This guide walks you through the HELOC calculator inputs, available credit logic, draw vs repayment periods, and how to interpret payment shock and total interest costs.
What the Tool Does
The HELOC calculator computes your available credit based on CLTV limits, your draw period payment (interest-only), repayment period payment (principal + interest), total interest costs over 30 years, and a visual breakdown of your home equity. It helps you model different scenarios before committing to a HELOC.
What You'll Calculate
- Available Credit: How much you can borrow based on your home value, existing mortgage, and lender's CLTV limit
- Draw Period Payment: Your monthly payment during the first 10 years (interest-only)
- Repayment Period Payment: Your monthly payment after year 10 (principal + interest)
- Total Interest: How much interest you'll pay over the full 30-year term
- Home Equity Breakdown: Visual chart showing mortgage, HELOC draw, and remaining equity
Step-by-Step Inputs
- Home Value ($): Enter your current home's market value using recent sold comps from Zillow, Redfin, or your latest property tax assessment. Be realistic, as lenders will order an appraisal.
- Existing Mortgage Balance ($): Input your current first mortgage balance from your latest statement. If you have no mortgage, enter $0. The calculator subtracts this from your maximum borrowing capacity.
- Max CLTV (%): Set the Combined Loan-to-Value ratio your lender allows. Typical: 80-85% for primary residences, 75-80% for condos, 70-75% for investment properties.
- Draw Amount ($): Enter how much you plan to borrow. Common amounts: $50k-$100k for renovations, $20k-$50k for debt consolidation, $30k-$75k for BRRRR down payments.
- Interest Rate (%): Enter your expected APR (8.00-10.50% as of 2025). Credit unions often beat big banks by 0.5-1%.
- Draw Period (years): Set how long you can borrow and make interest-only payments (standard is 10 years).
- Repayment Period (years): Set how long you'll repay the balance after the draw period ends (standard is 20 years).
- Calculate: Click Calculate to see available credit, draw period payment, repayment period payment, total interest, and equity breakdown chart.
Example Scenario
Let's walk through a typical HELOC:
- Home value: $500,000
- Existing mortgage: $300,000
- Max CLTV: 80%
- Draw amount: $50,000
- Interest rate: 8.5%
- Draw period: 10 years
- Repayment period: 20 years
Results:
- Current equity: $200,000 (40% of home value)
- Current LTV: 60%
- Max available credit: ($500k × 0.80) - $300k = $100,000 available
- Draw period payment (Years 1-10): $354/month (interest-only on $50k at 8.5%)
- Repayment period payment (Years 11-30): $432/month (principal + interest)
- Payment increase: $78/month (22% higher)
- Draw period interest: $42,500
- Repayment period interest: $53,976
- Total interest: $96,476
- Total repaid: $146,476 ($50k borrowed + $96k interest)
Understanding CLTV & Available Credit
CLTV (Combined Loan-to-Value) is the total of all liens on your home divided by the home's value. It determines how much credit you can access.
Formula: Available Credit = (Home Value × CLTV %) - Existing Mortgage Balance
Example calculation:
- Home value: $500,000
- CLTV limit: 80%
- Max total debt: $500k × 0.80 = $400,000
- Existing mortgage: $300,000
- Available credit: $400k - $300k = $100,000
If you try to draw more than $100k, the calculator will show a formatted error message with the exact available amount and suggestions to adjust.
Draw Period vs Repayment Period
Draw Period (typically 10 years):
- You can borrow funds up to your credit limit
- Pay interest-only on the outstanding balance
- Revolving credit: pay down and borrow again
- Payment calculation: Draw Amount × (Interest Rate ÷ 12)
- Example: $50k × (8.5% ÷ 12) = $354/month
Repayment Period (typically 20 years):
- Draw period ends, you can no longer borrow
- Payment increases to cover principal + interest
- Full balance amortized over remaining 20 years
- Example: $50k at 8.5% for 20 years = $432/month
- Payment shock: 22-150% increase depending on balance and term
Common Use Cases
Home Renovation ($75k):
- Draw $75k at 8.5% = $531/month during draw period
- Repayment period = $649/month
- Benefit: Only pay interest on $75k, not the full $100k available
Debt Consolidation ($40k credit cards at 22%):
- Current credit card payment: ~$1,200/month
- HELOC draw period payment: $283/month at 8.5%
- Savings: $917/month, $110,040 over 10 years
BRRRR Real Estate Investment ($50k):
- Buy property with HELOC funds
- Rehab and rent it out
- Cash-out refinance the rental property
- Pay back HELOC, repeat with next property
- HELOC becomes revolving capital for multiple deals
Running Multiple Scenarios
Scenario A: Lower Draw Amount ($30k instead of $50k)
- Draw period payment: $212/month (vs $354)
- Repayment period payment: $259/month (vs $432)
- Total interest: $57,886 (vs $96,476), Save $38,590
Scenario B: Higher Interest Rate (10% vs 8.5%)
- Draw period payment: $417/month (vs $354)
- Total interest: $115,790 (vs $96,476), $19,314 more expensive
Scenario C: Paying Extra Principal During Draw Period
- Pay $500/month instead of $354 minimum = $146 extra principal/month
- Principal paid down in 10 years: ~$17,500
- Remaining balance at year 10: $32,500 (instead of $50k)
- New repayment payment: $281/month (instead of $432)
- Total interest saved: ~$27,000
FAQs
Q: What is CLTV and how does it affect available credit?
A: CLTV (Combined Loan-to-Value) is the total of all liens on your home divided by the home's value. Most lenders allow 80-85% CLTV for primary residences. Formula: Available Credit = (Home Value × CLTV %) - Existing Mortgage.
Q: What is the draw period vs repayment period?
A: The draw period (typically 10 years) allows you to borrow funds and make interest-only payments. The repayment period (typically 20 years) begins after the draw period ends, you can no longer borrow, and payments increase to cover both principal and interest.
Q: Can I pay principal during the draw period?
A: Yes! Paying down principal during the draw period reduces your future repayment period payment and saves thousands in interest. Even $100-$200/month extra makes a huge difference.
Q: Why does my payment increase so much after the draw period?
A: During the draw period, you only pay interest. When the repayment period starts, you must pay both principal and interest to fully repay the balance. This is called "payment shock", and your payment can increase 50-150%.
Next Steps
Ready to calculate your HELOC scenario?
Want to compare HELOC vs home equity loan?
Worried about payment shock when your draw period ends?