What Is a HELOC Monthly Payment Calculator?

A HELOC monthly payment calculator is a tool that potential borrowers can use to determine how much you might need to budget each month when it comes time to repay your home equity line of credit. If you’ve ever used a mortgage calculator or a mortgage calculator with taxes and insurance, you know how useful computing payments can be.

The calculator will help you gain a general understanding of the cost of a HELOC, but keep in mind that HELOCs are a revolving line of credit: If you use some of your line of credit but not all of it, or repay some of what you borrowed during the HELOC’s draw period, the amount you owe each month can change. HELOC interest rates are often variable as well, meaning they will change over time.

Recommended: Home Affordability Calculator

How to Use the HELOC Monthly Payment Calculator

Using our monthly HELOC payment calculator is easy. To begin, you’ll enter your:

•   Existing HELOC balance

•   Repayment term

•   Annual percentage rate (APR) offered to you on the HELOC

This calculator assumes you will make monthly payments on your HELOC.

Why Calculate Monthly Payments With a HELOC Calculator?

Calculating monthly payments for your HELOC is important because it can help you understand how much you’ll owe every month if you tap into your home’s equity by using a credit line to borrow money. Once you see the monthly payment estimate, you can review your budget and determine if you can afford to take on this new debt.

If you’re not confident you’ll be able to make each monthly payment, a home equity line of credit might not be right for you. After all, HELOCs are secured by your property. If you fall behind on payments, the lender can foreclose on your home.

Benefits of Using a HELOC Monthly Payment Calculator

There are several benefits of using a HELOC monthly payment calculator, including:

•   Understanding how interest rates impact borrowing money: Having access to cash when you need it — for renovations, debt consolidation, and emergency expenses — sounds nice. But once you see how much the interest rate can affect the cost of borrowing, you might think twice before taking out a HELOC if you’re not able to handle the repayment.

•   Setting budget expectations: Thinking several years into the future can be tough, but it’s crucial that you do that when taking out a HELOC. Seeing what monthly payments will be for the 10 or 20 years can help you build your budget and make sure you have enough flexibility in your spending to afford the repayments.

Recommended: Home Loan Help Center

HELOC Requirements

Just because you want a HELOC and think you can afford one doesn’t mean a lender will necessarily give you one. There are generally a few HELOC requirements that you must meet to qualify, including:

•   Enough home equity: First and foremost, you need to have built up enough equity in your home, because that’s what you’re borrowing against. At a minimum, lenders may want to see 15% equity, and many prefer 20%.

•   Strong credit: Though it can vary by lender, you’ll need at least a credit score of 680, if not 700, to get a HELOC. Have a score below 680? It’s not impossible to get a HELOC, though your choice of lenders may be more limited, and interest rates may be higher. Being on time with payments on your current mortgage is one good way to care for your credit score.

•   A low debt-to-income ratio: Having strong credit is not enough. Lenders also want to see that you’ll be able to afford payments. That means you need to make significantly more money than you owe to outstanding debts (like a mortgage, car loan, or student loan). The lower your debt-to-income (DTI) ratio, the more qualified you are as a borrower.

HELOC Process

The process of applying for a HELOC is straightforward and akin to applying to one of the many different types of mortgage loans:

1.    Shop around: Look for various lenders offering home equity lines of credit. Research their credit score requirements, as well as their interest rates and terms.

2.    Apply: After you’ve selected your preferred lender, apply online or in person. If you went through a mortgage preapproval process, you’ll find this process is similar. You will likely need a home appraisal, and the lender will review your income, assets, and credit score.

3.    Accept the offer: HELOCs take one to two months for approval. Once you’re approved, you can review the offer from the lender and begin drawing funds if you accept it.

HELOC Example

In general, with a home equity line of credit, you can borrow up to 80% of the equity you’ve built in your home (though this can vary). Let’s see how that breaks down with an example:

•   Home value: $500,000

•   Amount still owed on the house: $200,000

•   Equity built: $300,000

Assuming you are approved for 80% of your equity, your line of credit can be as large as $240,000. Of course, you might not need to use the maximum credit line. HELOCs can be especially helpful in situations, such as a home renovation, when you aren’t sure exactly what a project will cost (it can be hard to get a precise estimate as the cost of living differs by state).

