HELOC Loan Calculator: Understanding Your Home Equity Line of Credit
A Home Equity Line of Credit (HELOC) allows you to borrow against your home's equity with flexible access to funds. Our HELOC calculator helps you understand your borrowing capacity, monthly payment obligations, and total interest costs under different scenarios.
How HELOC Calculations Work
Our calculator uses these key formulas:
- Available Credit: (Home Value × LTV Ratio) - Existing Mortgage Balance
- Monthly Interest: Draw Amount × Annual Rate ÷ 12
- Interest-Only Payment: Monthly Interest
- Principal + Interest Payment: Monthly Interest + (Draw Amount ÷ Repayment Period)
Key Features
Basic Calculations
- • Available credit line calculation
- • Monthly payment estimation
- • Total interest cost projection
- • Interest-only vs. principal+interest comparison
Simulation Features
- • Interest rate change impact
- • Early payoff scenarios
- • Extra payment benefits
- • Lump sum payment effects
Understanding HELOC vs. Home Equity Loan
HELOC: A revolving line of credit where you can borrow, repay, and borrow again up to your credit limit. Typically has a variable interest rate and flexible payment options during the draw period.
Home Equity Loan: A fixed-term loan with a lump sum disbursement and fixed monthly payments over a set period, similar to a traditional mortgage.
Important Considerations
✅ Benefits
- • Flexible access to funds
- • Interest-only payments during draw period
- • Potential tax benefits (consult tax advisor)
- • Lower rates than credit cards
⚠️ Risks
- • Variable interest rates
- • Your home is collateral
- • Potential for payment shock
- • Risk of foreclosure if default
Use this calculator to make informed decisions about your HELOC borrowing strategy. Always consult with a qualified financial advisor before making major financial decisions.