HELOC Calculator
The national average HELOC interest rate is 7.17% as of March 2026, according to Bankrate’s latest lender survey. That single number tells you very little about what you’ll actually pay each month. A home equity line of credit has two distinct payment phases, and the gap between them catches borrowers off guard every year. This HELOC calculator shows both numbers side by side: your interest-only payment during the draw period and your principal-plus-interest payment once repayment begins.
Most online tools only show one figure. You plug in a balance, get a monthly number, and assume that’s the whole picture. It isn’t. On a $50,000 HELOC at 8.50%, your draw period payment is roughly $354 per month. When repayment kicks in, that jumps to about $434 per month: a 23% increase. The calculator on this page displays that payment shock automatically so you can plan for it before you sign.
This tool is part of our financial calculators collection, which covers everything from mortgage amortization to compound interest.
Quick version: A HELOC calculator estimates your monthly payments across both phases of the loan. Enter your Home Value, Current Mortgage Balance, HELOC Amount, Interest Rate (APR), Draw Period, and Repayment Period. The tool outputs your interest-only draw payment, your principal-plus-interest repayment figure, the Payment Shock between them, your combined loan-to-value ratio (CLTV), total interest cost, and the Payoff Date when your balance hits zero. The national average HELOC rate is 7.17% as of March 2026. Results are estimates; actual terms depend on your lender, credit profile, and whether rates move.
This calculator provides estimates for educational purposes. It is not financial advice. Consult a mortgage professional for specific HELOC terms and qualification requirements.
By Jordan Wells, Financial Research Editor
HELOC Calculator
Calculate your HELOC payments for both the draw period and repayment period. See your payment shock, total interest, and full amortization schedule.
How to use this HELOC calculator
A HELOC calculator takes six inputs and returns the two payment figures that define your borrowing cost. Start by entering your Home Value (the current market value of your property; $500,000 is the default). Next, enter your Current Mortgage Balance, which is the remaining principal on your first mortgage. The HELOC Amount field is how much you want to borrow against your equity. Set your Interest Rate (APR) using the slider or type a specific figure (8.50% is the calculator default; adjust the slider to your rate or the current 7.17% national average). Then choose your Draw Period (typically 5 to 10 years, defaulting to 10) and Repayment Period (typically 10 to 20 years, defaulting to 20).
The results appear instantly. Your Draw Period Payment is interest-only: $354 per month on a $50,000 HELOC at 8.50%. Your Repayment Period payment covers both principal and interest using standard amortization (fixed monthly payments that cover both principal and interest, with the interest share shrinking each month); that same $50,000 becomes $434 per month over 20 years. The Payment Shock badge highlights the difference: +$80 per month, or roughly 23%.
Below the main results, the calculator displays your CLTV. This ratio tells you whether a lender would likely approve the line. Most require a CLTV at or below 85%. On a $500,000 home with a $300,000 mortgage and a $50,000 HELOC, your CLTV is 70%: well within range. If the number crosses 85%, the tool flags it in red.
Here’s a quick reference for common HELOC amounts at 8.50%:
| HELOC Amount | Draw Period Payment (Interest Only) | Repayment Payment (P+I, 20 yr) | Payment Shock |
|---|---|---|---|
| $25,000 | ~$177/mo | ~$217/mo | +$40/mo |
| $50,000 | ~$354/mo | ~$434/mo | +$80/mo |
| $75,000 | ~$531/mo | ~$651/mo | +$120/mo |
| $100,000 | ~$708/mo | ~$868/mo | +$160/mo |
The Max Borrowable figure (Home Value x 85% minus mortgage balance) tells you the ceiling before you even pick a number. For the default scenario, that ceiling is $125,000.
Enter your numbers in the calculator above to see your specific payment breakdown.
If you’re calculating payments on a full home purchase instead, the mortgage calculator handles principal, interest, taxes, and insurance in a single view.
How HELOCs work
A home equity line of credit is a revolving credit line secured by your home, structured in two phases that function very differently from each other. During the draw period you can borrow up to your approved credit limit and withdraw funds as needed; most lenders require only interest-only payments during this phase. You can repay principal and re-borrow during the draw period, and the line works similarly to a credit card backed by your property. Common uses include home improvements, debt consolidation, and education expenses.
Draw period vs repayment period
Once the draw period ends (typically after 5 to 10 years), the HELOC enters the repayment period (typically 10 to 20 years). You can no longer withdraw funds. Monthly payments now include both principal and interest, calculated using standard amortization. This is where most people get confused: the payment structure changes fundamentally, and many borrowers don’t realize the increase is coming until it arrives.