Tips on HELOCs

Thinking about getting a HELOC? Here are some tips for getting approved and managing your line of credit responsibly. Many are the same tips to qualify for a mortgage you may have followed when you purchased your home:

•   Shop around for lenders: Don’t go with the first lender you find. Compare rates, terms, and customer reviews.

•   Improve your credit before applying: Pay down debts as much as possible to reduce your DTI, and make on-time payments and reduce your credit utilization to boost your credit score. This will help your chances of approval — and at a lower rate.

•   Use a monthly HELOC payment calculator: Before accepting a HELOC offer, use our calculator to determine what your monthly payments will look like during the credit line’s repayment period. Review your budget to make sure you’ll be able to afford the repayments. Remember that during the HELOC’s “draw” period which is typically 5 or 10 years, you can borrow against the line of credit and pay only interest. But during the repayment period, your payments will get larger.

•   Don’t overdraw: Only use your home equity line of credit for necessary expenses. Just because you have money available to borrow does not mean you have to borrow it all.

•   Read the fine print: Make sure you understand how your repayments work, as well as potential fees, such as early cancellation penalties. Remember that if you decide a HELOC isn’t for you, there are other ways to access cash based on your home equity, including a mortgage refinance that could free up cash.

The Takeaway

A HELOC can be a great way to tap into your home’s equity to fund renovations, pay down higher-interest debt, or cover unexpected expenses that life throws at you. However, it’s important to understand what you’re getting into by using a monthly HELOC payment calculator before applying.

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

What is the monthly payment on a $50,000 HELOC?

The monthly payment on a $50,000 HELOC depends on the interest rate and the term. For instance, if the interest rate is 7.00% and the repayment term is 20 years, the monthly payment would be $387. (This assumes a draw period of 10 years during which you make only interest payments on what you have borrowed.) A HELOC monthly payment calculator can help you do the math.

How do you calculate the HELOC payment monthly?

To calculate your HELOC’s monthly payment, you can use a monthly HELOC payment calculator. You’ll need to know the amount borrowed, the interest rate, and the repayment term.

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

The monthly payment on a $100,000 HELOC depends on the interest rate and the term. For instance, if the interest rate is 5.00% and the term is 30 years, the monthly payment would be $537. (This assumes a draw period of 10 years during which you make only interest payments on what you have borrowed.) However, this amount can change if you have a variable interest rate.

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.

SOHL-Q224-1915669-V1

What is an FHA Mortgage Loan Calculator?

When considering applying for an FHA loan, prospective homeowners may use an FHA mortgage loan calculator to estimate their monthly mortgage payments. FHA loans are popular because they have lenient down payment requirements and accommodating credit requirements in comparison to other types of home mortgage loans. The calculator accounts for a number of variables, including the loan amount, interest rate, term of the loan, and the mortgage insurance premium (MIP) that FHA borrowers must pay.

The calculator is a crucial tool for planning, budgeting, and understanding the long-term financial obligations associated with obtaining an FHA mortgage. Whether one is wanting to refinance or just starting a house hunt, a loan calculator offers useful information to support making wise financial decisions.

How to Use the FHA Mortgage Loan Calculator

It’s simple to use an FHA mortgage loan calculator. Prospective applicants need to gather some details regarding the home mortgage loan and property being considered before starting. First, the total amount one intends to borrow as the loan amount will be required. Next, the loan’s interest rate — homebuyers can put in various rates to see how different scenarios would affect their payments. The loan term, typically 15 or 30 years, must also be specified.

The calculator will produce an estimate of the monthly payment after all the required data has been entered, breaking down the principle, interest, and mortgage insurance premium components.

One can utilize the FHA mortgage loan calculator to explore numerous situations and find a mortgage plan that meets their budget and financial objectives by experimenting with different loan amounts, interest rates, and loan terms.

Recommended: The Most Affordable States in the U.S.

