HELOC Calculator

A Home Equity Line of Credit (HELOC) is a revolving credit line secured by your home equity. Like a credit card, you draw what you need up to your limit, pay interest only on what you use, and repay to restore availability.

HELOCs typically have a 10-year draw period where you can borrow and make interest-only payments. After the draw period, you enter a 20-year repayment period where you pay both principal and interest on the outstanding balance.

Most HELOCs have variable rates tied to the prime rate. When the Federal Reserve raises rates, your HELOC rate goes up and your payment increases. Some lenders offer fixed-rate conversion options for part or all of your balance.

Common uses include home improvements (which may preserve the interest deduction), debt consolidation, education expenses, emergency funds, and investment opportunities. Avoid using a HELOC for consumable purchases like vacations.

A home equity loan gives you a lump sum at a fixed rate. A HELOC is a revolving line of credit at a variable rate. Home equity loans are better for specific large purchases; HELOCs are better for ongoing or uncertain expenses.

Yes. Lenders can freeze or reduce HELOCs if your home's value drops significantly, your creditworthiness declines, or market conditions change. This is why a HELOC should not be relied upon as an emergency fund.