What Is a HELOC Repayment Calculator?

The HELOC repayment calculator shows the monthly payment amount and total cost of borrowing based on information supplied by the borrower. You’ll be asked to supply the HELOC amount, plus your interest rate and term.

What Is a HELOC?

A HELOC, short for home equity line of credit, is a financial product offered by lenders who provide different types of mortgage loans. It uses your home equity to secure a line of credit against the value of your home. The lender will look at your home’s value, your existing mortgage loan, and your personal qualifications (like income and debt) to determine what the limit of the HELOC would be.

After you close on the HELOC, you can use it when you need it. Lenders typically provide a credit card, checks, or both to help you use the line of credit. When you repay it, you gain access to the credit limit again. It’s great for projects or uses where flexibility is key.

How to Use the HELOC Repayment Calculator

Using the HELOC repayment calculator is similar to using a home affordability calculator. It takes a few inputs from you and shows the resulting payment and interest costs. Here’s what you need to best use it.

Input how much you owe on your HELOC. You can find this number on your statement or online account.

Select a HELOC repayment period. It defaults to 10 years, but you can change it to another time period. If you want to pay off what you owe sooner, this is the field you’ll want to change to see how shortening the payment term raises your monthly payment and how much interest you’ll save.

Estimate APR. Change the annual percentage rate (APR) default to what you’re seeing lenders offer based on the current interest rates available. You’ll see how different APRs change what you’ll pay.

Note the payment frequency. This calculator assumes you will make payments monthly.

You’ll be able to see how changing some of these inputs can make a big difference in paying off your HELOC.

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Why Calculate Payments with a HELOC Repayment Calculator

Just as with a mortgage calculator, calculating payments with a HELOC repayment calculator can help you understand what the costs and payments are. With more knowledge, you can make better decisions with your finances. It can also help in the following ways:

See if the monthly payment is affordable. When you’re looking at having a line of credit, you’ll want to know what the monthly payment would be. Your lender will determine if it is willing to lend out the amount you’re looking for based in part on whether you’re able to make that monthly payment.

Understand the total costs. You should be keenly aware of how much you’ll pay, especially when it comes to the interest costs over time. Even with the low interest rate that a HELOC can offer, you’ll pay a significant amount of interest.

Reduce the amount of interest you owe. Using a HELOC repayment calculator helps you see the full picture of what you’re paying to borrow money. These amounts might scare you, but it could also help light a fire that helps you pay it off faster and pay less in interest.

Pay off your HELOC faster. You can change the term to see how paying off debt faster will affect your monthly payments and the amount of interest you pay.

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Benefits of Using a HELOC Repayment Calculator

The benefits of using a HELOC repayment calculator are straightforward: You’re able to see the full picture and understand the costs involved.

Of course, these are just estimates and you’ll want to talk to a lender when you get serious about a HELOC, but the lender can give you a good idea of what you may get.

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Benefits of a HELOC

When you’re getting a HELOC, there are a number of benefits this type of financing offers.

•   Borrowing large amounts. Because your home is collateral on the line of credit, you may be able to access quite a lot of money. This is helpful if you need access to more cash, such as when you are doing a major renovation.

•   Lower interest rate. HELOCs offer some of the lowest financing costs you can get. It’s typically much less expensive than a personal loan or a credit card.

•   Flexible distribution of funds. HELOCs are a credit line. During the draw period (typically 10 years), you’re able to borrow up to your limit and pay it back or just pay interest. If you pay off what you borrow during the draw period, you can borrow against the credit line again. This is especially useful if you don’t know how much you are going to spend on a project, such as a home renovation (after all, the cost of living by state can vary widely).

•   Repayment terms may be flexible. Once the draw period ends, you’re left with a repayment period of, say, 10 or 20 years. You can use the HELOC repayment calculator to see what your monthly payments would be based on your interest rate and repayment period.

HELOC Requirements

Qualifying for a HELOC is similar to qualifying for a home mortgage loan or a mortgage refinance. You’ll need to be approved for the line of credit. Here’s what lenders are looking for:

•   Home equity. Since the combined loan-to-value (CLTV) ratio max is around 80% to 85%, you’ll usually need at least 15% equity in your home to get a HELOC.

•   Low debt. Your debt-to-income (DTI) ratio needs to be low enough so that you’re able to take on the payment that the HELOC brings.

•   Proof of income. You need a reliable source of income to be able to qualify for the monthly debt payment.

•   Good credit. A good credit score not only helps you qualify, but also to qualify for the best rates.

HELOC Process

When it comes to getting a HELOC, you’ll want to arm yourself with as much knowledge as you can. These steps can help.

1.    Estimate the maximum credit line amount. You do this by multiplying the market value of your home by 80% (.80). For example, if your home is worth $500,000, multiplying it by .80 will give you $400,000. This is an estimate for the maximum amount the lender will loan you with the home as collateral.