Why Calculate Mortgage Payments with an FHA Mortgage Loan Calculator

To get a comprehensive picture of one’s financial obligations, potential homebuyers can calculate their mortgage payments using an FHA mortgage loan calculator. With the consideration of important variables including loan amount, interest rate, and term, this tool helps homebuyers figure out what they can afford and how to budget their finances. Unlike a typical mortgage calculator, an FHA mortgage calculator also factors in the monthly mortgage insurance premium (MIP) that is required on all FHA loans. (There is also an upfront MIP that new borrowers pay when the loan begins. Right now, upfront MIP is 1.75% of the base loan amount for all borrowers.)

By using an FHA loan calculator, one can analyze various loan possibilities, create a more effective budget, and decide on a home purchase or refinance plan. It helps ensure a more seamless and secure route toward homeownership.

Benefits of Using an FHA Mortgage Loan Calculator

For both current homeowners and potential first-time homebuyers, using an FHA mortgage loan calculator has many advantages. It offers an approximation of monthly mortgage installments, encompassing principal, interest, and the mortgage insurance premium (MIP), which is required for all FHA loans. The calculator also helps evaluate several loan scenarios by changing parameters like loan amount, interest rate, and loan length. Remember that you will still need to pay property taxes and home insurance — and maybe also homeowner’s association fees — in addition to the payments shown by the calculator, so you’ll need to factor these into your household budget.

What is an FHA Loan?

The Federal Housing Administration (FHA), a government organization created to promote homeownership by offering reasonably priced mortgage options, insures certain types of mortgages, including FHA loans. First-time homebuyers and those with less-than-perfect credit are particularly fond of FHA loans because of their lower down payment requirements, which can be as low as 3.5% of the home’s purchase price.

FHA loans have more lenient credit score standards, opening up homeownership to a wider range of people. These loans have competitive interest rates and are offered by lenders who have been approved by the FHA. However, in order to safeguard the lender in the event of a default, borrowers must pay mortgage insurance premiums (MIP), which average .55% of the principal remaining on the loan each year, divided into monthly installments.

Pros and Cons of an FHA Loan

FHA loans provide a number of benefits and drawbacks that prospective borrowers should take into account. On the plus side, FHA loans are known for having smaller down payments — typically as little as 3.5% — which increases accessibility to homeownership, particularly for individuals who are first-time buyers or have limited resources.

They are a possibility for people with less-than-perfect credit because they also have more relaxed credit score restrictions. FHA loans frequently have competitive interest rates and permit bigger debt-to-income ratios, giving borrowers more financial planning freedom.

However, there are a few disadvantages to take into account. The obligation to pay mortgage insurance payments, both upfront and yearly, is a major drawback that can raise the total cost of the loan. If the down payment is less than 10%, the yearly MIP is charged annually for the duration of the loan, and the upfront MIP may represent a significant additional cost.

Also, the credit limits associated with FHA loans might not be enough to buy a home in a market where prices are higher. Lastly, the property must fulfill requirements set forth by the FHA, which may restrict the selection of houses accessible to purchasers utilizing this kind of financing.

Understanding these pros and cons is crucial for making an informed decision about whether an FHA loan is the right choice for one’s home financing needs.

FHA Loan Requirements

The FHA has set a number of requirements that borrowers must fulfill in order to be eligible for an FHA loan. To qualify for a 3.5% down payment, individuals must have a minimum credit score of 580; those with a score between 500 and 579 must make a 10% down payment. In order to prove they can repay the loan, borrowers must also provide documentation of their consistent employment history and income.

TThe principal residence of the borrower must be the property being financed, and it must also adhere to certain safety and habitability requirements established by the FHA. Mortgage insurance premiums must be paid by borrowers both upfront and yearly. Additionally, the loan amount must not exceed the FHA’s local limitations, which change depending on the cost of living in a given area. A borrower’s debt-to-income (DTI) ratio cannot be higher than 43%, though there may be some exclusions.