How lenders set your credit limit
Lenders determine your credit limit using the CLTV ratio. The formula is straightforward: add your existing mortgage balance to the requested HELOC amount, then divide by your home’s appraised value. Most lenders cap CLTV at 80% to 85%. A home appraised at $500,000 with a $300,000 mortgage balance gives you a maximum HELOC of $100,000 to $125,000, depending on the lender’s threshold. Credit score matters too; the Consumer Financial Protection Bureau notes that most lenders require a minimum score between 620 and 680, though lower scores may qualify with higher rates.
Because the HELOC is secured by your home, defaulting on payments puts your property at risk. The rate is almost always variable, tied to the prime rate plus a lender-set margin that stays fixed for the life of the line.
For borrowers looking to consolidate multiple debts through a HELOC, the debt payoff calculator can help compare total interest costs between your current debts and a single HELOC payoff strategy.
HELOC rates in 2026
The average HELOC rate is 7.17% as of March 18, 2026, with individual rates ranging from 4.74% to 11.74% depending on credit profile, lender, and loan-to-value ratio. The prime rate sits at 6.75% after the Federal Reserve held its benchmark rate steady at its most recent meeting. The best available rates from top lenders start around 6.05% to 6.24% for borrowers with strong credit and low CLTV ratios. These figures come from Bankrate’s national survey of large home equity lenders.
HELOC rates move in lockstep with the prime rate. The connection is direct: your HELOC rate equals the prime rate plus a margin your lender sets at origination (that margin stays fixed). When the Federal Reserve cuts its benchmark rate by 25 basis points, the prime rate drops 25 basis points, and your HELOC payment decreases by the same proportion. The reverse is also true. The Fed held rates steady in its March 2026 meeting, but projected rate cuts later in 2026 could push HELOC rates lower.
For context, the average home equity loan (fixed rate, lump sum) carries a 7.85% rate as of the same date. That’s 0.68 percentage points higher than the average HELOC. The tradeoff: the home equity loan rate won’t change after closing.
Every HELOC carries a lifetime rate cap. Even if the prime rate spikes, your rate cannot exceed that cap. Read the fine print before closing; the cap varies by lender and is usually disclosed in the initial agreement.
Understanding how rates affect the total cost of borrowing is closely related to how compound interest works on debt. The compound interest calculator can show you how different rate scenarios change your total interest paid over time.
HELOC vs home equity loan
These are both second mortgages secured by your home, but they work differently in almost every way that affects your monthly budget. Choosing the wrong one costs you money or flexibility you didn’t need to give up. A HELOC is a revolving line with variable rates and two payment phases; a home equity loan is a lump sum with a fixed rate and consistent payments from day one. The right choice depends on whether you need funds over time or all at once, and how much rate risk you can absorb. Here is the breakdown:
| Feature | HELOC | Home Equity Loan |
|---|---|---|
| Interest rate | Variable (tied to prime rate) | Fixed at closing |
| How funds arrive | Revolving: withdraw as needed during draw period | Lump sum: full amount at closing |
| Interest charged on | Only the amount you’ve drawn | Entire loan balance from day one |
| Payment structure | Interest-only during draw period; P+I during repayment | Fixed P+I payments from the start |
| Typical terms | 10-year draw + 20-year repayment | 5 to 30 years |
| Closing costs | Often lower; some lenders waive them | Typically 2-5% of loan amount |
| Rate direction risk | Exposed if rates rise; benefits if rates fall | Protected: rate locked at closing |
| Best for | Ongoing expenses (renovations, tuition) where you draw over time | One-time expenses where you know the exact amount |
A HELOC makes more financial sense when you need funds over an unpredictable period. Home renovations are the classic example: you draw $15,000 for the kitchen, then $8,000 for the bathroom three months later, paying interest only on what you’ve used. A home equity loan makes more sense when you need a fixed amount immediately (paying off $40,000 in credit card debt, for instance) and want the certainty of a payment that never changes.
A third option, a cash-out refinance, replaces your entire primary mortgage with a larger loan and hands you the difference in cash. It makes sense when current mortgage rates are lower than your existing rate, but it resets your mortgage clock entirely.
The average HELOC rate is currently lower than the average home equity loan rate (7.17% vs 7.85%), but that gap can close or reverse if the Federal Reserve raises rates. The numbers tell the story: certainty has a price, and flexibility has a risk.
For borrowers comparing general loan terms beyond home equity products, the loan calculator handles personal, auto, and student loan scenarios with full amortization schedules.
FAQ
How much can I borrow with a HELOC?
Most lenders cap your combined loan-to-value (CLTV) at 80% to 85% of your home’s appraised value. The formula: Home Value x 85% minus your Current Mortgage Balance equals your Max Borrowable amount. On a $500,000 home with a $300,000 mortgage, that’s $125,000. Some lenders impose absolute caps around $500,000 to $1,000,000 regardless of your equity. Your credit score and debt-to-income ratio also affect the final figure.
