Home Equity Loan & HELOC Calculator

A Home Equity Loan and a HELOC both let you borrow against the equity you've built up, but they work differently: a home equity loan hands you a lump sum that starts amortizing immediately, while a HELOC gives you a revolving credit line you draw from as needed, typically with interest-only payments during a draw period before it converts to a fully amortizing repayment period.

This calculator handles both, and starts by showing your available equity — how much a lender would likely let you borrow — before you even get to the payment estimate.

How does this calculator work?

First it estimates your available equity: your home's value times the maximum combined loan-to-value most lenders allow (commonly 80%–85%), minus what you still owe on your primary mortgage. If your requested amount is above that, you'll see a warning. Compare that against a standard Home Loan Calculator payment to see how a second lien changes your total monthly obligation.

For a Home Equity Loan, the payment is the same fixed-rate, fully-amortizing math as any other installment loan — you can see exactly how principal and interest split every year until it's paid off.

For a HELOC, the calculator assumes the full credit line is drawn at the start (a common planning assumption, since it's the highest-payment scenario a lender or borrower would want to check). During the draw period, you pay interest only and the balance doesn't move; once the draw period ends, the remaining balance amortizes over the repayment period like a normal loan, so your payment jumps up at that transition — worth planning for.

Worked example

A $450,000 home with a $220,000 mortgage balance, borrowing $50,000 as a HELOC at 8.5%, with a 10-year draw period and a 15-year repayment period.

Available equity (80% CLTV)

$140,000

Payment during the 10-year draw period

≈$354/mo, interest only

Payment once repayment begins

jumps to a fully amortizing payment on $50,000 over 15 years

Balance during the draw period

stays at $50,000 the entire time

How the numbers work

Because the draw period is interest-only, none of your payment reduces the $50,000 balance for the full 10 years — you're only covering the interest.

When repayment starts, the calculator switches to a standard amortization schedule on the still-full balance, which is why the payment increases noticeably at that transition — a detail that's easy to underestimate if you only look at the draw-period payment. If rates have moved since your first mortgage, it's also worth checking the Refinance Calculator instead of stacking a second loan on top.

The interest-only draw period keeps payments low upfront, but doesn't build any equity back — if you only plan to make interest-only payments, budget for the payment jump when repayment begins, not just the initial number. Borrowing to consolidate other debt? Run those balances through the Debt Snowball vs. Avalanche Calculator first — a payoff strategy alone sometimes gets you there without a new loan.