FHA Mortgage Loan Process

Prequalification is the first of several steps in the FHA mortgage application process, where borrowers submit basic financial data to discover their eligibility and possible loan amount. Subsequently, applicants apply for preapproval by completing a mortgage application and attaching supporting papers, including asset statements, credit reports, and proof of income. Borrowers who have been preapproved can begin looking for a home and submit offers, subject to FHA approval.

Following acceptance of the offer, a formal application is filed, and the loan proceeds to underwriting, where the lender examines all supporting documentation and has the property appraised by the FHA to make sure it satisfies the requirements. The borrower signs the relevant documents, pays the closing expenses, and gets access to their new house at closing, if the loan is granted. A seamless transaction during this procedure depends on timely submission of the necessary paperwork and open lines of communication with the lender.

How Does a Down Payment Work?

A down payment is the first, upfront payment a buyer makes to secure a property; it is calculated as a percentage of the overall cost of the home purchase. As noted above, for FHA loans, the minimum down payment is normally 10% for applicants with credit scores below 580 and 3.5% of the purchase price of the property for those with scores above 580. This payment decreases the buyer’s required loan amount, lessens the lender’s risk, and shows the buyer’s commitment to the deal, among other benefits.

Along with other closing fees, the down payment is paid at closing and may be funded by the buyer’s savings, family donations, or other authorized sources. A larger down payment can result in lower monthly mortgage payments, reduced interest costs over the life of the loan, and possibly more favorable loan terms. Consulting a home loan help center can help you answer all your questions about down payments and more.

How to Lower a Mortgage Down Payment

There are a number of ways to lower the down payment on a mortgage, particularly when using FHA financing. Using the 3.5% FHA down payment requirement — which applies to borrowers with credit scores of at least 580 — is one of the main strategies. Additionally, subsidies from down payment assistance programs provided by nonprofits or state and municipal governments, as well as cash gifts from family members, are available to borrowers.

Many workplaces provide programs for homebuyers that might aid with down payment expenses. Maintaining a solid job history and high credit score might also help a buyer qualify for options with smaller down payments. It’s a good idea to read up on tips to help qualify for a mortgage before starting the application process.

Recommended: Mortgage Calculator With Taxes and Insurance

Average Mortgage Down Payment in 2024

In the first quarter of 2024, the U.S. average down payment was 13.6%, per a recent Realtor.com^® survey. The median down payment amount was $26,000. Remember, though, that these figures take into account buyers with commercial mortgages as well as FHA borrowers, whose down payments are typically on the lower side.

Tips on Mortgage Down Payments

To maximize one’s financial plan, here are a few pointers. First, determine the target property price and the minimum down payment needed for the loan type to establish a clear savings goal. Investigate alternatives for loans, including FHA loans, which have less stringent down payment requirements.

Maintaining a high credit score might also help with getting better loan conditions and lower requirements for a down payment. To speed up savings and make sure one has enough money when they find the ideal house, cutting back on wasteful spending and establishing a strict budget ahead of time can help.

The Takeaway

An FHA mortgage loan calculator is an essential tool for understanding your potential mortgage payments and making informed financial decisions. By considering both the benefits and drawbacks of an FHA loan, you can better navigate the homebuying process and choose a mortgage that aligns with your financial goals and circumstances.

SoFi offers a wide range of FHA loan options that are easier to qualify for and may have a lower interest rate than a conventional mortgage. You can put down as little as 3.5%, making an FHA loan a great option for first-time homebuyers.

FAQ

How much do I need to make to buy a $300K house with FHA loan?

An annual income of at least $75,000 would likely be required to purchase a $300,000 home with an FHA loan, depending on your down payment, and current interest rates. If you have significant other debts such as a car payment, a student loan payment, or both, you will likely need to earn more.

How much of an FHA loan do I qualify for?

The amount of FHA loan you qualify for depends on factors such as your income, credit score, debt-to-income ratio, and the loan limits in your area.

What is the downside to an FHA loan?

One drawback associated with FHA loans is the obligation to pay mortgage insurance premiums (MIP), which can raise the loan’s total cost both upfront and on an annual basis.

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.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.