What is a good HELOC interest rate?
As of March 2026, the national average is 7.17%. The best rates from top lenders start around 6.05% to 6.24% for borrowers with excellent credit (740+) and low CLTV ratios. Anything below 7% is strong in the current rate environment. Your rate depends on the prime rate (6.75% right now) plus a lender-set margin based on your credit profile.
How is HELOC interest calculated?
During the draw period, interest is calculated on your outstanding balance only (not the full credit limit). The monthly charge equals your current balance multiplied by your APR divided by 12. On a $50,000 balance at 8.50%, that’s $50,000 x 0.00708 = $354 per month. During the repayment period, payments follow a standard amortization formula covering both principal and interest.
Can I deduct HELOC interest on my taxes?
Only if you use the funds to buy, build, or substantially improve the home that secures the loan. IRS Publication 936 is clear on this: HELOC interest used for debt consolidation, tuition, or a vacation is not deductible. Interest on funds spent on qualifying home improvements (a new roof, a kitchen remodel, an addition) is where the deduction applies.
The combined mortgage debt limit for the deduction is $750,000 ($375,000 if married filing separately) for loans originated after December 15, 2017. Keep records of how you spend the proceeds.
What happens when the draw period ends?
You can no longer withdraw funds. Your minimum monthly payment switches from interest-only to principal-plus-interest, calculated over the remaining Repayment Period. For a $50,000 balance at 8.50%, that shifts your payment from $354 per month to $434 per month (a 23% increase). Some lenders offer the option to refinance into a new HELOC or convert to a fixed-rate home equity loan to manage the transition.
How does a HELOC affect my credit score?
A HELOC appears on your credit report as an installment or revolving account (reporting varies by lender). Opening one may cause a small, temporary dip from the hard inquiry. Using a high percentage of your credit limit can increase your credit utilization ratio, which may lower your score. Making consistent on-time payments helps build credit over time, similar to any other loan.
Can I pay off a HELOC early?
Yes, and there’s usually no penalty for doing so during the draw period (you’re simply reducing your balance). Some lenders charge an early termination fee (sometimes called a prepayment penalty) if you close the entire line within the first 2 to 3 years; this fee typically ranges from a few hundred dollars to 1% of the credit limit. Check your agreement for the term “early closure fee” or “early termination fee.”
What is the difference between LTV and CLTV?
LTV (loan-to-value) considers only your primary mortgage. CLTV (combined loan-to-value) adds your HELOC balance on top. Lenders use CLTV when evaluating a HELOC application because it reflects total debt secured by the property. A $300,000 mortgage on a $500,000 home is 60% LTV. Add a $50,000 HELOC and the CLTV becomes 70%. Most lenders require CLTV at or below 85%.
Is a HELOC a second mortgage?
Yes. A HELOC is a lien on your property in second position behind your primary mortgage. If you default and the home is sold, the primary mortgage gets paid first; the HELOC lender gets what’s left. This subordinate position is one reason HELOC rates are typically higher than first mortgage rates. From a practical standpoint, missing HELOC payments can lead to foreclosure.
What are HELOC closing costs?
Many lenders advertise low or zero closing costs on HELOCs, though the actual figure typically falls between 1% and 5% of the credit limit when fees are charged. Common fees include application fees, appraisal fees ($300 to $600), title search costs, and document preparation fees.
Some lenders waive these fees but charge a higher rate or impose an early termination fee if you close the line within a few years. Compare the total cost, not just the interest rate, when shopping lenders. Know your income before committing; the paycheck calculator shows your actual take-home pay after taxes.
Sources
- Federal Reserve: Consumer credit data and interest rate decisions
- Consumer Financial Protection Bureau: “What is a home equity line of credit (HELOC)?”
- IRS Publication 936: Home Mortgage Interest Deduction, 2025 edition
- Bankrate: National HELOC rate survey, March 18, 2026
- NerdWallet: HELOC Rates and prime rate data, March 2026
Your next step
Three things to take away from this page:
- Your draw period payment and your repayment payment are two different numbers; plan for the higher one
- Check your CLTV before shopping lenders (the calculator does this instantly)
- Current HELOC rates average 7.17%, but the best borrowers are getting rates in the low 6% range
That payment shock between draw and repayment is the number most borrowers overlook. Now you won’t. Run the numbers yourself using the calculator above. If you’re evaluating whether your income supports the payment, the salary calculator provides median compensation data by profession. For the full suite of tools, head back to our financial calculators hub.
This calculator provides estimates for informational purposes only. Actual amounts may vary based on additional deductions, local taxes, and employer-specific withholdings. Consult your HR department or a licensed tax professional for exact figures.