Estimate the maximum HELOC (Home Equity Line of Credit) available based on home value, mortgage balance, and the lender's combined loan-to-value cap. Computes interest-only draw-period payments and full amortizing repayment-period payments.
Max HELOC = home_value × CLTV_cap - existing_mortgage. With a $500k home, 85% CLTV cap, and $300k mortgage: max = $500k × 0.85 - $300k = $125k. Most HELOCs have a draw period (typically 10 years, interest-only) and a repayment period (typically 20 years, principal + interest). Rates are variable, tied to prime rate.
Disclaimer: Estimates only. Actual HELOC terms depend on credit score, DTI, lender rules, and current rate environment. Variable rates can rise substantially - stress-test at 2-3% above current rate.
Calculator information
📋 How to use this calculator
- Enter current home value (use a recent Zillow estimate or appraisal).
- Enter your current mortgage balance (not the original loan amount - check your most recent statement).
- Set the lender's CLTV cap - most US banks cap combined loan-to-value at 80-90%.
- Enter the amount you plan to draw (does not have to equal the maximum available).
- Set the variable APR - HELOCs typically run prime rate + 0.5% to 2%. Prime is around 7.5% in May 2026.
- Set draw period (typically 10 years, interest-only) and repayment period (typically 20 years, amortizing).
🧮 HELOC Maximum and Payments
Max = Home_value x CLTV - Mortgage ; Repay PMT = P x [r(1+r)^n] / [(1+r)^n - 1]
- Max HELOC available = (Home value x CLTV cap) - Existing mortgage balance
- Draw-period payment = Outstanding balance x (Annual rate / 12) - INTEREST ONLY
- Repayment-period PMT = standard amortization (principal + interest)
- Combined loan-to-value (CLTV) = (Mortgage + HELOC) / Home value
- Most banks cap CLTV at 80-90% depending on credit and property type
HELOC rates are variable, tied to prime. As of May 2026, prime is ~7.5%, so HELOC rates run 8-9.5% for borrowers with good credit. Interest is tax-deductible only if proceeds go toward buying, building, or substantially improving the home (TCJA rules, ongoing post-2025).
💡 Worked example: Drawing $50,000 on a $500k Home
Given:- Home value: $500,000
- Current mortgage: $300,000
- Bank CLTV cap: 85%
- Draw amount: $50,000
- Variable APR: 8.5%
- Draw period: 10 years interest-only
- Repayment period: 20 years
Steps:- Maximum HELOC available: $500,000 x 0.85 - $300,000 = $425,000 - $300,000 = $125,000
- Drawing $50,000 (well below the $125k cap, leaving headroom)
- Draw-period monthly payment: $50,000 x (0.085 / 12) = $354.17 (interest only)
- Repayment-period monthly payment: $50,000 x [(0.085/12)(1+0.085/12)^240] / [(1+0.085/12)^240 - 1] = $434/month
- Total draw-period interest (10 yr): $354.17 x 120 = $42,500
- Total repayment-period interest (20 yr): $434 x 240 - $50,000 = $54,160
- Total interest if drawn fully day-1 and held to maturity: $96,660
Result: Draw payment $354/mo (interest only), repayment payment $434/mo. Total interest over 30 years: $96,660 on a $50,000 draw.
❓ Frequently asked questions
How much HELOC can I qualify for?
Maximum HELOC = (home value x CLTV cap) - existing mortgage. Most banks cap CLTV at 80-90%. With a $500k home, an 85% cap, and a $300k mortgage: ($500k x 0.85) - $300k = $125k maximum. Your credit score, debt-to-income ratio, and income verification will narrow this further at the lender level. Most lenders require a 680+ FICO and DTI under 43-50%.
Draw period vs repayment period - what is the difference?
A HELOC has two phases. The draw period (typically 10 years) lets you borrow up to the line, with interest-only minimum payments. The repayment period (typically 20 years) closes the line and the balance amortizes with principal + interest. Most borrowers experience 'payment shock' when draw ends and payments jump 50-100%. Some HELOCs offer a 5-year extension option at the end of draw.
Is HELOC interest tax-deductible?
Only if proceeds go toward 'buying, building, or substantially improving' the home that secures the loan, per the 2017 TCJA. Cash-out for any other purpose (debt consolidation, college tuition, vacation) is no longer deductible. The total mortgage + HELOC interest deduction is capped at the interest on $750k of qualifying debt ($375k MFS). Keep good records of how you used HELOC proceeds in case of audit.
HELOC vs cash-out refinance vs home equity loan?
Three different products. HELOC: revolving credit line, variable rate, draw period + repayment period, only interest on outstanding balance. Cash-out refinance: replaces your existing mortgage with a larger one, fixed or variable rate, single lump sum, full amortization. Home equity loan (HEL): second-mortgage lump sum, usually fixed rate, fixed amortization. Use HELOC when you need flexibility on draw timing. Use cash-out refi when your current mortgage rate is at or above current rates. Use HEL when you want predictable fixed payments on a known amount.
Can my lender freeze or reduce my HELOC?
Yes. Lenders can freeze the unused portion of a HELOC or reduce the credit line if your home value drops significantly, your credit score falls, or you have payment problems on the line itself. They cannot recall money you have already drawn. Many borrowers had their HELOCs frozen during the 2008-2010 housing crisis. To preserve access, consider drawing a small amount once or twice a year to keep the line 'active' in the lender's eyes.
📚 Sources & references
Last updated: May 13, 2026