HELOC Results
Interest-Only Payment
$0/month
Principal + Interest Payment
$0/month
Credit Line Warning
Credit line exceeds available equity
Payment Analysis
| Payment Phase |
Duration |
Monthly Payment |
Total Interest |
Understanding Home Equity Lines of Credit (HELOC)
What is a HELOC?
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, repay, and borrow again up to your credit limit during the draw period, making it flexible for ongoing expenses like home improvements or debt consolidation.
HELOC Payment Phases
- Draw Period: Interest-only payments (typically 10 years)
- Repayment Period: Principal + interest payments (10-20 years)
- Variable interest rates that can change monthly
- Credit line availability during draw period
- Payment shock when repayment period begins
HELOC vs Home Equity Loan
- HELOC: Revolving credit line with variable rates
- Home Equity Loan: Fixed lump sum with fixed rate
- HELOC: Interest-only option during draw period
- Home Equity Loan: Fixed monthly payments
- HELOC: More flexible but higher rate risk
Qualification Requirements
- Significant home equity (typically 15-20%)
- Good to excellent credit score (680+)
- Stable income and employment history
- Low debt-to-income ratio (typically under 43%)
- Property appraisal and title verification
Common Uses for HELOC
- Home improvements and renovations
- Debt consolidation at lower rates
- Education expenses and tuition
- Emergency fund or financial backup
- Investment property down payments
HELOC Risks to Consider
- Variable rates can increase significantly
- Payment shock during repayment period
- Home serves as collateral (foreclosure risk)
- Temptation to overspend with easy access
- Closing costs and annual fees
How Our HELOC Calculator Works
Our HELOC calculator uses your home value, existing mortgage balance, and desired credit line to determine your available equity and monthly payments. It calculates both interest-only payments during the draw period and principal-plus-interest payments during the repayment period.
The calculator considers loan-to-value ratios, variable interest rates, and payment phase transitions to provide accurate cost projections. Use these estimates to compare HELOC options and plan your borrowing strategy effectively.
80%
Typical Maximum LTV Ratio
10
Years Typical Draw Period
7-9%
Current HELOC Rate Range
$10K+
Typical Minimum Credit Line