🏠 HELOC Calculator

A Home Equity Line of Credit (HELOC) is a revolving credit line secured by your home. Lenders typically allow you to borrow up to 85% of your home's value minus your mortgage balance. A HELOC has two phases: a draw period (usually 10 years) where you can borrow and pay interest only, followed by a repayment period (usually 20 years) where you pay back principal plus interest.

A home equity loan gives you a lump sum at a fixed rate — like a second mortgage. A HELOC is a revolving line of credit with a variable rate, like a credit card secured by your home. HELOCs offer more flexibility (borrow only what you need), while home equity loans provide payment predictability with a fixed rate.

HELOC interest is tax-deductible only if the funds are used to 'buy, build, or substantially improve' your home (per IRS rules post-2017 Tax Cuts and Jobs Act). Interest on HELOCs used for personal expenses (vacations, cars, debt consolidation) is NOT deductible. Consult a tax professional for your specific situation.

Most lenders require a minimum credit score of 620 for a HELOC, though scores of 700+ qualify for the best rates. Lenders also typically require: at least 15–20% home equity, a debt-to-income ratio below 43%, and documented income.

At the end of the draw period (typically 10 years), your HELOC enters repayment. You can no longer borrow from the line, and your monthly payment jumps significantly because you now pay both principal and interest over the remaining 20-year term. Review your loan terms carefully before the transition.