Quick answer: With a $500,000 home and a $300,000 mortgage, you have $200,000 in equity and could get up to a $100,000 HELOC at the standard 80% CLTV cap. Drawing $50,000 at 8.5% costs about $354.17 a month in interest-only payments. Enter your numbers above for your line and payment.
Last reviewed: October 2026
Key facts
- Most lenders cap total borrowing at 80% of your home's value (CLTV), minus your mortgage balance.
- HELOCs have two phases: a draw period (often 10 years, interest-only payments) and a repayment period (often 20 years, principal + interest).
- The rate is variable, so your payment rises and falls with market rates.
- Interest may be tax-deductible only if you use the money to buy, build, or substantially improve the home.
A HELOC calculator estimates your home equity line of credit from your home value and mortgage balance. It shows your available equity, the maximum credit line at the standard 80% combined loan-to-value cap, and your interest-only monthly payment during the draw period, so you know what borrowing against your home really costs.
A home equity line of credit works like a credit card secured by your house: you draw what you need, pay interest only on what you use, and the unused portion sits ready. Because your home is the collateral, rates run well below credit cards, but the variable rate and the payment shock when the draw period ends catch many borrowers off guard. This free tool shows your line and your payment in one step, with no signup.
How to use the HELOC calculator
- Enter your home value, a realistic current market value, not what you paid years ago.
- Enter your mortgage balance, what you still owe on your first mortgage.
- Enter the amount you plan to draw, what you actually expect to borrow.
- Enter the interest rate (HELOCs quote variable APRs; use today's offered rate).
- Enter the draw period in years, usually 10.
- Click Calculate to see your available equity, maximum credit line, and interest-only payment.
HELOC calculator formula: equity, credit line, and payments
Your available equity is simply home value minus mortgage balance: the ownership stake you have built. Lenders rarely let you borrow all of it. The standard cap is 80% combined loan-to-value: they take 80% of the appraised value and subtract your existing mortgage, and the remainder is your maximum line. During the draw period, most HELOCs ask for interest-only payments: monthly payment = drawn balance x annual rate / 12. When the draw period ends, the repayment period begins and you pay principal plus interest over the remaining term, which is why payments can jump sharply.
Because the rate is variable, usually tied to the prime rate plus a margin, your interest-only payment moves with the market. A 2% rate rise on a $50,000 balance adds about $83 a month with no extra borrowing.
Worked examples
Example 1: $500,000 home, $300,000 mortgage, $50,000 draw at 8.5%
Available equity = 500,000 - 300,000 = $200,000. Max credit line = 0.80 x 500,000 - 300,000 = $100,000. Interest-only payment = 50,000 x 0.085 / 12 = $354.17 per month during the 10-year draw period. If the rate later rises to 10.5%, that payment becomes $437.50 with no new borrowing.
Example 2: $750,000 home, $400,000 mortgage, $80,000 draw at 7.75%
Available equity = 750,000 - 400,000 = $350,000. Max credit line = 0.80 x 750,000 - 400,000 = $200,000. Interest-only payment = 80,000 x 0.0775 / 12 = $516.67 per month. The $80,000 draw is well within the $200,000 line, leaving $120,000 available for future draws.
HELOC phases reference table
| Phase | Typical length | What you pay | Can you draw? |
|---|---|---|---|
| Draw period | 10 years | Interest only on the drawn balance | Yes, up to the credit limit |
| Repayment period | 20 years | Principal + interest, no new draws | No |
| Rate type | Whole loan life | Variable, tied to prime + margin | Applies in both phases |
| Minimum payment | Varies by lender | Often $50-$100 or interest due | Check your agreement |
Tips for using a HELOC wisely
- Borrow for value-adding uses. Home improvements that raise the home's value are the classic HELOC purpose, and the interest can be tax-deductible when the money buys, builds, or substantially improves the home securing the loan.
- Stress-test a rate rise. Add 2-3% to today's rate and check the payment still fits; variable rates have no ceiling except your lender's lifetime cap.
- Plan for the repayment phase. When draws end, principal payments begin; ask your lender for the estimated repayment-phase payment before you sign.
- Keep the CLTV cushion. Borrowing the full 80% leaves no buffer if home values dip; many advisors stay at 70-75% combined.
- Compare with a home equity loan. If you need one lump sum, a fixed-rate home equity loan removes the variable-rate risk.
Common mistakes
- Treating the line as income. It is debt secured by your home; spending it on vacations or cars puts the house at risk.
- Ignoring the payment shock. Interest-only payments feel cheap until principal kicks in during repayment.
- Assuming the interest is always deductible. Since 2018, HELOC interest is deductible only when the funds improve the home securing the loan.
- Overstating the home value. Lenders order their own appraisal; an optimistic Zestimate does not raise your line.
- Drawing the maximum "just because." You pay interest only on what you draw, so leave the rest untouched.
Frequently asked questions
How much HELOC can I get?
Most lenders allow total borrowing up to 80% of your home's appraised value, minus your current mortgage balance. On a $500,000 home with a $300,000 mortgage, that is a $100,000 maximum line. Some lenders go to 85-90% CLTV with stricter credit requirements.
What is the monthly payment on a $50,000 HELOC?
At 8.5% during the interest-only draw period, a $50,000 balance costs about $354.17 per month. Once the repayment period begins, principal payments are added and the payment rises substantially.
Is HELOC interest tax deductible?
Only if you use the borrowed money to buy, build, or substantially improve the home that secures the loan. Using a HELOC for debt consolidation, cars, or vacations does not qualify for the deduction under current tax law.
What is the difference between a HELOC and a home equity loan?
A HELOC is a revolving line with a variable rate: you draw as needed and pay interest only on what you use. A home equity loan is a lump sum with a fixed rate and fixed payments from day one. HELOCs suit ongoing projects; home equity loans suit one-time needs.
Can my HELOC rate go up?
Yes. HELOCs carry variable rates tied to an index like the prime rate plus the lender's margin. Your rate and payment adjust when the index moves, up to the lifetime cap stated in your agreement.
Related: Depreciation Calculator: Straight-Line and Declining
What is the repayment-period payment on a $50,000 HELOC?
Once the draw period ends, the balance amortizes over the repayment term. A $50,000 balance at 8.5% over 20 years (240 months) costs about $433.91 per month, compared with $354.17 interest-only during the draw period. That jump of roughly $80 a month is why the repayment phase catches borrowers by surprise.
How much does my HELOC payment rise if rates go up?
Because the rate is variable, every rate rise flows straight into the interest-only payment. On a $60,000 drawn balance, a rise from 7.5% to 9.5% lifts the monthly payment from 60,000 x 0.075 / 12 = $375.00 to 60,000 x 0.095 / 12 = $475.00, an extra $100 a month with no new borrowing.
Sources
- CFPB Ask CFPB: what a home equity line of credit (HELOC) is and how it works
- Consumer Financial Protection Bureau (CFPB): home equity tools and borrowing guidance
Key takeaways
- Bookmark this tool before you apply, so you know your line and payment in advance.
- Max line = 80% of home value minus your mortgage balance.
- $500,000 home, $300,000 mortgage, $50,000 draw at 8.5% = $354.17/month interest-only.
- The rate is variable, and payments jump when the repayment period starts.
- Interest is deductible only when the money improves the home securing the loan.
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