HELOC calculator

Not quite, and mixing the two up is a common source of confusion. Your lender's draw period is how long you can access or borrow again against the line, a separate feature from how long your payments are interest only. This calculator only models the payment structure, since that is what determines cost, so it is labeled by what it actually controls rather than borrowed lender terminology that means something else.

A HELOC works like a credit card secured by your home, you can draw, repay, and draw again up to your credit limit for as long as the line stays open. A home equity loan instead gives you one lump sum upfront with a fixed payment from day one. HELOCs almost always have a variable rate, home equity loans are usually fixed.

During the interest only period most HELOCs only require interest on what you have drawn, so the balance itself never goes down on its own. Once repayment starts, the payment has to cover both interest and enough principal to pay the balance to zero by the end of the repayment period, which is why it jumps.

Lenders typically cap your combined mortgage plus HELOC balance at 80% to 85% of your home value, though the exact cap and your approved amount also depend on your credit and income. This calculator uses your entered cap as a planning estimate, not a lender quote.

Almost always yes, HELOCs are typically variable rate, tied to an index like the prime rate. Your actual payment can rise or fall over the life of the line as that rate moves, this calculator holds your entered rate steady for simplicity.

Yes, most HELOCs let you pay down principal at any time during that stretch with no penalty, which lowers your interest only payment right away since it is based on the outstanding balance. Paying extra during those years is one of the more effective ways to reduce what you owe before repayment even starts, and this calculator does not assume you do it, so your real total interest could end up lower than shown here.