HELOC Calculator

A home equity line of credit, or HELOC, is a revolving credit line secured by the equity in your home — the difference between your home's value and what you still owe on your mortgage. Like a credit card, you can borrow what you need up to a set limit, repay it, and borrow again, but because it's secured by your home, the interest rate is typically much lower than unsecured credit.

HELOCs are structured in two distinct phases, and understanding the shift between them is essential. During the draw period — commonly 10 years — you can withdraw funds as needed and are usually required to pay only the interest on what you've borrowed. This keeps payments low and flexible, which is part of a HELOC's appeal for ongoing expenses like home renovations or tuition.

When the draw period ends, the repayment period begins — often 20 years. You can no longer borrow, and your payments jump to cover both principal and interest so the balance is fully paid off by the end of the term. Because you've been paying interest only up to this point, the new payment can be dramatically higher — a phenomenon known as payment shock. Borrowers who haven't planned for it can be caught off guard, which is exactly why running the numbers in advance matters.

Most HELOCs carry a variable interest rate tied to a benchmark like the prime rate, meaning your payment can rise or fall as rates change. This makes them less predictable than a fixed-rate home equity loan, and a rate increase during the repayment period compounds the payment-shock effect. Some lenders offer the option to lock portions of the balance at a fixed rate.

HELOCs can be a smart, low-cost way to access funds for value-adding projects or to consolidate higher-interest debt, but the home is collateral — defaulting risks foreclosure. Borrow conservatively, have a plan for the repayment phase, and use this calculator to see both payment levels before you commit.