Free Texas HELOC Loan Payment Calculator
Texas HELOC Calculator
By SoFi Editors | Updated January 29, 2026
Texas homeowners who have built up a nice amount of equity in their home may find it useful to use a Texas HELOC calculator to explore the costs of borrowing with a home equity line of credit (HELOC). A HELOC can convert accumulated equity value into a flexible financial resource.
But it’s important to be prepared for the two phases of a HELOC, draw and repayment. This guide will help you use the calculator for best results, and along the way it will ensure that you understand what is a home equity line of credit and how it works before you start borrowing.
- Key Points
- • A home equity line of credit is a revolving credit line, allowing borrowers to withdraw, repay, and re-access funds as needed during a specified timeframe.
- • Texas borrowers can typically access up to 90% of their equity with a HELOC.
- • A HELOC payment calculator can show you estimates of monthly payments during the first and second phases of a HELOC.
- • During the initial phase, many lenders allow for monthly payments that cover only the interest costs associated with the amount actually withdrawn.
- • This financing product is secured by the borrower’s home, meaning the property is subject to foreclosure in the event of default.
Calculator Definitions
• HELOC Balance: If you’re thinking about borrowing with a HELOC, the balance is the amount you think you would like to borrow. If you already have a HELOC, the balance is the amount of your credit line you have used.
• Current Interest Rate: A HELOC lender charges borrowers interest, expressed as a percentage of the borrowed amount. If you have a HELOC, your current rate can be found in your account statement. If you are thinking about getting a HELOC, it’s a good idea to obtain rates from multiple lenders.
• Draw Period: The draw period is the initial timeframe, commonly five to 10 years, during which the borrower can access funds up to their established credit limit. In this stage, the monthly payment is often limited to the interest costs and no repayment of the principal is required.
• Repayment Period: This phase begins once the draw period concludes. HELOC users will stop borrowing funds and begin making regular payments that cover both principal and interest.
• Monthly Interest Payment: This is the amount due each month during the draw period.
• Monthly Principal and Interest Payment: During the repayment period, the principal and interest will both be included in the homeowner’s monthly payments.
How to Use the Texas HELOC Calculator
Using a free HELOC calculator is easy. Follow these steps for best results:
Step 1: Enter Your Planned or Actual HELOC Balance
Record the amount you have withdrawn from your HELOC or the total amount of the credit line you intend to utilize, keeping in mind you may not need to use the full credit line.
Step 2: Estimate Your Interest Rate
Identify the rate currently associated with the HELOC, or use a projected rate if you are interested in how costs may change as the HELOC’s rate adjusts.
Step 3: Choose the Length of the Draw Period
Input the number of years you want to have access to the credit line (10 years is standard). The repayment phase begins when the draw period ends.
Step 4: Select Your Repayment Period
Select the number of years you would like to have to pay back the principal, which could be up to 20 years. A longer timeframe will result in lower monthly payments but will likely increase the total interest costs over the life of the HELOC.
Step 5: Review Your Results
Carefully analyze the payment estimates for both the draw and repayment phases. This allows you to determine if the projected monthly obligations align with your household budget and larger financial objectives.
What Is a Home Equity Line of Credit?
If experimenting with the calculator piques your interest in a HELOC it’s a good idea to take a step back to make sure you fully understand what a HELOC is before diving into the application process.
HELOCs have two phases. The draw phase, as noted above, can be up to 10 years and during this time you likely won’t have to repay any of what you borrow — you can just pay interest. A HELOC interest-only calculator can show you what you might owe, or just use this HELOC calculator which will estimate monthly payments at both phases.
The second HELOC stage is the repayment period, which usually lasts for 10 or 20 years. Once this phase starts, the line of credit is closed to further withdrawals, and the borrower must begin paying down the principal along with interest. HELOCs have variable interest rates, so you can expect your rate to change periodically. It might rise or fall. A HELOC repayment calculator can show you what monthly payments would be at various rates at this stage.
It’s important to understand that a HELOC is technically a second mortgage (assuming you haven’t finished paying off your first home loan). Because your property is at stake if you fail to make payments on the HELOC, borrowing in this way requires a disciplined approach to use and repayment of the credit line.
Lenders look at your credit history when they decide whether or not to qualify you for a HELOC. In addition to having 15% equity in your home, you’ll need a credit score of at least 640. Some lenders prefer 680.
Recommended: Different Types of Home Equity Loans
Home Equity Trends in Texas
If you’re thinking about how to get equity out of your home in Texas, you are likely not alone. The average Texas homeowner has seen moderately strong equity growth over the past five years and is now sitting on more than $63,000 in equity. If a lender allowed borrowing at 90% of this equity, the average homeowner could have a credit line of $56,000. This equity growth is part of a larger national trend, as shown in the graphic.
