A HELOC works in two phases — an interest-only draw period and an amortizing repayment period — and this calculator prices both from your home value, credit limit, draw amount, and each phase's own rate and term.
How to Use the HELOC Calculator
Home value, mortgage balance, and credit limit percentage determine how large a line you can open; draw amount and the draw-period rate cover what you'd actually borrow against it. Fill in the repayment-period rate and term separately — HELOCs run on two different rates and two different payment structures across their life, and this calculator prices both.
A home equity line of credit isn't a lump-sum loan wearing a different name. It's a revolving credit line secured by home equity, and it moves through two distinct phases that a home equity loan never has to deal with.
The Draw Period
During the draw period — commonly ten years — you can borrow against the line as needed, and the payment due each month is interest-only on whatever balance you're carrying:
Draw-Period Payment = Draw Amount × (Draw Rate ÷ 100 ÷ 12)Nothing here reduces the principal. A $30,000 draw at 9.5% costs $237.50 a month during this phase, every month, for as long as that balance sits untouched — the low payment is real, but so is the fact that the $30,000 hasn't moved.
The Repayment Period
Once the draw period ends, the line stops accepting new borrowing and whatever balance remains converts into a standard amortizing loan over the repayment term:
M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1]That's the same fixed-payment formula behind a mortgage or auto loan, applied to the draw balance, the repayment-period rate, and the repayment term. The jump from an interest-only payment to a fully amortizing one is often the single biggest payment-shock moment in a HELOC's life — borrowers who only ever made the minimum draw-period payment can see their required payment rise sharply the month the repayment period starts.
Credit line availability follows the same combined-loan-to-value logic as a home equity loan, just against your chosen limit percentage instead of a fixed 85%:
Available Credit Line = max(0, Home Value × Credit Limit % − Mortgage Balance)Draw more than that line supports and there's nothing left to actually borrow against, regardless of what the payment math says.