HELOC Calculator: Determine How Much You Can Borrow and Calculate Your HELOC Payment
- A HELOC calculator can help you estimate what you could borrow with a home equity line of credit, based on your current mortgage balance, estimated home value, and credit score range.
- Estimating how much you can borrow, as well as your monthly payment and the HELOC rates you're likely to qualify for, could help you decide if a home equity line of credit makes sense.
- The best HELOC or home equity loan lets you borrow the amount you need at the lowest rates, with a monthly payment that easily fits into your budget.
Table of Contents
A home equity line of credit, or HELOC, can put cash at your fingertips if you need money for emergencies, debt consolidation, or large, planned expenses. How does a HELOC work? In simple terms, it's a second mortgage that's secured by your home. You repay a HELOC in addition to your regular monthly mortgage payments.
Our HELOC calculator helps answer your important questions like, “How much can I borrow on my home with a HELOC?” and “What might my HELOC payment be?” You’ll even be able to estimate current interest rates based on your credit rating and how much you might save by improving it.
HELOC Calculator
Use our calculator to estimate your max eligible amount, interest rate, and monthly payment.
Your personalized recommendation will appear here
Next Step
Want a personalized quote? It takes less than a minute to get one from Achieve Loans, NMLS 1810501, our premier affiliate, Equal Housing Lender.
Disclosure
Recommendations provided are for estimates and educational purposes only and do not constitute an offer for a loan. Payment information displayed does not include taxes and insurance premiums Information provided such as APRs is subject to change.
How to Use a HELOC Calculator
This home equity line of credit calculator is very straightforward. You only need four pieces of information—your property address, current mortgage balance, desired loan amount, and credit score range. The calculator generates a maximum loan amount, interest rate, and monthly mortgage payment based on your answers.
Step one: Home evaluation
Input your property address so that House Canary, a third-party valuation service, can estimate your home value. If House Canary doesn’t have data on your home, or if you need to adjust the House Canary estimate, you can enter your property value.
Step two: Current mortgage balance
The next step is determining the total you currently owe against your home—your loan payoff for all outstanding mortgage balances. Mortgage balances include any financing that uses your home as collateral—your primary mortgage plus any existing HELOCs, home equity loans, and purchase money second mortgages.
Note: if you plan to refinance (pay off) a home equity loan or HELOC with a new loan, don’t include that balance in this total. You can check your most recent mortgage statement for your current balance.
Step three: Desired loan amount
How much would you like to borrow with a HELOC? For most HELOC lenders, the maximum amount you can borrow equals 80% of your home value minus your existing home loan balances. If your desired loan amount exceeds this number, you’ll get an error message and be asked to input a lower loan amount.
Step four: Credit score range
Your credit score drives the interest rate HELOC lenders are willing to offer. You may be able to get your FICO or VantageScore from your credit card companies or for free from Experian.com. Select the credit score tier that matches your score.
Your Recommendation
Scroll down, and you’ll see a recommended loan amount, estimated interest rate, and monthly payment—for both the HELOC draw period and the repayment period. The draw period is when you can access your credit line; the repayment period is when you repay what you borrowed.
Loan amount
The calculator shows your desired line of credit. It also reveals your maximum line of credit based on your estimated property value and outstanding mortgage balance. It’s important to note that while this calculator sets the maximum loan-to-value (LTV) ratio at 80%, as many HELOC lenders do, individual lenders may allow a higher amount. This is especially true if you are highly qualified. On the other hand, if your credit rating is poor or your debts are high for your income, lenders may limit you to a lower loan amount.
Monthly payment
This section estimates your monthly HELOC payment. You can select two payments in the drop-down menu—the draw period payment and the repayment period payment. Both payments are calculated assuming that you take the maximum available credit at closing and that you only pay the minimum due each month during the draw period.
Obviously, you’d save money by paying more or borrowing less.
