Calculate your Home Equity Line of Credit potential with our comprehensive HELOC calculator. Estimate credit limits, available funds, and understand the approval process.
Current market value of your property
Used for regional lending policies
Total debt against the property (mortgages, liens)
Amount you want to borrow
Affects lending terms and LTV limits
Amount to withdraw at closing
Loan-to-value ratio varies by lender and property type
Typical homeowner scenario
High-value property example
Moderate equity situation
High equity, large credit need
A Home Equity Line of Credit (HELOC) is a revolving credit line secured by your home's equity. Unlike a traditional loan, you can borrow and repay funds as needed during the draw period.
Formula: Max HELOC = (Property Value × LTV) - Outstanding Balance
| Feature | HELOC | Home Equity Loan |
|---|---|---|
| Structure | Revolving credit line | Lump sum |
| Interest Rate | Variable | Fixed |
| Access to Funds | As needed | All at once |
| Payments | Interest-only initially | Principal + interest |
Tip: Shop around - rates and terms can vary significantly between lenders.
Warning: Only borrow what you can afford to repay, even if rates increase significantly.
Learn more about HELOCs and home equity borrowing from these authoritative sources:
Important: Your home secures a HELOC. Shop around for rates and terms, and only borrow what you can afford to repay even if interest rates rise significantly.
HELOCs have a two-phase structure that catches many homeowners off guard. During the draw period (typically 10 years), you make interest-only payments on what you've borrowed. When it ends, the repayment period begins — and your payment can nearly double overnight because you're now paying both principal and interest on the full balance.
For a $150,000 HELOC at 8% variable rate:
If rates rise from 8% to 11% during the draw period, the shock compounds:
Interest-only at 8%:
Amortized at 11% (15 years):
That's a 71% payment increase — from $1,000 to $1,706 — when both the rate reset and amortization hit at the same time.
Protection strategy: During the draw period, voluntarily pay principal in addition to interest. Even $200/month extra principal on a $150K balance reduces the remaining balance (and future shock) significantly. Some lenders also offer fixed-rate conversion options that lock in a portion of your balance at a predictable rate.