HELOC Calculator
Estimate your home equity line of credit. See how much you can borrow, your interest-only payments during the draw period, and what repayment looks like when the draw period ends.
Your Home & Mortgage
Remaining balance on your first mortgage
Most lenders cap at 80–85% CLTV
HELOC Details
Max borrowable at 85% CLTV: $102,500
Variable rate — typically prime rate + margin (1–2%)
Period where you can draw funds (interest-only payments)
Period to repay the balance (principal + interest)
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Good equity position — most lenders will approve
Equity Overview
Loan-to-Value Breakdown
Draw Period Payment
$583.33
interest only / month
Repayment Period
$706.97
P+I / month
Total Interest Cost
HELOC Rate Guide by Credit Score (April 2026)
740+
Excellent
7.50%–8.50%
700–739
Good
8.50%–9.75%
660–699
Fair
9.75%–11.50%
620–659
Below Average
11.50%–13.00%
Below 620
Poor
May not qualify
Rates are estimates based on current market conditions. Your actual rate depends on credit score, CLTV, and lender.
HELOC vs. Home Equity Loan
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Compare HELOC Rates→Understanding Home Equity Lines of Credit (HELOCs)
A Home Equity Line of Credit (HELOC) lets you borrow against the equity in your home — the difference between your home's market value and what you owe on your mortgage. Unlike a traditional loan, a HELOC works like a credit card: you get a credit limit and draw funds as needed during the draw period, typically 5–15 years.
How a HELOC Works: Two Phases
Draw Period (5–15 years):You can borrow up to your credit limit and only pay interest on what you've used. Many borrowers make interest-only payments during this phase, keeping monthly costs low. You can borrow, repay, and borrow again — similar to a credit card.
Repayment Period (10–20 years):When the draw period ends, you can no longer borrow. Your outstanding balance converts to a fully amortizing loan with principal and interest payments. This is when many borrowers experience "payment shock" — monthly payments can increase significantly.
How Much Can You Borrow?
Most lenders allow you to borrow up to 80–85% of your home's value, minus your existing mortgage balance. This is called the combined loan-to-value (CLTV) ratio. For example, if your home is worth $450,000 and you owe $280,000, at 85% CLTV you could access up to $102,500.
HELOC Interest Rates in April 2026
HELOCs carry variable interest rates tied to the prime rate plus a lender margin (typically 1–2%). As of April 2026, HELOC rates range from approximately 7.50% for excellent credit to 13%+ for lower credit scores. Some lenders offer introductory fixed rates for the first 6–12 months.
Best Uses for a HELOC
- Home renovations: Borrow as projects progress, only pay interest on what you've drawn
- Debt consolidation: Replace high-interest credit cards with a lower HELOC rate
- Emergency fund: Set up a HELOC as a financial safety net (you don't pay until you draw)
- Education expenses: Flexible borrowing for tuition payments over multiple semesters
- Investment properties: Fund down payments or renovations on rental properties
Risks to Consider
- Variable rate risk: If rates rise, your payments increase — potentially significantly
- Payment shock: The jump from interest-only to P+I when the draw period ends can be 50–100% higher
- Your home is collateral: Failure to repay can result in foreclosure
- Home value drops: If your home value decreases, your lender may freeze or reduce your credit line
- Temptation to overborrow: Easy access to funds can lead to taking on more debt than planned
HELOC Tax Deductions
Interest on a HELOC may be tax-deductible if the funds are used to "buy, build, or substantially improve" your home (under the Tax Cuts and Jobs Act). Interest used for other purposes — like debt consolidation or car purchases — is generally not deductible. Consult a tax professional for your specific situation.
Frequently Asked Questions
What is a HELOC and how does it work?
A Home Equity Line of Credit (HELOC) lets you borrow against your home equity up to a set credit limit. During the draw period (typically 10 years), you make interest-only payments on what you borrow. After the draw period, you repay the balance with principal and interest over the repayment period (typically 20 years).
How much equity do I need for a HELOC?
Most lenders require at least 15–20% equity in your home (80–85% combined loan-to-value ratio). For example, if your home is worth $400,000, your total mortgage debt plus HELOC should not exceed $320,000–$340,000.
What happens when the HELOC draw period ends?
When the draw period ends, you can no longer borrow from the line. Your outstanding balance converts to a repayment loan with principal and interest payments. Monthly payments typically increase significantly — sometimes by 50–100% or more.
Is HELOC interest tax deductible?
HELOC interest may be tax deductible if you use the funds to buy, build, or substantially improve the home securing the line. Interest on funds used for other purposes (debt consolidation, vacations, etc.) is generally not deductible under current tax law.
What is the difference between a HELOC and a home equity loan?
A HELOC has a variable rate and works like a credit card — you draw funds as needed. A home equity loan has a fixed rate and gives you a lump sum upfront with fixed monthly payments. HELOCs offer more flexibility; home equity loans offer predictable payments.
Can I lose my home with a HELOC?
Yes. A HELOC is secured by your home, meaning your home serves as collateral. If you fail to make payments, the lender can foreclose on your property. Always borrow responsibly and ensure you can afford payments even if interest rates rise.