Note that you can choose to make the minimum monthly payment for up to 10 years. This calculator assumes that the minimum payment during the draw period will only be enough to cover the interest. That’s common for HELOCs, but there are some lenders that require a full principal plus interest payment. If you only pay the interest, your loan balance will not drop, even if you make payments for years. If your lender allows interest-only payments, consider paying more.
Once you enter the repayment period of your HELOC, your minimum amount will increase so that the loan will amortize (be paid off) over its remaining term. With a 30-year HELOC, your repayment period is usually 20 years. The calculator assumes that your balance equals your desired loan amount when you enter the repayment phase.
What Is the Monthly Payment for a HELOC?
Your monthly payment for a HELOC is determined by the amount you borrow, the interest rate, and where you are on the repayment timeline. In the draw period, you might make interest-only payments. In other words, you only pay toward the interest that accumulates. During the repayment period, you make payments toward the interest and the principal amount you borrowed.
A HELOC calculator can break all of this down for you. Here are some examples of what you might pay for different HELOC amounts. For each example, we'll assume that you have good credit, which is a FICO Score between 680 and 739.
What is the monthly payment on a $10,000 HELOC?
Using a HELOC calculator to run the numbers, the monthly payment on a $10,000 home equity loan is $62 in the draw period. During the repayment period, the monthly payment increases to $80. These numbers assume a 10-year draw period, with a 20-year repayment term and a HELOC rate of 7.49% for good credit. A shorter draw period or repayment period would increase the monthly payment amounts.
What would the payment be on a $25,000 HELOC?
The monthly interest-only payment for a $25,000 HELOC is $156 during the draw period. In the repayment period, your payment increases to $201. This assumes a 10-year draw and 20-year repayment term, with a 7.49% HELOC rate for good credit.
What if you have excellent credit instead? You could qualify for the lowest HELOC rates; we'll use 5.99% for this example. Your monthly payments adjust to $125 in the draw period and $179 in the repayment period. On the other hand, if you have average credit, your payments increase to $271 and $293, respectively. The higher payment is due to a higher rate of 12.99%.
What is the monthly payment on a $30,000 home equity loan?
A $30,000 home equity loan at 7.49% would have a monthly payment of $209, assuming that you choose a 30-year loan term. If you pay off your home equity loan over 20 years instead, the payment rises to $241. A 10-year home equity loan has a monthly payment of $356. A shorter term means a higher monthly payment. However, it reduces the amount of interest you pay over the life of the loan.
Other HELOC Considerations
It’s important to understand that the calculator results are estimates only. There are other considerations when applying for a loan:
- The calculator assumes an interest rate based on average HELOC mortgage rates from a variety of lenders. That estimate is not an offer or commitment to lend, however. Mortgage rates are tied to movements in financial markets and change without notice. In addition, HELOC lenders base their offers on your entire application, not just a couple of estimates.
- The calculator assumes that your interest rate will stay the same. Traditionally, HELOCs come with variable interest rates. That means your monthly payment can change over time if your rate rises or falls.
- However, lenders have begun offering fixed-rate HELOCs that act a lot like home equity loans. If you want, you could draw your entire HELOC credit line at closing and make a fixed, fully amortizing home equity loan payment for the entire loan term—saving money and avoiding a payment increase after 10 years.
- Finally, qualifying for a HELOC depends on more than your LTV and credit score. Your strength as a borrower impacts what a specific lender is willing to lend. That can be more or less than the calculator shows.
How Hard Is it to Get a HELOC or Home Equity Loan?
When you apply for a HELOC, mortgage lenders will examine your income, debts, credit history, employment history, and property value. Lenders are required by law to verify that you can afford your mortgage payment.
Credit score
If your FICO Score is excellent, you’ll most likely be offered the best HELOC rates that a given lender offers. And if your debt-to-income ratio checks out, you might qualify to borrow against up to 90% of your home value.
