HELOC Calculator
With home value 450000 usd, mortgage balance 260000 usd, lender will lend up to 85 percent, how much you draw 60000 usd and 3 more fields, heloc comes to $425.00 — payment while drawing. It is reached in 13 steps, the last of which is 60000 * 0.0070833, and each one is printed on the page with its numbers filled in. The formula is the one published by Consumer Financial Protection Bureau, not an approximation fitted to it.
What a home equity line of credit costs while you draw on it, and what the payment jumps to on the day the draw period ends.
Formula and sources checked · How we check
Home value 450000, Mortgage balance 260000, Lender will lend up to 85, How much you draw 60000
$425.00
Payment while drawing for the example below. Editing a field recomputes the calculator below; this figure holds the answer the page was loaded with.
It is written into the HTML rather than drawn by a script, so a search engine reading this page without running JavaScript still finds an answer.
- Most the lender will allow against the home
450000 * 85 / 100382,500 usd- Credit line available
max(0, 382500 - 260000)122,500 usd- Equity you hold
450000 - 260000190,000 usd- Monthly rate
8.5 / 100 / 120.007- Payment while drawing, interest only
60000 * 0.0070833425 usd- Months of repayment
20 * 12240- Payment once repayment starts
60000 * 0.0070833 / (1 - pow(1 + 0.0070833, -240))520.694 usd- What the payment jumps by
520.69394 - 42595.694 usd- Times larger
520.69394 / 4251.225- Interest paid during the draw period
425 * 10 * 1251,000 usd- Paid over the repayment period
520.69394 * 240124,966.546 usd- Total interest over the whole line
51000 + 124966.55 - 60000115,966.546 usd- Combined loan-to-value once drawn
(260000 + 60000) / 450000 * 10071.111 %
Worked example
Drawing $60,000 against a $450,000 home with $260,000 still owed costs $425.00 a month while the draw period runs. That is interest only, so after ten years of paying it the $60,000 owed is still $60,000 — and $51,000 has gone in interest. The payment then becomes $520.69 for twenty years, and the line ends up costing $115,967 in interest on $60,000 borrowed.
How to work it out yourself
- 1.Enter what the home is worth and what is still owed on the first mortgage.
- 2.Set the combined loan-to-value your lender allows — 85% is the common ceiling.
- 3.Enter how much of the line you actually plan to draw, not the whole line.
- 4.Compare the two payments. The second one is what you will owe from the day the draw period ends, and it is not optional.
Payment before and after the draw period ends, by amount drawn
| How much you draw (usd) | Payment while drawing | Payment while drawing, interest only | Payment once repayment starts | What the payment jumps by |
|---|---|---|---|---|
| 10000 | $70.83 | 70.83 usd | 86.78 usd | 15.95 usd |
| 20000 | $141.67 | 141.67 usd | 173.56 usd | 31.9 usd |
| 30000 | $212.50 | 212.5 usd | 260.35 usd | 47.85 usd |
| 40000 | $283.33 | 283.33 usd | 347.13 usd | 63.8 usd |
| 50000 | $354.17 | 354.17 usd | 433.91 usd | 79.74 usd |
| 60000 | $425.00 | 425 usd | 520.69 usd | 95.69 usd |
| 75000 | $531.25 | 531.25 usd | 650.87 usd | 119.62 usd |
| 100000 | $708.33 | 708.33 usd | 867.82 usd | 159.49 usd |
Both columns are the same loan at the same rate. The only thing that changes on the day the draw period ends is that principal starts being repaid.
The formula
- Most the lender will allow against the home
450000 * 85 / 100 - Credit line available
max(0, 382500 - 260000) - Equity you hold
450000 - 260000 - Monthly rate
8.5 / 100 / 12 - Payment while drawing, interest only
60000 * 0.0070833 - Months of repayment
20 * 12 - Payment once repayment starts
60000 * 0.0070833 / (1 - pow(1 + 0.0070833, -240)) - What the payment jumps by
520.69394 - 425 - Times larger
520.69394 / 425 - Interest paid during the draw period
425 * 10 * 12 - Paid over the repayment period
520.69394 * 240 - Total interest over the whole line
51000 + 124966.55 - 60000 - Combined loan-to-value once drawn
(260000 + 60000) / 450000 * 100
Source: Consumer Financial Protection Bureau — The difference between a home equity loan and a HELOC, Federal Reserve — Selected interest rates (H.15), bank prime loan rate
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