2.    Find the difference. Subtract the amount of your current mortgage from the calculation above (80% of the market value). If you owe $300,000 on an existing mortgage and the max credit line amount is $400,000, you have $100,000 left for a HELOC. If this amount seems close to what you want, you could start talking to a lender.

3.    Shop around for a lender. Submit your information to multiple lenders and see what terms they can offer you. Pay attention to origination fees, APR, term, and other requirements (like how the appraisal is conducted). These can vary from lender to lender. Shopping around for a lender within a 45-day window only counts as a single inquiry on your credit report, so talk to as many lenders as you can handle. (That’s just one of the helpful tips to qualify for a mortgage you can find in a home loan help center.)

4.    Apply for a HELOC. During the shopping and mortgage preapproval process, you may have already submitted your information to multiple lenders and prequalified for a HELOC. A full application will complete that process by verifying the information you supplied the lender.

5.    Get your property evaluated. Since the credit line is based on the property’s value, the lender will want to find that number in one way or another. They’ll either schedule an appraisal or see if your property qualifies for an automated valuation model (AVM) appraisal.

6.    Go through underwriting and close. Your underwriter will evaluate your financials and make a final lending decision. You may be asked for additional documentation or explanation about your application. Fulfill these requests as soon as you can. Once the lender gives the go-ahead for your HELOC, you can close and start using it.

HELOC Example

If your home is worth $500,000, and you have a $300,000 mortgage, you may be able to get up to $100,000 in funds. Here how the math works out:

Multiply the market value of the home by 80% ($500,000 x .80) = $400,000. $400,000 is the maximum combined loan-to-value ratio, or how much you can borrow against your house.

With the existing mortgage at $300,000, that potentially leaves $100,000 for the HELOC. A $100,000 HELOC with a 9.00% APR and 10-year repayment period results in a payment of $1,266.76. This is the repayment amount, not the amount you’ll pay during the draw period. You do have to qualify for the repayment amount to be able to gain access to the $100,000 HELOC.

Tips on HELOCs

HELOCs need to be managed with care. Although the default rate is low on HELOCs, it is still possible to get behind on bills and lose your home by taking on too much debt.

Pay attention to your repayment period. The longer the repayment period, the more you’ll pay in interest, even if you score a great interest rate. A 20-year HELOC has a much more attractive monthly payment, but it will cost much more than a 10-year repayment plan.

Make sure you can afford the full repayment amount. During the draw period, you’ll likely be paying interest only. This is a much lower payment than the one you’ll be making during the repayment period. It can come as a shock when you need to pay a significant amount more every month when you go from the draw period to the repayment period. (Even better, try to pay it off as soon as you can.)

Select a shorter repayment period if you want to save money. A shorter repayment period helps you pay off the balance faster and costs much less than a HELOC with a longer repayment term.

Select a longer repayment period if you want the lowest monthly payment. Even though you’ll pay more in the end, a longer repayment period creates a smaller monthly payment. If you’re selling the house and planning to pay off the HELOC from proceeds of the sale, this option might make sense.

The Takeaway

HELOCs can be a powerful financing tool. However, they need to be planned for and used carefully. Your house is at risk if you cannot make the payments on a HELOC, so be sure you can afford the monthly payment, even in a worst-case scenario.

To give yourself a head start, calculating approximately how much your payment will be and what the costs of borrowing money are can help you manage the HELOC to your advantage.

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 brokered by SoFi.

FAQ

How do I calculate my HELOC payment?

The easiest way to calculate a HELOC payment is to use a HELOC repayment calculator. Submit your amount, interest rate, and term to see what your monthly payment would be and how much interest you would pay throughout the life of the HELOC.

What is the monthly payment on a $100,000 home equity line of credit?

The monthly payment on a $100,000 HELOC with a 9.00% interest rate and a 10-year repayment period would be $1,266.76. This assumes you’re in the repayment period, with principal and interest included in the monthly payment.

What is the monthly payment on a $75,000 HELOC?

The monthly payment on a $75,000 HELOC with a 9.00% interest rate and a 10-year repayment period is $950.07. This assumes you’re in the repayment period, with principal and interest included in the monthly payment.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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What Is a HELOC Interest-Only Calculator?

An interest-only HELOC calculator allows you to estimate the cost of paying interest on your HELOC during the time where you’re paying only interest (and no principal) — the so-called “draw period”. You’ll also be able to see what your monthly payments will be after the draw period, when you’re paying both principal and interest.

What Is a HELOC?

A HELOC is a financial product that allows you access to a line of credit based on the equity you’ve built in your home over time. HELOCs are often available at relatively low interest rates. Assuming you have adequate income to handle making both a mortgage payment and a HELOC payment, you can have both a HELOC and a home mortgage loan.

How to Use the HELOC Interest-Only Calculator

This HELOC calculator allows you to gain a deeper insight into the overall cost of your credit line. To use it, simply enter the amount of your HELOC that you have used thus far, as well as the HELOC’s term in years, and the HELOC’s interest rate expressed as an APR. The calculator assumes you will make payments monthly.

