC vs. home equity loan vs. cash-out refinance
A HELOC lets you borrow, repay and borrow again, usually at a variable rate. A home equity loan pays out once, usually at a fixed rate, with equal payments; compare it with the home equity loan calculator. A cash-out refinance replaces your mortgage instead of adding a second loan; see the refinance calculator. Lenders will look at your debt-to-income ratio and your first mortgage payment; the interest rate calculator can find the rate on a loan you already have. Whether interest on the money you use is tax deductible depends on how you spend it; see the tax section on the home equity loan page.
Risks of borrowing against your home
- Your home is the collateral. If you fall behind or can’t repay on schedule, you could lose your home.
- The line can be frozen or reduced if your home’s value falls significantly or your financial situation worsens, so the money may not be there when you need it.
- Fees add up. Lenders can charge an appraisal fee, an application fee, points (one point is 1% of the credit limit), closing costs, annual membership or maintenance fees, and transaction fees each time you draw. The CFPB’s worksheet also lists early termination and inactivity fees. A HELOC’s APR is based on the periodic interest rate alone and does not include points or other charges, so compare fees separately.
- Selling the home generally requires you to pay off the HELOC in full right away, and renting the home out may be prohibited by your agreement.
- If the HELOC is secured by your principal dwelling, Regulation Z (12 CFR 1026.15) generally lets you cancel it until midnight of the third business day after the account is opened, or after you receive the required notice and disclosures if that is later, and the CFPB says the lender must return the fees you paid.
What this calculator does not model
It assumes you draw the full amount on day one and make no further draws, that the rate stays the same (except in the sensitivity table, which applies each higher rate to the whole plan), and that the balance is repaid in equal payments over the repayment period. Real HELOCs may have minimum-payment rules, rate caps, floors, introductory rates, conversion to a fixed rate, balloon payments and fees that differ from these assumptions. Annual fees are counted for each year of the draw period. Property taxes, insurance and your first mortgage payment are not included. Use the numbers to compare scenarios, and get your lender’s written terms before you decide.
Frequently asked questions
How does a HELOC work?
A HELOC is a line of credit secured by your home that you can borrow from repeatedly during a draw period, which the CFPB says could last 10 years. After it ends, you can no longer borrow and enter a repayment period, when the lender may require the full balance to be repaid on a schedule, often over 10 or 20 years. In the example, the payment rises from $375.00 to $449.86.
How much can I borrow with a HELOC?
Lenders generally set the credit limit as a percentage of the home’s appraised value, minus what you owe on your mortgage. In the example, $400,000 × 80% − $250,000 gives a $70,000 limit. The CFPB’s own booklet uses a 75% example. Your lender picks its percentage and also reviews your income, debts and credit history.
What happens to my HELOC payment when the draw period ends?
It usually jumps, because you start repaying principal as well as interest. The CFPB says monthly payments are often significantly higher once repayment begins. On the example balance of $50,000 at 9%, a 20-year repayment period raises the payment 20.0%, while a 10-year period raises it to $633.38. In some cases the whole balance is due at once.
Is a HELOC interest rate fixed or variable?
Usually variable, so your payment can change from month to month, according to the CFPB. The rate is an index plus a margin, such as prime plus 2 percentage points. Federal rules require a creditor to state in the contract the maximum rate that can be imposed on dwelling-secured credit whose rate can rise. Some HELOCs let you convert part of the balance to a fixed rate, which is usually higher but more predictable.
What is the prime rate right now?
The Federal Reserve’s H.15 release, dated September 29, 2026, shows a bank prime loan rate of 7.00% for each business day from September 22 through 28. H.15 reports the rate posted by a majority of the 25 largest banks. The Federal Reserve does not set it, so check the latest H.15 or your lender’s index before you rely on this figure.
What is the difference between a HELOC and a home equity loan?
A HELOC is a line of credit you can borrow from repeatedly, usually at a variable rate, so the payment varies with the balance. A home equity loan pays a lump sum, usually at a fixed rate, in equal payments, according to the CFPB. Model the second option with the home equity loan calculator.
Can a lender freeze or reduce my HELOC?
Yes. The CFPB says HELOCs generally let the lender freeze or reduce your credit line if your home’s value falls significantly or if your financial circumstances change and the lender doubts you can make payments. If that happens, talk to your lender, check your credit reports for errors, and consider shopping for another line of credit, though new application fees may apply.
Can I lose my home with a HELOC?
Yes. A HELOC uses your home as collateral, and the CFPB says that if you fall behind or cannot repay the loan on schedule, you could lose your home. Only consider a HELOC if you are confident you can keep up with the payments, including the higher ones after the draw period ends and any increase if the rate rises.