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Two payments, not one
Most HELOCs have a draw period (often 10 years) when you can borrow and may pay interest only, then a repayment period (often 20 years) when the balance amortizes. Interest-only on $50,000 at 8% is $50,000 × 8% ÷ 12 = $333.33. Repaying $50,000 over 20 years at 8% is $418.22, so the payment rises by $84.89 when repayment starts.
Payments by balance and rate
| Balance | Interest-only at 7% | At 8% | At 9% | 20-yr repayment at 8% |
|---|---|---|---|---|
| $25,000 | $146 | $167 | $188 | $209 |
| $50,000 | $292 | $333 | $375 | $418 |
| $75,000 | $438 | $500 | $562 | $627 |
| $100,000 | $583 | $667 | $750 | $836 |
| $150,000 | $875 | $1,000 | $1,125 | $1,255 |
How the credit line is estimated
Credit line = home value × the lender's combined loan-to-value (CLTV) limit − your mortgage balance. Many lenders cap CLTV around 80%–85%, some 90%. Example: $400,000 × 85% − $200,000 = $140,000.
Variable rate
Most HELOCs are variable, tied to the prime rate plus a margin, so the payment can change. Some lenders let you lock part of the balance at a fixed rate. The calculator holds the rate steady; try a rate 2 points higher to stress-test your budget.
Example rates are for comparison only, not offers or current quotes. Your rate depends on credit, loan-to-value and lender.
Sources and assumptions
- Interest-only payment = balance × rate ÷ 12; repayment uses the amortization formula.
- CFPB: what is a HELOC
Related
- HELOC payment on $50,000
- HELOC payment on $100,000
- Home equity loan calculator
- How much equity can I borrow?
Frequently asked questions
How is a HELOC payment calculated?
During the draw period, often balance × rate ÷ 12 (interest only). During repayment, the balance is amortized over the remaining years like a regular loan.
How much HELOC can I get?
Typically home value × 80%–85% minus your mortgage balance, subject to credit and income.
What happens when the HELOC draw period ends?
You can no longer borrow, and payments switch to principal plus interest, which is usually much higher than interest-only.
Is HELOC interest tax deductible?
Only if the money is used to buy, build or substantially improve the home that secures it, under current IRS rules, and you itemize.