Home Equity
Most lenders in 2026 allow a combined loan-to-value (CLTV) up to 80-85%. Some go up to 90%.
HELOC Terms
During the draw period, you typically pay interest only. During repayment, you pay both principal and interest.
HELOC Analysis
Enter home and HELOC details and click calculate.
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What This Calculator Does
This home equity line of credit (HELOC) calculator helps homeowners estimate their available credit line based on home value, existing mortgage balance, and lender LTV limits. It calculates interest-only payments during the draw period, fully amortized principal and interest payments during the repayment period, and the total interest cost over the life of the HELOC. In 2026, HELOCs remain a popular way to access home equity for renovations, debt consolidation, or investment purposes, with rates tied to the prime rate (approximately 8.5% as of early 2026).
The Formula
The maximum credit line is determined by the lender maximum combined loan-to-value (CLTV) ratio applied to your home current appraised value, minus your existing mortgage balance. During the draw period (typically 10 years), you make interest-only payments on the outstanding balance. During the repayment period (typically 10-20 years), payments convert to fully amortized principal and interest.
Step-by-Step Example
Determine available equity
Home value: $500,000. Current mortgage: $280,000. Available equity: $220,000. At 80% CLTV: ($500,000 x 80%) - $280,000 = $120,000 maximum credit line.
Calculate draw period payments
Drawing $80,000 at 8.5% interest: $80,000 x (8.5% / 12) = $567 per month interest-only during the 10-year draw period.
Calculate repayment period payments
After the draw period, the $80,000 balance amortizes over 20 years at 8.5%: approximately $694 per month in principal and interest.
Calculate total interest cost
Draw period interest: $567 x 120 months = $68,000. Repayment period interest: ($694 x 240) - $80,000 = $86,560. Total interest: $154,560.
Real-World Use Cases
Home Renovation Financing
Use a HELOC to fund kitchen or bathroom remodels, additions, or major repairs. HELOC interest may be tax-deductible when funds are used for substantial home improvements under 2026 tax rules.
Debt Consolidation
Compare the HELOC rate (8-9.5% in 2026) against credit card rates (20-28%) to determine if consolidating high-interest debt into a HELOC saves money. Be aware that you are converting unsecured debt into debt secured by your home.
Real Estate Investment
Some investors use HELOC funds as down payments for investment properties. Calculate whether the rental cash flow exceeds the HELOC interest cost before using this strategy.
Common Mistakes to Avoid
Confusing a HELOC with a home equity loan. A HELOC is a revolving line of credit with variable rates. A home equity loan is a fixed-rate, fixed-term second mortgage.
Not understanding the payment shock when the draw period ends. Monthly payments can increase significantly when you transition from interest-only to principal and interest.
Ignoring that HELOC rates are variable. In 2026, most HELOCs are tied to the prime rate. If the Fed raises rates, your HELOC payment increases.
Borrowing the maximum available. Just because you qualify for a $120,000 credit line does not mean you should draw the full amount. Only borrow what you need and can comfortably repay.
Forgetting annual fees and closing costs. Some HELOCs charge annual fees ($50-$100), early closure fees, and appraisal costs.
Frequently Asked Questions
Accuracy and Disclaimer
This calculator provides estimates for informational purposes only. Actual HELOC terms, rates, and availability depend on your credit profile, home value, existing mortgage balance, and lender requirements. HELOC rates are variable and subject to change. Consult a mortgage lender for specific terms and a tax advisor for deductibility guidance.
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