Calculate monthly payments during the draw and repayment periods, total interest, and APR. Also estimates how much you can borrow based on your home value, mortgage balance, and LTV.
Enter values and click "Calculate" to see results.
Estimate the maximum HELOC amount based on your home value, outstanding mortgage balance, and the LTV ratio your lender accepts.
Enter values and click "Calculate" to see results.
A Home Equity Line of Credit (HELOC) is a revolving line of credit secured by your home. Unlike a traditional loan where you receive a lump sum, a HELOC works more like a credit card: you can draw funds as needed, up to your approved credit limit, and repay them over time.
The term of a HELOC is split into two distinct phases:
Because a HELOC is secured by your home, it usually has a lower interest rate than unsecured credit like credit cards. However, most HELOCs have a variable interest rate, which means your payments can change over time based on market conditions.
Lenders typically limit a HELOC to a percentage of your home's value, minus any outstanding mortgage balance. This percentage is called the Loan-to-Value ratio (LTV). Common limits are 80% or 85%, though some lenders go as high as 90% or as low as 70%.
For example, if your home is worth $600,000, your mortgage balance is $250,000, and the lender accepts an 80% LTV:
In addition to LTV, most lenders also consider your credit history, debt-to-income ratio (DTI), employment stability, and the condition of the property. In the U.S., applicants with credit scores below 630 often don't qualify. Many lenders also impose a hard cap on HELOCs, typically $1 million.
Borrowing with a HELOC comes with two main types of costs:
Because of variable rates and differing terms, comparing HELOC offers can be tricky. The best metric is the APR (Annual Percentage Rate), which combines the interest rate with the closing costs and annual fees into a single annualized number. Our calculator computes APR when you include the optional costs.
A home equity loan is a one-time lump-sum installment loan. You receive all the money upfront and repay it over a fixed term with fixed monthly payments. This makes budgeting easier than a HELOC. See our Home Equity Loan Calculator to compare.
A cash-out refinance replaces your existing mortgage with a larger one, giving you the difference in cash. This is best when the current market rate is lower than your existing mortgage rate, or when you want a single fixed-rate loan. The interest may also be tax-deductible if used for home improvements.
Unsecured options are easier to obtain and don't risk your home, but typically carry much higher interest rates. They may be a better fit for small, short-term borrowing needs.
A HELOC is a revolving line of credit (like a credit card), while a home equity loan is a one-time lump sum with fixed payments. HELOCs are more flexible but usually have variable rates.
Most HELOCs have variable rates tied to an index like the U.S. Prime Rate. A few lenders offer fixed-rate HELOCs or fixed-rate options for portions of the balance.
In the U.S., HELOC interest may be deductible if the funds are used to buy, build, or substantially improve the home securing the loan. Other uses generally don't qualify. Consult a tax professional.
Because a HELOC is secured by your home, defaulting can lead to foreclosure. It's important to borrow responsibly and only take what you can repay.
Usually yes. Most HELOCs don't have prepayment penalties, but some do — especially "no-closing-cost" versions that recover fees if you close the account within a few years. Read the terms carefully.