HELOC Calculator
Calculate HELOC payments and costs across draw and repayment periods. Free home equity line of credit calculator with monthly payments, total interest, and balance chart.
About This Calculator
A Home Equity Line of Credit (HELOC) allows you to borrow against the equity in your home. It works like a credit card -- you draw funds as needed up to a pre-approved credit limit, pay interest only on the amount used during the draw period, and then repay principal plus interest during the repayment period. HELOCs are commonly used for home improvements, debt consolidation, major purchases, or emergency funds.
Our HELOC calculator estimates your monthly payments during both the draw period (interest-only) and the repayment period (fully amortizing), total interest costs, and total repayment amount. It also provides a balance-over-time chart so you can visualize how your outstanding balance changes throughout the loan term. The calculator supports users in India, the US, and the UK with region-appropriate defaults.
How HELOC payments work
A HELOC has two phases. During the draw period (typically 5-10 years), you pay only the interest that accrues on your outstanding balance. Your principal remains unchanged, which keeps payments lower. During the repayment period (typically 10-20 years), the loan converts to an amortizing structure where each payment covers both interest and principal, gradually reducing the balance to zero by the end of the term.
The monthly payment during draw period is calculated as: Balance x Monthly Interest Rate. The monthly payment during repayment uses the standard amortization formula: P x r(1+r)ⁿ / ((1+r)ⁿ - 1), where P is the outstanding balance, r is the monthly interest rate, and n is the number of repayment months.
Regional Notes
India: HELOCs are offered by select banks and NBFCs as loan against property (LAP) overdraft facilities. Interest rates typically range from 8-12% per annum. The draw period is usually 5-10 years with a repayment period of 10-15 years.
United States: HELOCs are widely available from banks and credit unions. Interest rates are typically variable, tied to the prime rate (currently ~7-9% APR). The draw period is commonly 10 years, and the repayment period is 20 years. Interest may be tax-deductible if used for home improvements (consult IRS guidelines).
United Kingdom: HELOCs are less common than in the US; homeowners typically use secured loans or mortgage remortgaging. Interest rates range from 4-7% depending on LTV and credit profile. Draw periods are typically 5-10 years.
Frequently Asked Questions
What is a HELOC?
A HELOC (Home Equity Line of Credit) is a revolving credit line secured by your home equity. It works like a credit card where you can borrow up to a certain limit, pay it back, and borrow again during the draw period. HELOCs typically have a draw period (5-10 years) followed by a repayment period (10-20 years).
How does HELOC interest work?
During the draw period, HELOC typically requires interest-only payments on the amount borrowed. The interest rate is usually variable, tied to a benchmark rate like the prime rate. During the repayment period, you pay both principal and interest to fully amortize the remaining balance over the repayment term.
How much HELOC can I get?
The HELOC amount depends on your home equity and lender policies. Typically, lenders allow borrowing up to 75-85% of your home value minus the existing mortgage balance. For example, if your home is worth ₹50,00,000 with a mortgage of ₹20,00,000, at 80% LTV you could get a HELOC of up to ₹20,00,000.
What is the difference between HELOC and home equity loan?
A HELOC is a revolving line of credit with variable rates and interest-only payments during the draw period. A home equity loan is a lump sum with fixed rates and fixed monthly payments. HELOC offers flexibility to borrow as needed, while a home equity loan provides a one-time lump sum with predictable payments.
Is HELOC interest tax deductible?
In the US, HELOC interest may be tax deductible if the funds are used to buy, build, or substantially improve your home (subject to IRS limits). In India, interest on loans for home improvement is deductible under Section 24(b) up to ₹2 lakh per year. Consult a tax professional for your specific situation.
What happens after the draw period ends?
After the draw period ends, the HELOC enters the repayment period. You can no longer draw additional funds, and the loan converts from interest-only payments to fully amortizing payments covering both principal and interest. Your monthly payment will increase significantly because you must now repay the principal balance over the remaining term. Some lenders may also require a balloon payment at the end.
What fees are associated with a HELOC?
HELOCs may have several fees: an annual fee ($50-100 in the US, ₹500-2000 in India), appraisal fees for home valuation, origination fees (typically 0-2% of the credit limit), closing costs, and early termination fees if you close the line within the first few years. Some lenders offer no-fee HELOCs in exchange for a slightly higher interest rate. Always review the fee schedule before signing.
Can I pay off my HELOC early?
Most HELOCs allow early repayment without prepayment penalties, but some lenders charge early termination fees if you close the line within 1-3 years of opening. Unlike mortgages, HELOCs typically do not have prepayment penalties, making them flexible for borrowers who want to pay down debt faster. In India and the UK, check your loan agreement for any prepayment charges.