Michigan HELOC Calculator

By SoFi Editors | Updated January 22, 2026

For Michigan homeowners, the equity in your home can be a powerful financial tool. If you’re exploring ways to tap into that equity, a home equity line of credit (HELOC) offers flexibility and ongoing access to funds for needs like home improvements, education costs, or debt consolidation.

A Michigan HELOC calculator helps you estimate potential monthly payments, understand how variable interest rates may affect your budget, and compare borrowing scenarios before you commit. Whether you’re planning ahead or already have a HELOC, this free calculator gives you clearer insight into how using your home equity could impact your finances.

  • Key Points
  • •   A home equity line of credit (HELOC) functions as revolving credit, allowing individuals to draw, repay, and re-draw funds during a set window.
  • •   Most agreements feature a two-phase lifecycle consisting of an initial draw period followed by a repayment period.
  • •   Interest rates are generally variable and fluctuate based on market benchmarks such as the prime rate.
  • •   The property serves as collateral for the financing, which places the home at risk of foreclosure if payments are missed.
  • •   A Michigan HELOC calculator can help you estimate monthly payments during the draw period and repayment period.



This calculator is for informational purposes only. The outputs are estimates based solely on information you input. Calculations are not an offer to make a loan or an approval. All SoFi loans are subject to eligibility restrictions and limitations not reflected in this calculator, including a loan applicant’s credit, income, property. SoFi products, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria.

Calculator Definitions

•   HELOC Balance: This figure represents the total amount of funds currently drawn from the credit line and not yet repaid. It serves as the principal sum upon which interest charges are calculated during the monthly billing cycle.

•   Current Interest Rate: The interest rate is the percentage charged by the lender for the use of the credit line, often tied to a benchmark like the prime rate. Because these rates are typically variable, they can rise or fall based on shifts in the broader economy.

•   Draw Period: The draw period is the initial timeframe, frequently lasting 10 years, during which a homeowner can actively withdraw funds from the credit line.

•   Repayment Period: Once the draw period concludes, the repayment period begins and the ability to withdraw additional funds is terminated. During this phase, the borrower must make regular payments that cover both the remaining principal and the interest over a set duration.

•   Monthly Interest Payment: This calculation shows the amount required to cover only the interest charges accrued on the outstanding balance for a single month. It does not reduce the principal balance but reflects the minimum cost of maintaining the financing during the draw phase.

•   Monthly Principal and Interest Payment: This value represents the total monthly obligation required during the repayment phase to fully pay down the balance by the end of the term. It combines the cost of interest with a portion of the principal to ensure the debt is eventually cleared.

How to Use the Michigan HELOC Calculator

A Michigan HELOC calculator helps you estimate monthly payments based on your home equity, loan terms, and interest rate. Here’s a step-by-step guide on how to use it:

Step 1: Enter Your Planned or Actual HELOC Balance

Enter the amount you plan to borrow or your current outstanding balance if you already have a HELOC. This figure is the foundation for the calculator’s monthly payment estimates.

Step 2: Estimate Your Interest Rate

Enter the interest rate your lender has offered or use a current market estimate if you’re still shopping for a HELOC. Because most HELOCs have variable rates, consider testing higher rates to see how potential market changes could affect your monthly payments.

Step 3: Choose the Length of Your Draw Period

Select how long you’ll be able to access and borrow from your HELOC, which is typically five to 10 years. This choice affects how long you’ll make interest-only payments and how much flexibility you’ll have before the repayment phase begins. Use a HELOC interest-only calculator to see what payments would be based on your balance.

Step 4: Specify Your Repayment Period

Enter the number of years you’ll have to repay the outstanding balance once the draw period ends, often 10 to 20 years. This selection affects both your monthly payment amount and the total interest you’ll pay over the life of the HELOC. Use a HELOC repayment calculator to see what those payments might be.

Step 5: Review Your Results

Once you’ve entered all the required details, review the calculator’s output to see your estimated monthly payments during both the draw period and repayment period. Use these results to assess affordability, compare scenarios, and decide whether a HELOC fits your financial goals.

Recommended: Different Types of Home Equity Loans

A home equity line of credit, or HELOC, allows homeowners to leverage the equity in their home for various needs. Unlike traditional second mortgages that provide a single lump sum, this product functions as a revolving credit line. This means that as the borrower makes payments toward the outstanding principal, the available credit is replenished, allowing them to use the funds again if needed.

The mechanics of this product are defined by two distinct phases: the draw period and the repayment period. The draw period is usually the first 10 years of the agreement. During this decade, the homeowner has the freedom to withdraw funds up to a set limit.

Once the draw period concludes, the instrument enters the repayment period, which typically spans 10 to 20 years. At this point, the revolving nature of the credit line ends, and no further withdrawals are permitted. The monthly payments shift to include both principal and interest, which can lead to a substantial increase in the amount due each month. Most of these instruments feature variable interest rates.

HELOCs can be a powerful tool for financial growth, but it requires a disciplined approach to management due to the inherent risk of using one’s primary residence as security.

From 2020 to 2025, rising home values and steady demand pushed homeowner equity to new highs across the U.S. Nationwide, average home equity increased 142%, representing roughly $11.5 trillion in total value. Michigan followed this broader trend, benefiting from more affordable home prices compared to many coastal markets, as well as consistent buyer interest in both urban and suburban areas.

During this same period, home equity in Michigan increased 116%, leaving the average homeowner with about $96,520 in equity as of 2025. This growth has turned home equity into a meaningful financial resource for many Michigan residents, whether they’re considering renovations, consolidating debt, or building a financial cushion.

Here’s a closer look at how equity has risen nationwide between 2020 and 2025.

