HELOC Calculator
Two things catch people out. Your equity is not what you can borrow. a lender caps total debt at a share of the home's value. And the cheap interest-only payment jumps sharply when the draw period ends.
Your payment jumps to
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- Interest-only payment first
- $0
- Equity you have
- $0
- Actually available to borrow
- $0
- Interest paid before you repay a penny
- $0
- Total interest over its life
- $0
Where the money goes
The green block is equity you have and it stays yours. The orange is interest-only payment first and it does not come back.
Move it and watch
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at {v} for still owed on the mortgage
And what you can change
Why your own figure may differ
The two halves of its life
The first half feels cheap because you are not paying anything off. The second half is when that catches up with you.
| Interest-only years | Repayment years |
|---|
The interest-only payment is simply the balance times the yearly rate, divided by twelve - none of it touches what you owe. The repayment figure is the normal loan payment that clears the balance over the years left.
HELOC: real examples
Three things worth knowing before signing. Click any card to load it.
- The payment jump
Borrowing $100,000 at 8%
Ten years interest-only, then twenty to repay.
You pay $667 a month, then it jumps to $836. and you will have paid $80,000 of interest with the balance untouched.
Load this scenario in the calculator → - Equity you cannot reach
$50,000 of equity, nothing available
A $400,000 home with $350,000 still owed.
Available: nothing at all. The 85% cap is $340,000, already below the mortgage. Equity on paper is not the same as equity you can borrow.
Load this scenario in the calculator → - Paying it down as you go
A shorter repayment period
The same loan repaid over ten years instead of twenty.
The payment is higher but you pay far less interest overall. Longer repayment always looks kinder monthly and costs more in the end.
Load this scenario in the calculator →
Common questions about a HELOC
What is a HELOC, in plain words?
A credit line secured against your home. You can draw on it, pay it back, and draw again, like a credit card - except the card is your house. That last part is the whole difference. Miss enough payments on a credit card and your credit suffers. Miss them here and you can lose the home.
Why can I not borrow all my equity?
Lenders cap your total borrowing at a share of what the home is worth, commonly around 85%. Your existing mortgage counts towards that cap. So if you have a lot of equity but also a large mortgage, the amount available can be far less than your equity - and sometimes nothing at all.
What is the draw period and why does it matter?
For the first several years you can borrow freely and often pay interest only. Then it flips into repayment, and the payment jumps because you now have to clear the balance too. That jump is the single most common nasty surprise with these, which is why this tool leads with it.
How big is the jump, really?
Often two or three times the interest-only payment, sometimes more. The tool shows your exact figure. If you cannot comfortably afford the repayment figure today, you cannot afford the HELOC - because that payment is coming whether or not your circumstances have changed.
Is the rate fixed?
Usually not. Most of these carry a variable rate, so your payment can rise even during the interest-only period. A fixed-rate home equity loan is the alternative if you want certainty and know the amount you need up front.
What is a sensible use for one?
Something that either adds lasting value or genuinely saves money - a repair that stops worse damage, or clearing debt at a much higher rate. What makes people uneasy, rightly, is using it for spending that leaves nothing behind, because the debt outlasts the thing you bought and your house is the security.