HELOC Calculator
See how much you can borrow against your home equity and what the monthly payment looks like during the draw period and after.
How a HELOC works
A Home Equity Line of Credit is a revolving line — like a credit card — secured by the equity in your home. You're approved for a maximum line amount, then you can draw against it as needed during the "draw period" (usually 10 years), paying interest only on what you've actually drawn. After the draw period ends, the line converts to a repayment phase with principal-and-interest payments over 10-20 years.
Two phases, two very different payments
- Draw period (years 1-10) — borrow and repay flexibly. Most HELOCs are interest-only during this phase. Payments are small but principal stays untouched.
- Repayment period (years 11-30) — line freezes, no more draws. You start paying principal + interest, fully amortized. Payments jump significantly.
The "payment shock" at the end of the draw period catches many borrowers off guard. Plan for it.
Your home is worth $450,000 with a $245,000 mortgage balance. A lender offers a HELOC up to 85% combined LTV at 7.5%, with a 10-year draw period and 20-year repayment.
You decide to draw $50,000 to fund a rental property down payment.
That's manageable — but only because you're paying interest only. Ten years later, the line converts:
And that assumes you didn't draw any more. If you stayed near the limit the whole 10 years, the repayment phase shock would be much bigger.
Investor uses for a HELOC
HELOCs are one of the most flexible tools an investor has access to:
- Down payment on a rental property — borrow from your primary residence's equity to fund an investment property purchase.
- BRRRR rehab funding — fund the rehab phase with the HELOC, then pay it back when you cash-out refinance.
- All-cash offers — close fast with HELOC funds, then put long-term financing in place via delayed financing or refinance.
- Emergency reserve — keep the line open and untapped as backup capital for property emergencies.
HELOC vs cash-out refinance
Use a HELOC when: you want flexible access to capital, only need to borrow occasionally, current mortgage rate is much better than today's market, you're a real estate investor wanting a reusable credit line.
Use a cash-out refi when: you need a large fixed amount, you want a fixed interest rate, current rates are at or below your existing rate, you don't want a future payment shock.
The biggest HELOC risks
- Variable rates. Most HELOCs are tied to Prime + a margin. If rates rise, your payment rises.
- Payment shock at conversion. When the draw period ends, your payment can double or triple.
- Lender can freeze the line. If property values drop or your credit changes, lenders can reduce or freeze your available credit, sometimes without warning. This happened to many homeowners in 2008-2009.
- It's still secured by your home. Default and you lose the house.
Frequently asked questions
What's a typical HELOC interest rate?
HELOC rates are usually Prime + 0% to Prime + 2% depending on your credit and LTV. As of mid-2026 with Prime at 6.75%, HELOC rates run roughly 7.0–8.5%. They're variable, so they move with Prime.
Can I get a HELOC on a rental property?
Yes, but with worse terms. Investment property HELOCs typically cap at 70-75% CLTV (vs 85% for primary residence), require higher credit scores (700+), and charge 1-2% higher rates. Many lenders don't offer them at all on rentals.
Are HELOCs tax-deductible?
Only if used to "buy, build, or substantially improve" the home securing the HELOC. Using a HELOC to fund a down payment on a different property generally doesn't qualify. Talk to a CPA.
Can the lender close my HELOC?
Yes, especially if home values drop sharply, your credit deteriorates, or the lender's policies change. Lenders are legally allowed to freeze or reduce your line in certain conditions. Don't depend on the full amount being available forever.
How fast can I get a HELOC?
Typically 30-45 days from application to first draw availability. Some online lenders advertise faster (15-20 days). The bottleneck is usually the home appraisal.
HELOC terms vary by lender and change over time. Variable rates mean payments can change. Always read the disclosure carefully to understand rate caps, fees, and conditions under which the lender can reduce or freeze your line.