Recommended: How to Get Equity Out of Your Home

How to Use the HELOC Calculator Data to Your Advantage

Understanding the numbers behind a HELOC can help you move from rough estimates to confident financial decisions. By interpreting the calculator’s results carefully, you can plan how and when to borrow, avoid payment surprises, and make sure tapping your home equity supports your long-term goals rather than creating unnecessary strain.

•  Test affordability before you borrow: Use the estimated monthly payments to see how a HELOC fits into your current budget during both the draw and repayment periods. This helps you decide whether the credit line is manageable alongside your current home loan and other financial obligations.

•  Run “what-if” scenarios: Adjust the interest rate, balance, or repayment term to see how changes could affect your payments. This is especially helpful with variable rates, as it shows how rising rates might impact your cash flow.

•  Plan smarter borrowing amounts: The calculator helps you identify a comfortable borrowing range, even if you qualify for a higher credit limit. Knowing your personal ceiling can prevent overborrowing and reduce financial stress later.

Tips on HELOCs

Here are some practical tips to help you use a home equity line of credit wisely and reduce risk while maximizing its flexibility:

•  Borrow with a clear purpose: Use your HELOC for planned expenses like home improvements, debt consolidation, or major purchases that support your long-term financial goals, rather than everyday spending.

•  Plan for variable interest rates: Because HELOC rates can change over time, budget for higher payments and consider running scenarios with increased rates to avoid surprises.

•  Pay down principal early when possible: Making payments toward the principal during the draw period can lower your balance before repayment begins and significantly reduce total interest costs.

•  Monitor your balance regularly: Keep track of how much you’ve borrowed and how close you are to your credit limit so you don’t overextend your home equity.

•  Compare lenders and terms carefully: Interest rates, fees, draw periods, and repayment terms vary by lender, so shopping around can help you find a HELOC that best fits your budget and financial needs.

Home Equity Loan

A home equity loan is a second mortgage that provides the borrower with a single lump sum of cash at the time of closing. It is a closed-end instrument, meaning once the funds are disbursed, they cannot be re-borrowed as the balance is paid down.

The primary differentiator compared to a line of credit is the interest rate structure. These products almost always feature a fixed interest rate and fixed monthly payments, providing a high level of predictability for the household budget. This makes it a preferred choice for those who have a one-time, set expense and want the security of knowing their payment will never change. While it uses the home as collateral like a HELOC, the lack of variability simplifies long-term budgeting.

A home equity loan calculator can help you compare the cost of this product to that of a HELOC.

Recommended: What Is a Home Equity Loan?

Home Improvement Loan

A home improvement loan is typically an unsecured personal financing product that provides a lump sum for specific property projects. Unlike equity-based instruments, this product does not require the home to be used as collateral, which can be an advantage for those who do not wish to risk their primary residence.

The key differentiator here is the lack of collateral, which usually results in a higher interest rate than secured products. Additionally, the repayment terms are often shorter, meaning monthly payments may be higher, but the debt is cleared much faster. This is an excellent option for homeowners who have not yet built up significant equity but need to fund repairs or upgrades without placing a second lien on their title.

Personal Line of Credit

A personal line of credit functions as a revolving credit account that is not tied to property value. It offers the same flexibility as a HELOC in terms of drawing and repaying funds as needed, but it is typically unsecured.

The main difference lies in the qualification process and the cost. Lenders base the credit limit and interest rate entirely on the individual’s creditworthiness and income rather than property equity. While it offers similar convenience, the interest rates are generally higher because there is no asset backing the credit line. It serves as a useful tool for ongoing expenses like medical treatments or smaller renovations where the homeowner wants to avoid the complexity and appraisal requirements of a second mortgage.

Cash-Out Refinance

A cash-out mortgage refinance involves replacing the existing primary mortgage with an entirely new mortgage for a higher amount than what is currently owed. The difference between the two balances is then paid to the homeowner in cash.

When comparing a cash-out refinance vs. home equity line of credit, a cash-out refinance results in a single monthly payment rather than two. It can be a strategic move if current market interest rates are lower than the rate on the original mortgage. However, it requires paying new closing costs on the entire value of the home, which are often higher than the fees associated with a simple line of credit. It is best suited for those looking to access a very large sum of money while potentially improving their overall mortgage terms.

Recommended:HELOC vs. Home Equity Loan

The Takeaway

Using the Michigan HELOC calculator empowers homeowners to make smarter decisions about tapping into their home equity. By previewing monthly payments and comparing repayment scenarios, you can confidently plan renovations, consolidate debt, or manage future borrowing.

SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.



Unlock your home’s value with a home equity line of credit from SoFi, brokered through Spring EQ.


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FAQ

What is the difference between a HELOC and a home equity loan?

A HELOC is a revolving credit line that lets you draw and repay funds as needed, usually with a variable rate. In contrast, a home equity loan provides a lump-sum disbursement with a fixed interest rate and fixed monthly payments. While both use your home as collateral, the credit line offers more flexibility for ongoing expenses, whereas the loan provides predictability for one-time costs.

What can I use the money for from a HELOC?

You can use the funds for almost any purpose, including renovations, debt consolidation, or education costs. Many homeowners use it for value-adding projects like remodeling. However, it is recommended to use the funds for expenses that offer a long-term return, as your home serves as collateral.

Is a HELOC interest rate fixed or variable?

Most of these financing instruments feature a variable interest rate. This means your monthly payments can change over time. Some lenders may offer a fixed-rate option where you can lock in a portion of your balance for added stability. Always check for periodic and lifetime rate caps to understand how high your interest rate could potentially go.

What happens when the draw period ends?

When the draw period ends, you can no longer withdraw funds from the credit line. The instrument enters the repayment period, and your monthly payments will increase because they now include both principal and interest. This phase typically lasts 10 to 20 years.

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