HELOC Calculator
Find your available home equity, your monthly interest-only payment, and the full repayment schedule. Includes a side-by-side HELOC vs. cash-out refi vs. second mortgage comparison so you can pick the right one.
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HELOC Terms
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Closing costs: 3% of refi amount (default)
How HELOC Actually Works
A HELOC (Home Equity Line of Credit) is a revolving credit line secured by the equity in your home, with a position second to your primary mortgage. Unlike a mortgage or home equity loan, you don't get a lump sum — you get a credit limit you can draw from anytime, repay, and redraw, like a giant credit card secured by your house.
Most HELOCs have two phases. The draw period (typically 10 years) lets you borrow up to your credit limit and pay interest only on what you've actually drawn. The repayment period (typically 10-20 years after the draw period ends) converts the balance into an amortizing loan — you now pay principal + interest, and you can't draw any more. The minimum payment jumps sharply at this point. A $50,000 balance at 7.5% goes from $313/month interest-only to $463/month over 15 years — a 48% payment increase.
HELOC rates are variable, tied to the lender's prime rate. When the Bank of Canada or the Fed raises its policy rate, prime moves, and so does your HELOC payment. In the 2022-2023 hiking cycle, many homeowners saw their HELOC payments double. The trade-off for that risk: HELOCs are usually the cheapest way to access large amounts of money for short-to-medium-term needs (renovations, debt consolidation, education, investments) because closing costs are minimal ($0-500 vs. thousands for a refinance) and you only pay interest on what you actually use.
Frequently Asked Questions
What is a HELOC and how does it work?
A HELOC (Home Equity Line of Credit) is a revolving credit line secured by your home's equity, second in position to your mortgage. You get a credit limit (typically 65-80% of your home's value minus your mortgage balance) and draw as needed. Most HELOCs have a draw period (often 10 years) where you pay interest only on what you borrow, followed by a repayment period (10-20 years) where you pay back principal + interest. Rates are variable and tied to prime rate, so monthly payments can change as rates change.
How much HELOC can I get in 2026?
Most lenders let you borrow up to 65% of your home's value through a HELOC, or 80% of value across all home-secured debt (HELOC + mortgage). For a $600,000 home with a $350,000 mortgage, the 80% total limit is $480,000 — meaning your HELOC limit could be up to $130,000 ($480,000 - $350,000). In Canada, the standard is 65% LTV for HELOC-only or 80% combined. Lenders also require a minimum credit score (typically 620+ in the US, 680+ in Canada), stable income, and a debt-service ratio under 40-44%.
How is HELOC interest calculated?
HELOC interest is calculated daily on your outstanding balance. The formula is: (balance × annual rate ÷ 365) × days in month. The daily compounding matters — a 7% HELOC at $50,000 outstanding costs about $9.59/day, or $288/month. Most lenders convert this to a monthly payment of roughly balance × (rate ÷ 12). If you pay off the balance mid-month, you stop paying interest the next day. There are no prepayment penalties on most HELOCs.
HELOC vs. cash-out refinance: which is cheaper?
HELOC is usually cheaper if you need money for under 5-7 years. Closing costs on a HELOC are $0-500 (often waived) vs. 2-5% of the loan amount on a cash-out refi ($4,000-15,000 on a $300K refi). HELOC rates in 2026 are around 7.5-8.5% (prime ± 0.5%) in the US, while cash-out refi rates are 6.5-7.5%. Cash-out refi makes more sense for long-term needs (10+ years) or large amounts (over $100K), where the locked-in rate beats the variable HELOC rate over time. Use this calculator's comparison section to see your break-even.
Should I use a HELOC to pay off credit card debt?
Often, yes — but with caution. Credit cards charge 20-30% interest; a HELOC charges 7-8% in 2026, so the savings are massive. A $10,000 credit card balance at 22% APR costs $1,833/year in interest; the same balance on a HELOC at 7.5% costs $750/year. That's $1,083/year saved, or $5,000+ over the typical 5-year payoff. But the risk: credit card debt is unsecured, HELOC debt is secured by your home. If you can't repay, you can lose the house. Only do this if you have a real plan to pay off the HELOC and won't rack up new credit card debt.
What is the typical HELOC interest rate in 2026?
In 2026, US HELOC rates range from about 7.5% to 9.0% APR (typically prime rate minus 0.5% to prime plus 0.5%). Prime rate in mid-2026 is around 8.0%. In Canada, HELOC rates are prime (currently 6.45%) to prime + 0.5%, so about 6.45% to 6.95%. Introductory rates (often 4-6% for the first 6-12 months) are common but variable. Rates adjust monthly or quarterly with prime. Your rate depends on credit score, loan-to-value ratio, and the lender — credit unions typically beat banks by 0.25-0.5%.
What happens during the HELOC repayment period?
After the draw period ends (often 10 years), your HELOC converts to an amortizing loan. The full balance is now due over the repayment period (10-20 years). Minimum payments jump significantly because you're now paying principal + interest, not just interest. A $50,000 HELOC at 7.5% with a 15-year repayment period has a $463/month payment, vs. $313/month interest-only during the draw period. Some lenders offer a balloon payment option where the full balance is due at the end of the draw period — these are risky and should be avoided unless you have a clear exit plan.
Is HELOC interest tax deductible in 2026?
In the US, HELOC interest is deductible only if the loan is used to buy, build, or substantially improve the home that secures the loan (per the 2017 Tax Cuts and Jobs Act, in effect through 2025 and likely extended in 2026). Using a HELOC to pay off credit cards, buy a car, or pay for college is not deductible. You need to itemize on Schedule A. In Canada, HELOC interest is not deductible against regular income but can be deductible if used for investment purposes (rental property, investment portfolio) — claim it as a carrying charge on Schedule 4. Track how the funds are used; mixing purposes complicates the deduction.