How much can I borrow with a HELOC?

Lenders cap your combined loan-to-value, often 85%. Your available line is the home's value times that percentage, minus your first-mortgage balance.

Why does my HELOC payment go up after the draw period?

During the draw period you usually pay interest only. Once repayment starts you must pay back principal too, over a shorter remaining term, so the monthly payment rises sharply.

Home Equity Line of Credit (HELOC) Payment Calculator

Estimate your available home equity line of credit and what you'll pay during the interest-only draw period and the repayment period.

How is a HELOC payment calculated? During the draw period a HELOC is usually interest-only — your payment is the balance times the monthly interest rate. When the repayment period starts, the balance amortizes into principal plus interest over the remaining term, so the payment jumps.

Reviewed by the HomeEquityWise Editorial Team · Last updated May 2026 · How we calculate these numbers

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HELOC lenders to compare

Reputable, widely-reviewed HELOC lenders to get quotes from. We're not paid to list these and this isn't an endorsement — compare at least three offers and confirm rates and fees directly. See our editorial standards.

Bank of America — often no application, annual, or closing fees
Figure — fast, fully digital funding (often days)
Alliant Credit Union — competitive rates and low fees
Navy Federal Credit Union — military members/families; up to 95% CLTV
Third Federal — low / no closing costs

How a home equity line of credit works

A home equity line of credit (HELOC) is a revolving credit line secured by your home. It has two phases. During the draw period (often 10 years) you can borrow as needed and most lenders only require interest-only payments. When the repayment period begins, you can no longer draw and must repay principal plus interest over the remaining term — so the payment jumps significantly.

Your available credit line is capped by your combined loan-to-value (CLTV) — often 85%. That's the home's value times the CLTV percentage, minus your first-mortgage balance.

Line of credit vs. cash-out refinance

A home equity line of credit keeps your existing first mortgage and adds a flexible line you draw from only when needed — ideal for staggered expenses. A cash-out refinance replaces your mortgage entirely and hands you a lump sum at a fixed payment.

The formula

A HELOC has three numbers worth knowing:

Available line = (home value × max CLTV) − first-mortgage balance
Draw-period payment = balance × (annual rate ÷ 12) (interest-only)
Repayment payment = balance amortized over the remaining term at your rate

Worked example

Your home is worth $450,000, you owe $250,000, and the CLTV cap is 85%. Your line is $450,000 × 0.85 = $382,500, minus $250,000 = about $132,500 available. Draw $50,000 at 8.5% and the interest-only payment is about $354/month during the draw period. Once the 20-year repayment period starts, that same $50,000 amortizes to about $434/month — the "payment shock" people get caught by.

Draw period vs. repayment period

The draw period (commonly 10 years) is when you borrow and repay flexibly, usually interest-only. The repayment period (often 20 years) locks the line and forces full principal-and-interest payments. Because interest-only payments never touch the principal, the jump when repayment begins can be steep — plan for it before you draw.

What a HELOC costs

Variable rate tied to the prime rate — your payment can rise as rates move.
Low or no closing costs at many lenders — a key advantage over a cash-out refinance.
Possible annual fee or early-closure fee — confirm before signing.

When a HELOC makes sense

A HELOC fits staggered or uncertain needs — phased renovations, tuition, or a low-cost safety net — especially when your first-mortgage rate is low and worth keeping. If you need a single lump sum at a fixed payment, a home equity loan or cash-out refinance may suit better. For the full trade-off, read is a HELOC a good idea?

How to qualify for a HELOC

HELOC approval rests on the same pillars as any home loan:

Credit score — many lenders want 660–680+, though some go lower with more equity.
Combined loan-to-value — your first mortgage plus the line must stay under the CLTV cap (often 85%, sometimes up to 90%).
Debt-to-income — typically under about 43%, counting the new line's payment.
Income and home value — verified income and an appraisal or automated valuation to set your available line.

Because rates are variable, ask each lender about the index, the margin, and any rate cap before you sign.

Frequently asked questions

How is a home equity line of credit payment calculated?

During the draw period it's usually interest-only: balance × monthly rate. In repayment, the balance amortizes into principal-and-interest over the remaining term, so the payment rises.

How much can I borrow?

Up to your CLTV cap (often 85%) of the home's value, minus your first-mortgage balance.

Why does my payment jump later?

Interest-only draw payments don't pay down principal. When repayment starts, you must repay the full balance over a shorter term, which raises the payment sharply.

Sources: CFPB — What is a HELOC? · CFPB Owning a Home · our methodology.