A HELOC calculator estimates the monthly payment and total interest to repay a home equity line of credit balance over a chosen term. A $40,000 balance at 8.5% over 10 years costs $495.94 a month.
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How to use the HELOC calculator
- Enter the balance you expect to owe.
- Enter the interest rate.
- Enter the repayment term in months.
- Read the monthly payment, total paid and interest.
How the HELOC calculator works
A home equity line of credit (HELOC) lets you borrow against your home equity, much like a credit card secured by your house. The HELOC calculator estimates the fixed monthly payment that would repay a balance over a set number of months, with the standard amortization formula:
- Payment = balance × r ÷ [1 − (1 + r)−n]
- r = annual rate ÷ 12, n = months
- Total interest = payment × n − balance
HELOC calculator worked example
A $40,000 balance at 8.5% repaid over 120 months costs $495.94 a month, and about $19,513 in interest. If your HELOC allows interest-only payments during the draw period, the minimum would be only $283.33 a month, but the balance would not go down.
| Rate | Interest-only payment | 10-year repayment | 20-year repayment |
|---|---|---|---|
| 7% | $233.33 | $464.43 | $310.12 |
| 7.5% | $250.00 | $474.81 | $322.24 |
| 8.5% | $283.33 | $495.94 | $347.13 |
| 9.5% | $316.67 | $517.59 | $372.85 |
| 10.5% | $350.00 | $539.74 | $399.35 |
Draw period and repayment period
The CFPB explains that during the draw period, which might last about 10 years, you can borrow up to your credit limit, often with special checks or a card. Many HELOCs set minimum payments based on the current balance, and some allow interest-only payments. When the draw period ends, you can no longer borrow and enter the repayment period, often 10 or 20 years, when payments are often significantly higher. Some plans require the whole balance at once, a balloon payment. The HELOC calculator models the repayment phase, so use it to see what payments could look like once principal is due.
Variable rates
HELOCs usually have a variable rate tied to an index, such as the prime rate, plus a margin, so payments can change from month to month. The CFPB’s HELOC booklet gives an example: interest-only payments on $10,000 at 10% are $83 a month, and if the rate rises to 15%, they rise to $125. Run the calculator at a higher rate to see how a rate increase would affect you. Some lenders let you lock part of the balance at a fixed rate, usually higher but more predictable.
How much can you borrow?
Lenders set the credit limit from your home’s appraised value, the amount you still owe and your income, debts and credit history. Many cap combined borrowing at a percentage of the home’s value. For example, on a $400,000 home with a $250,000 mortgage, a lender that allows 85% combined loan-to-value would allow up to $340,000 − $250,000 = $90,000.
Risks to weigh
- Your home is the collateral; if you cannot pay, you could lose it.
- Lenders can freeze or lower your line if your home’s value drops or your finances change.
- Fees can include appraisal, application, annual and early-closure fees.
- Interest is tax-deductible only in limited cases; IRS Publication 936 explains the rules, which generally require the money to be used to buy, build or substantially improve the home.
Estimates for education only, not financial advice. Your lender’s figures are final.
Planning the payoff
A simple way to plan is to run the payment at today’s rate, then again at a rate two or three points higher. If the higher payment would strain your budget, consider paying extra principal during the draw period, borrowing less, or locking part of the balance at a fixed rate. Paying even $100 more a month on a $40,000 balance at 8.5% shortens a 10-year payoff by more than two years.
Checking a quote with the HELOC calculator
Lenders often quote only the interest-only minimum. Enter the same balance and rate in the HELOC calculator with a 120- or 240-month term to see the fully amortizing payment you would face later, and compare it with your budget. Running the HELOC calculator before you draw a large amount helps you avoid a payment shock when the draw period ends.
Related converters and calculators
Related calculators:
- Home equity loan calculator: home equity loans
- Mortgage calculator: mortgages
- Refinance calculator: refinancing
- Debt-to-income calculator: DTI
Sources
CFPB: What is a home equity line of credit (HELOC)?; CFPB: What you should know about home equity lines of credit; IRS Publication 936: Home Mortgage Interest Deduction.
Formula and method
Payment = amortizing PMT(principal, rate, months). Total paid = payment*months. Total interest = total paid - principal.
Closed-end style amortizing sketch. Real HELOCs often use variable rates and interest-only draw periods; this form does not model those phases.
Questions about this calculator
What is the payment on a $40,000 HELOC at 8.5%?
About $495.94 a month over 10 years.
What is an interest-only HELOC payment?
Balance × rate ÷ 12; $40,000 at 8.5% is $283.33.
How long is a HELOC draw period?
Often about 10 years.
Are HELOC rates fixed?
Usually variable.
Is HELOC interest deductible?
Only in limited cases; see IRS Publication 936.
Check the assumptions and units before relying on a result. Financial, tax and health estimates do not replace advice for your individual circumstances.
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