HELOC Calculator Guide: How Much You Can Borrow and What It Costs

How lenders calculate available home equity, how a HELOC's two payment phases work, and how it compares to a fixed home equity loan.

Home equity is straightforward on paper — what your home is worth minus what you still owe — but how much of that equity you can actually borrow, and what it will cost, depends on your lender's loan-to-value limits and which type of equity product you choose.

Equity vs. what you can actually borrow

Available to borrow = (home value × max combined loan-to-value) − existing mortgage balance. Lenders typically cap combined loan-to-value (CLTV) at 80-85%, which means your borrowable amount is always somewhat less than your raw equity — the lender keeps a cushion in case home values drop.

A HELOC has two very different payment phases

• Draw period (often 5-10 years): many HELOCs only require an interest-only payment on the drawn balance, keeping payments low.
• Repayment period (often 10-20 years): once the draw period ends, the balance converts to a fully amortizing payment (principal and interest) — usually a meaningfully higher monthly payment than the interest-only phase.

This two-phase structure is why a HELOC's low early payment can be misleading — the Home Equity Loan / HELOC Calculator shows both numbers side by side so the jump isn't a surprise.

Fixed vs. variable: the other key difference

A home equity loan is a fixed lump sum at a fixed rate — the payment you calculate today is the payment for the life of the loan. A HELOC's rate is usually variable, tied to an index like the prime rate, so the actual payment can rise or fall as rates move — a real factor to weigh against the flexibility of only drawing what you need, when you need it.