HELOC Calculator

A Home Equity Line of Credit (HELOC) is a revolving line of credit secured by your home equity. It works like a credit card—you can borrow up to a limit, repay, and borrow again. HELOCs typically have variable rates and two phases: draw period (5-10 years when you can borrow) and repayment period (10-20 years when you must repay).

Most lenders allow you to borrow up to 80-85% of your home equity. For example, if your home is worth $400,000 and you owe $250,000, you have $150,000 equity. At 80%, you could get a HELOC for up to $120,000. Your credit score and income also affect the amount.

HELOC rates are typically variable and based on the prime rate plus a margin (usually 0.5% to 2%). As of 2024, expect rates around 8-11%. Some lenders offer fixed-rate options or allow you to lock in portions of your balance at fixed rates. Rates can change monthly.

Interest may be tax deductible if you use the funds to buy, build, or substantially improve your home (the property securing the loan). Interest is NOT deductible if used for personal expenses, debt consolidation, or other purposes. Consult a tax professional for your specific situation.

The main risk is losing your home if you cannot repay—your home is collateral. Other risks: variable rates can increase payments, draw period ending requires full repayment, and reduced home equity limits future borrowing options. Use HELOCs responsibly for value-adding purposes.