HELOC Calculator
Draw & repayment payments · Available credit · Rate stress test
Annual summary
| Year | Phase | Payment/mo | Interest paid | Principal paid | End balance |
|---|
Most HELOCs carry a variable rate tied to the prime rate — your payment can rise even without drawing more money. See how a rate increase would change your payments.
| Rate | Draw payment | Repayment payment |
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What Is a HELOC, and How Does It Work?
A home equity line of credit (HELOC) is a revolving credit line secured by your home, typically capped at 80%–85% of your home's value minus what you still owe on your mortgage. Unlike a home equity loan, which hands you one lump sum upfront, a HELOC works more like a credit card: you draw what you need, repay it, and can borrow again during the draw period, and you only pay interest on what you've actually used.
Every HELOC runs through two phases. First is the draw period, usually 5–10 years, when you can pull money out as needed and often only have to cover interest each month. Then comes the repayment period, typically 10–20 years, when the borrowing stops and you start paying down both principal and interest. That transition is where payments can jump sharply, so it's worth planning for the higher repayment-period number well in advance — this calculator shows both side by side.
Because most HELOCs carry a variable rate tied to the prime rate, your payment can rise even if you haven't drawn a single extra dollar. Use the Rate stress test tab above to see how a rate increase would affect both your draw-period and repayment-period payments before you commit.
Tips for using this HELOC calculator
Don't confuse "available" with "affordable"
Lenders may approve you for the full 80%–85% CLTV limit, but that's a borrowing ceiling, not a spending target. Compare the repayment-period payment against your budget, not just the low draw-period number.
Plan for the payment jump
If you choose interest-only during the draw period, your payment will rise — sometimes sharply — once the repayment period begins. Check the Schedule tab to see the exact month this happens.
Stress-test the rate, not just today's number
Most HELOCs are variable-rate. Use the Rate stress test tab to check your payment at +1%, +2%, and +3% before you draw, so a rate hike doesn't catch you off guard.
Draw only what you need
Every dollar drawn accrues interest immediately, even during the interest-only period. Adjust the draw amount slider to see how a smaller draw lowers both payments and total interest.
Frequently asked questions
What does HELOC stand for?
Home equity line of credit — a revolving credit line secured by your home that lets you borrow against your equity as needed, rather than in one lump sum.
Is a HELOC a trap?
Not inherently, but it can function like one if you borrow more than you can comfortably repay or treat the credit line as extra income rather than debt against your house. The real risk is a rising variable rate combined with the principal payments that kick in once the repayment period starts.
How is a HELOC different from a home equity loan?
A HELOC gives you a revolving line you draw from as needed, usually at a variable rate. A home equity loan gives you one lump sum upfront at a fixed rate with a predictable payment from day one.
Is HELOC interest tax deductible?
Only if you use the funds to buy, build, or substantially improve the home securing the loan, and only up to the IRS's combined mortgage debt limit. Check with a tax professional for your specific situation.
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Sources & further reading
FinToku – What Is a HELOC? How It Works & Current Rates (2026)
Current HELOC rate snapshots, borrowing-limit math, HELOC vs. home equity loan comparison, and qualification requirements.
CFPB – Understanding Your Loan Estimate
The Consumer Financial Protection Bureau explains how to read APR, fees, and monthly payment disclosures.
IRS Publication 936 – Home Mortgage Interest Deduction
Official guidance on when HELOC and home equity loan interest may be tax-deductible.
Disclaimer
This calculator is provided for general informational and educational purposes only and does not constitute financial, tax, or legal advice. It is not affiliated with, endorsed by, or a substitute for consultation with your lender or a licensed financial advisor.
All figures — including available credit, draw-period payment, repayment-period payment, and total interest — are approximations based on the numbers you enter and standard interest-only and amortization formulas. They do not account for lender-specific underwriting, introductory promotional rates, rate caps or floors, annual fees, or credit-score-based pricing that may apply to your actual HELOC.
HELOC rates are variable and can change monthly with the prime rate; the rate you enter is treated as constant for each calculation. Use the Rate stress test tab to see how an increase would affect your payments. FinToku is not a lender and does not broker, originate, or guarantee financing.
Free tool by FinToku · Results are indicative. Consult your lender for exact figures.