Using the information you provide, the calculator will estimate your monthly interest-only payment.

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Why Calculate Monthly Payments with a HELOC Interest-Only Calculator?

Some HELOCs allow you to pay only interest during the draw period, with payments against the principal kicking in later during the repayment period. This arrangement can allow borrowers access to cash at a low cost up-front, but can result in much larger payments composed of both principal and interest due further down the line.

This calculator will help you see how much your interest-only payment amounts to. If you were a first-time homebuyer when you purchased your home and you’ve never had a HELOC before, this can be especially helpful.

However, it’s important to understand that your payment amount may increase substantially during the HELOC’s repayment period. Furthermore, many HELOCs come with a variable interest rate, which means your rate — and therefore payments — may change over time.

Benefits of Using a HELOC Interest-Only Calculator

A HELOC interest-only calculator helps you see how much your interest-only payments will cost each month, which can help you figure out whether or not you can afford to take out a HELOC (much the way a mortgage calculator or a home affordability calculator can help you determine your budget for buying a home).

If you already have a HELOC, the calculator can help you determine how much you can comfortably afford to draw on your credit line before the interest costs become challenging for your budget.

Benefits of a HELOC

Along with offering borrowers access to cash at a relatively low cost, HELOCs are commonly used to fund home renovations or improvements — through 2025, interest paid on funds borrowed from a HELOC for these purposes are tax-deductible.

When repaid diligently, a HELOC may also help boost your credit score over time. And unlike many other forms of borrowing against home equity, with a HELOC, you only take out what you need too — which may help you avoid over-borrowing (and therefore paying more interest than necessary).

HELOC Requirements

To qualify for a HELOC, you must own a home and have built up equity in it — which is to say, you must own some portion of your home’s value. For instance, if your house is worth $300,000 and you still owe $200,000 toward your mortgage principal, you probably have about $100,000 in equity (though you’ll want to check your mortgage’s specific amortization schedule for full details).

Additionally, when you take out a HELOC, the lender will review your credit score, cash flow, employment history, and other such financial factors that are usually part of a lending decision. (The process is similar to qualifying for a mortgage.) Most lenders will allow you to borrow up to 85% of what your home is worth, minus whatever you still owe on it.

HELOC Process

You can begin the HELOC process with most lenders these days online. You’ll answer questions about both your financial standing and the property or properties you own (and whose equity you’re hoping to borrow against). Once you fill out the online application, you’ll be contacted by a representative of the company, who will walk you through the remaining steps in the preapproval process. This may involve a physical inspection or appraisal of your property — it’s a lot like the underwriting process for most types of mortgage loans.

Once your lender has fully approved your application and offered their terms, you’ll decide whether or not to accept the HELOC — and if so, sign the appropriate documentation. You’ll then have access to draw from the HELOC during the draw period, which is usually about 10 years long. The repayment period comes afterward, and may be up to 20 years.

HELOC Example

Say your home is worth $500,000, and you own $300,000 worth of its equity. You choose to take out $150,000 against its value in a HELOC. Over the course of the HELOC, you’ll pay back not only whatever portion of that $150,000 credit line you use, but also whatever interest is accrued over the draw and repayment periods. Keep in mind that if you opt for an interest-only draw period, your payments during the repayment period will likely be substantially larger.

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Tips on HELOCs

In order to successfully apply for a HELOC, be sure you’re in good financial standing. If you have high levels of outstanding debt or a poor credit score, you may not qualify for a HELOC, or you may qualify only for an expensive high interest rate. The process of applying for a HELOC is similar to applying for a mortgage or a mortgage refinance.

Additionally, consider the purpose of the HELOC. While some projects, like home improvement, may be worth going into debt for, taking out a HELOC to fund a wedding or vacation might not make financial sense in the long run. A HELOC isn’t the only solution if you need to borrow against your home and a home loan help center can help you explore your options.

The Takeaway

A HELOC can be a relatively low-cost way for homeowners to access the equity they’ve worked hard to build in the form of cold, hard cash. But in order to understand how much you might need to pay each month in interest, it helps to use a HELOC interest-only calculator.

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 brokered by SoFi.

FAQ

How do you calculate an interest-only payment on a HELOC?

Given how complex interest calculations can be, the best way to calculate an interest-only HELOC payment is to utilize an interest-only HELOC calculator, which will do the math for you.

Is it better to pay interest only on a HELOC?

Not necessarily. While interest-only payments may make money from a HELOC more accessible in the short term (since payments will be lower), it’s important to understand that, later on during the repayment period, those payments will dramatically increase. To lower your overall HELOC cost, consider paying principal throughout the HELOC’s lifetime.

How do you calculate an interest-only payment?

Interest-only payment calculations depend on amortization. Your lender could provide you with a full amortization schedule, but an interest-only calculator can quickly give you a good estimate.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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