If your credit score is good to excellent, and you can afford the loan, you could secure a competitive interest rate and be allowed to borrow against 80% of your property value. However, if your score is only fair to poor, lenders may reduce the amount they’re willing to lend you. And that’s assuming that your income is reliable and your debts are reasonable.
Tip: Get HELOC pre-approval to estimate what rates you might qualify for, and your monthly payments on a home equity loan.
Debt-to-income ratio
Lenders also consider your debt-to-income (DTI) ratio. This number measures how much of your gross monthly income goes to housing and debt payments. Ideally, your debt-to-income ratio won’t exceed 43%. That’s the high end for many lenders to approve a HELOC. That means your total housing and debt payments, including the new repayment period HELOC payment, can’t be more than 43% of your before-tax monthly income.
One way to reduce your debt-to-income ratio is to use at least some of your loan proceeds for debt consolidation. Debt consolidation means using your HELOC to pay off other debts—usually those with higher interest rates and larger payments.
What if you're unable to get approved for a HELOC, or you don't want to use your home as collateral for a loan? You might consider a personal loan instead. Personal loans let you borrow a lump sum, with no collateral required. Apply for a personal loan to see how much you might qualify for, with no impact to your credit scores.
Free up cash each month with Freedom Debt Relief
Ozzy S., Freedom client
“Right away, I had more money each month because of program costs so much less than what I was paying on my minimums.”
Actual client of Freedom Debt Relief. Client’s endorsement is a paid testimonial. Individual results are not typical and will vary.
Can you get a HELOC based on a higher home value if you use it for home improvement?
HELOC lenders generally make lending decisions based on the current property value. However, there are home renovation loans that do consider the improved value when setting your home improvement loan amount. Other options are rehab loans that allow you to buy or refinance a home and add financing for improvements.
Is HELOC interest tax deductible?
Home equity loan and HELOC interest are no longer tax-deductible to the extent they used to be.
The IRS states that interest on a home equity line of credit (HELOC) is only tax deductible if you use the funds for renovations to “buy, build, or substantially improve” the property. And you have to use the money for the same home that secures the loan.
In addition, you can only deduct interest on up to $750,000 of ALL your residential loans ($375,000 for a married taxpayer filing separately).
When is a HELOC a bad idea?
While HELOCs are among the cheapest sources of money, there is a reason for this – your home is collateral for the loan, and the lender gets to foreclose and take your house if you can’t afford the payments. A HELOC may become unaffordable if the interest rate increases or your payment rises sharply when you enter the repayment period.
HELOCs can also be a bad idea if you use them for short-term items like vacations or weddings. Most personal finance experts do not recommend financing a short-term purchase with a long-term loan. Do you want to be still paying off your honeymoon with a 30-year loan when your children enter college? Fortunately, there’s an easy fix – simply make higher payments and clear your balance sooner. No law says you must make the minimum payment during the draw period.
What's the difference between a HELOC vs. home equity loan?
A HELOC is a flexible line of credit that's secured by your home. You can borrow, repay, and borrow more against your credit line as often as you like during the draw period. During the repayment period, you can’t borrow more. A home equity loan is also secured by your home. But instead of a flexible credit line, you get a lump sum of money when your loan is finalized. You can take anywhere from five to 30 years to repay a home equity loan. HELOCs typically have terms lasting from 10 to 30 years.
What can you use a HELOC for?
HELOCs offer a flexible way to cover just about any expense. Common uses for HELOCs include:
Debt consolidation for high-interest credit cards and medical bills
Home improvements and repairs, major car repairs
Weddings
Financial emergencies
You could also use a HELOC to get through a temporary financial hardship if you lose your job or get sick and can't work.
Is a HELOC calculator the same as HELOC pre-approval?
A HELOC calculator lets you estimate how much you could borrow with a HELOC, based on your credit scores, home value, and mortgage balance. Some HELOC calculators can also show you estimated interest rates and monthly payments. HELOC pre-approval means that a lender gives you an initial green light. You'll still need to submit a full application, and approval isn't guaranteed.