HELOC Calculator

A home equity line of credit is revolving borrowing secured against your home. It has two distinct phases, and confusing them causes genuine payment shock.

During the draw period you can borrow, repay, and borrow again up to a limit, and many HELOCs allow interest-only payments during this phase. Those payments are low precisely because they repay no principal at all. When the draw period ends, the line converts to a repayment period during which principal and interest must both be repaid over a shorter remaining term. The monthly payment can rise sharply at that transition — and it is scheduled, foreseeable, and still routinely catches borrowers unprepared.

HELOC rates are typically variable, tied to a published index. That means the payment can move with rates even before the phase change, unlike a fixed-rate home equity loan which trades flexibility for a predictable payment. Which is better depends on whether you need a known payment or an open line.

The overriding consideration is the collateral. A HELOC is secured by your home, so failure to repay risks foreclosure. That justifies the lower rate relative to unsecured borrowing, and it is also why using one to consolidate unsecured debt deserves careful thought: it converts debt that could not take your house into debt that can. Everything runs in your browser — no login, no upload, and no figure you enter leaves the page.