How much can I borrow with a HELOC?
Multiply your home's value by a combined loan-to-value (CLTV) limit, then subtract what you owe. With a $500,000 home, $250,000 owed, and a limit of 85%, that leaves $175,000. The Consumer Financial Protection Bureau (CFPB) describes the amount as generally a percentage of the appraised value, minus what you owe on your mortgage.
Credit line = (home value × CLTV limit) − mortgage balanceThe limit is the input to question. Limits vary by lender, and we don't publish a "typical" one, so the calculator treats it as your own assumption. Ask each lender for its limit, and note that the value it uses comes from its appraisal, not your estimate.
| Home value | 75% limit | 80% limit | 85% limit | 90% limit |
|---|---|---|---|---|
| $300,000 | $0 | $0 | $5,000 | $20,000 |
| $400,000 | $50,000 | $70,000 | $90,000 | $110,000 |
| $500,000 | $125,000 | $150,000 | $175,000 | $200,000 |
| $600,000 | $200,000 | $230,000 | $260,000 | $290,000 |
| $800,000 | $350,000 | $390,000 | $430,000 | $470,000 |
How is a HELOC payment calculated?
During an interest-only draw period, the payment is your balance times the rate, divided by 12. On $60,000 at 8.5%, that's $425 a month, and your balance doesn't move. Not every plan works this way. The CFPB says some set a minimum payment that includes a portion of principal, while others allow interest only.
Once repayment starts, a level payment clears the balance over the months left. M is the payment, B the balance, r the monthly rate, and n the number of payments.
M = B × r(1 + r)^n ÷ ((1 + r)^n − 1)Here, r is 0.007083 and n is 240, which gives $521. The table shows both payments at other balances, with a 20-year repayment period.
| Balance | At 7% | At 8% | At 9% | At 10% |
|---|---|---|---|---|
| $25,000 | $146 then $194 | $167 then $209 | $188 then $225 | $208 then $241 |
| $50,000 | $292 then $388 | $333 then $418 | $375 then $450 | $417 then $483 |
| $75,000 | $438 then $581 | $500 then $627 | $563 then $675 | $625 then $724 |
| $100,000 | $583 then $775 | $667 then $836 | $750 then $900 | $833 then $965 |
| $150,000 | $875 then $1,163 | $1,000 then $1,255 | $1,125 then $1,350 | $1,250 then $1,448 |
| $200,000 | $1,167 then $1,551 | $1,333 then $1,673 | $1,500 then $1,799 | $1,667 then $1,930 |
Why does the payment jump when the draw period ends?
Because you start repaying principal. In the example, the payment rises from $425 to $521, up $96 or 23%, with no change in the rate at all. After 10 yrs of payments totaling $51,000, you'd still owe the full $60,000. The CFPB warns that monthly payments are often much higher in this stage.
A shorter repayment period makes the jump bigger. The CFPB says repayment often runs 10 or 15 years, though plans differ, so check yours.
| Repayment period | Payment | Increase | Total interest, 10-year draw included |
|---|---|---|---|
| 10 years | $744 | $319 | $80,270 |
| 15 years | $591 | $166 | $97,352 |
| 20 years | $521 | $96 | $115,968 |
Worse still, some plans skip repayment and ask for everything at once. With a balloon, the $60,000 balance falls due when the draw period ends. The CFPB says you could lose your home if you can't pay it, so read that line of your agreement before you sign.
What happens to a HELOC payment if rates rise?
It rises even if you never draw another dollar. The CFPB's own example: on $10,000 of interest-only debt, the payment is $83 at 10% and $125 at 15%. Each point on $60,000 adds $50 a month to the interest-only payment.
| Rate | Draw payment | Repayment payment | Total interest |
|---|---|---|---|
| 8.5% | $425 | $521 | $115,968 |
| 9.5% (up 1) | $475 | $559 | $131,226 |
| 10.5% (up 2) | $525 | $599 | $146,766 |
| 11.5% (up 3) | $575 | $640 | $162,565 |
A variable rate has two parts, an index and a margin. The CFPB says a variable-rate plan secured by a home must, by law, have a ceiling on how far the rate can rise, so your agreement will state one. Enter it in the advanced options. Some plans let you convert a balance to a fixed rate, which the CFPB says is usually higher but more predictable. To compare a fixed loan on the same numbers, use the home equity loan calculator.
How long does it take to pay off a HELOC with extra payments?
Paying only the required amounts takes the whole 30 yrs in this example. An extra $200 a month cuts it to 18 yrs 2 mos and saves $61,103 in interest. To clear the balance by the end of the draw period, you'd pay about $744 a month in total at this rate.
| Extra a month | Paid off in | Total interest | Interest saved |
|---|---|---|---|
| $0 | 30 yrs | $115,968 | $0 |
| $100 | 22 yrs 9 mos | $76,508 | $39,460 |
| $200 | 18 yrs 2 mos | $54,864 | $61,103 |
| $500 | 10 yrs | $25,713 | $90,255 |
| $1,000 | 5 yrs | $12,963 | $103,005 |
The CFPB's older booklet notes that some lenders charge fees or penalties if you pay more, so check first. The calculator's schedule shows every payment, and you can download it as a CSV.
When a HELOC estimate can mislead you
- Undrawn money isn't guaranteed. The CFPB says HELOCs generally let the lender freeze or reduce your line if your home's value falls or your finances worsen. Don't treat an open line as an emergency fund you can always reach.
- Your home is at risk. A HELOC is secured by your home. If you can't repay, you could lose it. That changes the math on moving card debt onto it, even at a lower rate. Our debt payoff calculator can show another route.
- Selling ends it. The CFPB says you generally have to pay off a HELOC in full when you sell. Don't assume you'd keep the line after a move.
- Fees add up. Appraisal, application, and closing costs may apply, and some plans charge annual, transaction, or inactivity fees. You can enter annual and upfront costs in the advanced options.
- Taxes are separate. IRS Publication 936 says interest on a loan secured by your home isn't deductible if the money wasn't used to buy, build, or substantially improve the home. This tool doesn't estimate a tax benefit.
Lenders must give you a list of HUD-approved housing counselors, and you can also find one yourself. They offer free or low-cost help, and it's worth a call before you borrow against your home.
Common questions
What is a good rate for a HELOC?
We don't publish rate averages, because they go stale and your rate depends on your credit and your lender. Get written offers and compare the index, the margin, any introductory rate, and the ceiling. The CFPB's booklet has a worksheet for comparing three offers.
Can I use a HELOC to pay off my mortgage?
You could, but you'd usually trade a set schedule for a variable rate and a balance that may be interest only for years. Try the numbers here, and compare them with sending extra payments through our mortgage payoff calculator.
What is the difference between a HELOC and a home equity loan?
The CFPB says a home equity loan pays out a lump sum, while a HELOC lets you borrow repeatedly up to a limit. A HELOC usually has an adjustable rate, and paying it down frees up credit again.
Does the calculator need my personal information?
No. It runs in your browser with the numbers you type. It isn't an application, and it doesn't check your credit.
Does drawing in stages change the cost?
Yes. You pay interest only on what you've drawn. Set "Draw evenly over" in the advanced options to spread the draws across several years, and the schedule will show the lower early payments.
Sources
- What you should know about home equity lines of credit · Consumer Financial Protection Bureau
- What you should know about home equity lines of credit (2014 booklet) · Consumer Financial Protection Bureau
- What is a home equity line of credit (HELOC)? · Consumer Financial Protection Bureau
- What is the difference between a home equity loan and a HELOC? · Consumer Financial Protection Bureau
- Publication 936: Home Mortgage Interest Deduction · Internal Revenue Service