Home Equity Line of Credit Loan Calculator

A home equity line of credit (HELOC) is a revolving loan secured by your home; this calculator estimates the monthly payment and total interest for a fixed-rate, fully drawn balance repaid with level monthly payments. Enter the amount borrowed, annual percentage rate (APR), and repayment term to see an illustrative payment and interest total.

Formula

The calculator uses the standard amortizing-loan payment formula. It treats the annual APR as a nominal rate divided into 12 monthly periods:

Monthly payment = P × r / [1 − (1 + r)−n]

• P is the amount borrowed, in dollars.
• r is the monthly interest rate, calculated as APR ÷ 1,200. For an 8% APR, r = 0.08 ÷ 12.
• n is the number of monthly payments, calculated as years × 12.
• APR is the annual percentage rate entered as a percentage, not a decimal.

Total interest is estimated as the rounded monthly payment multiplied by the number of payments, minus the original principal: Total interest = payment × n − P. The payment is rounded to the nearest cent before the interest total is calculated. A lender’s actual payment schedule may differ because of its rate structure, payment dates, fees, and rounding practices.

Worked Example

Using the calculator’s defaults: a $20,000 balance, 8% APR, and a five-year repayment term:

1. Convert APR to a monthly rate: 8 ÷ 1,200 = 0.0066667.
2. Find the number of payments: 5 × 12 = 60.
3. Substitute into the payment formula: $20,000 × 0.0066667 ÷ [1 − (1.0066667)⁻⁶⁰].
4. The monthly payment rounds to $405.53.
5. Total payments using the rounded amount: $405.53 × 60 = $24,331.80.
6. Estimated total interest: $24,331.80 − $20,000 = $4,331.80.

Assumptions

• The rate is fixed for the entire modeled repayment period.
• Payments are made monthly, with the first payment one month after the balance is borrowed.
• Interest compounds monthly at APR ÷ 12.
• The calculation excludes fees, taxes, insurance, property costs, and any escrow or payment features.
• It assumes the entire stated amount is borrowed at the outset and repaid through equal payments; it does not model later draws.

How a HELOC Works

A HELOC is a credit line secured by the borrower’s home. Instead of receiving one fixed lump sum, a borrower may draw money as needed up to the available credit line, subject to the agreement. The home is collateral, so failure to meet repayment obligations can put the property at risk.

Many HELOC agreements separate borrowing into a draw period and a repayment period. During the draw period, the borrower may be able to take additional advances and repay some or all of the outstanding balance, as the contract allows. Once repayment begins, new borrowing may no longer be available, and the balance must be paid down under the agreement. Some contracts require interest-only payments during part of the draw period; others require principal as well. Payment terms vary, so the lender’s disclosures and contract determine the actual schedule.

A HELOC is revolving credit, but this calculator models it as a single, fully drawn balance with a fixed rate and a conventional amortizing repayment term. It is not a payment quote for a particular line.

What the Estimate Does—and Does Not—Show

The payment is the modeled amount needed each month to repay the entered balance and interest over the selected term, assuming the inputs and formula assumptions hold. The interest total is the sum of modeled payments above the original principal. It is not the same as the credit limit, the amount available to borrow, or the total cost of maintaining a home.

Actual HELOC rates may be variable, meaning the rate can change under terms specified in the agreement. A changing rate can alter required payments and the total interest paid. A line may also have fees or other charges that this calculator does not include. Ask the lender for the APR, rate-change terms, fees, draw and repayment periods, minimum-payment method, and any payment that may become due at the end of a period. Enter the relevant rate and balance only as a hypothetical illustration; a changing rate cannot be represented accurately by this fixed-rate calculation.

How to Compare the Numbers Carefully

For a useful estimate, distinguish the amount you plan to draw from the total credit line. If you expect to borrow in stages, a single-balance calculation will not reflect when each advance occurs or how long it accrues interest. You would need a separate schedule that accounts for each draw, payment, and rate change.

• Use the APR and repayment term supplied for the specific scenario you are examining; the default values are examples, not a statement about current offers.
• Check whether a quoted payment is interest-only, a minimum payment, or a fully amortizing payment. Those figures are not interchangeable.
• Look at the full payment timeline, including what happens when a draw period ends and whether a remaining balance is repaid over a shorter period.
• Compare the agreement’s fees and rate-change conditions separately, since they are not included in the displayed arithmetic.

Do not treat the result as an approval prediction or as a measure of what amount a household can manage. It shows only a mathematical payment under the stated assumptions; it does not account for income, other debts, changing expenses, or the possibility that the home’s value changes.

Common Misconceptions and Limits

A common misconception is that a HELOC’s available credit is the same as a balance already borrowed. Interest generally relates to the outstanding balance under the contract, not simply the unused portion of a line, but the exact terms should be checked with the lender. Another misconception is that every HELOC payment is interest-only: payment rules vary, and repayment-period payments can be substantially different from payments during a draw period.

This calculator also assumes a positive APR and equal monthly payments. It cannot model variable rates, irregular payment dates, extra payments, new advances, interest-only periods, fees, or a payoff amount on a particular date. Rounding the payment to cents can cause a small difference from a lender’s final installment or total. For actual amounts and obligations, use the lender’s written disclosures and account information.

Frequently Asked Questions

What is a home equity line of credit?
A HELOC is a revolving credit line secured by a home. The borrower can draw funds under the agreement and generally owes interest on the outstanding balance, subject to the contract’s terms.

Is a HELOC payment fixed?
Not necessarily. A variable rate or changing balance can change the payment, and payment requirements can differ between draw and repayment periods. This calculator assumes a fixed rate and one fully drawn balance.

Does this calculator include HELOC fees?
No. It estimates principal-and-interest payments under its assumptions. Ask the lender for applicable fees and how they affect the full cost.

Can I use this calculator for an interest-only payment?
No. The formula calculates a fully amortizing payment that repays principal and interest over the selected term. An interest-only payment uses a different calculation and does not reduce principal during the interest-only period.

Why can my lender’s payment differ?
The lender may use a variable rate, different payment dates, a different repayment structure, fees, or different rounding. The calculator also assumes the full amount is borrowed at once and does not model later draws.

This result is an estimate; the lender’s disclosure gives the exact figures.

Related

• Second Home Equity Line of Credit: Costs and Risks
• Figure Home Equity Line of Credit Calculator
• Five-Year HELOC Payment Calculator and Guide

in p | Loan amount | $ | 20000 | 1 | 100000000
in apr | Interest rate (APR) | % | 8 | 0.01 | 100
in yrs | Loan term | years | 5 | 0.0833 | 50
out pmt | Monthly payment | $ | p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2