Current HELOC rates by state.
Compare current home interest rates by state and find a HELOC rate that suits your financial goals.
Select a state to view current rates:
How to Use HELOC Calculator Data to Your Advantage
Employing the data from a Texas HELOC calculator involves more than simply asking yourself, “Can I afford these monthly payments?” There are other ways to use the data:
You can create “what-if” scenarios: Homeowners considering a HELOC can input different HELOC balances, interest rates, or repayment terms to see how each of these things will affect their monthly payment. This lets you see what a high or low monthly payment would be based on different interest rates. This is useful given that HELOC interest rates can shift over time.
You can consider debt-consolidation strategies: If you’re carrying balances on high-interest credit cards, you can add up the monthly payment amounts on your cards and compare that to the monthly payment you would have if you used a HELOC to pay off all that you owe at once. There’s a good chance your monthly payment with a HELOC would be lower than the sum of what you’re currently paying. And it would be one payment instead of multiple payments.
You can get motivated to make extra payments: Thinking about how payments will increase during the repayment phase can help prompt borrowers to pay down some of their HELOC balance during the draw phase so that they enter repayment with a smaller amount due.
Tips on HELOCs
As you’ve probably deduced by now, having a HELOC is a little more complicated than getting a personal loan or using a credit card. But used with care, it can be a very cost-efficient way to borrow large sums. Smart HELOC users know these expert tips:
• Cultivate good credit. As noted above, you’ll need a score of at least 640 — and possibly 680 — to obtain a HELOC. But the lowest interest rates generally go to those with a score of 700 or better. To nudge your score in the right direction, make all payments on time. Avoid closing old credit accounts or opening new ones in the months before you apply for a HELOC. And don’t max out all your credit cards.
• Shop around. Compare interest rate offers and HELOC terms from multiple lenders to find your best offer. Look for a competitive interest rate and low fees, as well as a repayment term and monthly payments that fit your budget. (Use the free HELOC calculator to compute monthly payments for each rate.)
• Set some ground rules. Once you have a HELOC it can be tempting to use it to pay for every little thing, particularly since the monthly payments can be fairly low during the draw phase. But little charges do add up, and you can enter the repayment phase with a large monthly bill. Determine some limits for yourself so that you only use the HELOC for certain types of expenses, particularly if you’ve had trouble managing credit in the past.
Recommended: HELOC vs. Home Equity Loan
Alternatives to HELOCs
While a revolving line of credit offers significant flexibility, other financing may be more appropriate depending on whether a borrower requires a lump sum or prefers to avoid using their real estate as collateral. As you’re examining the options, start by understanding what is a home equity loan.
Home Equity Loan
Often confused with a HELOC, a home equity loan, like a HELOC, involves using your home as collateral. It is critically different in three ways: The funds are disbursed all at once, the interest rate is typically fixed, and repayment of both principal and interest begins immediately. This makes it a better choice for those who know the exact cost of a project upfront and prefer the stability of a fixed monthly payment amount. If you want to test the waters and see what payments might be like with this option, use a home equity loan calculator.
Home Improvement Loan
A home improvement loan is a type of personal loan and is typically unsecured. It provides a lump sum of cash. Unlike a HELOC, it features a fixed interest rate and a predictable schedule of equal monthly payments. In that way, it is more similar to a home equity loan. But because a home improvement loan is unsecured, the interest rate is generally higher than that of a HELOC or home equity loan.
Personal Line of Credit
A personal line of credit allows borrowers to access funds as needed, like a HELOC does, but without using the home as collateral. While opting for a personal line of credit protects the home from the risk of foreclosure, the interest rates are generally higher, and the credit limits are typically lower because the lender has no physical asset to secure the debt.
Cash-Out Refinance
A cash-out mortgage refinance involves replacing your existing primary mortgage with an entirely new, larger mortgage. You would receive the difference between the new mortgage and the old balance in cash. This is attractive, but a refinance is likely a smart move only if current market interest rates are lower than the rate on your original mortgage. A refi would also involve new closing costs, typically 2% to 5% of the loan amount.
As you consider a cash-out refinance vs. home equity line of credit, it’s important to realize that a refi consolidates your debt into a single monthly payment.
The Takeaway
A Texas HELOC calculator can allow residents sitting on a comfortable amount of home equity to enter the borrowing process with a clear understanding of their potential limits and future obligations. By illustrating the costs associated with the draw and repayment phases, calculators help homeowners anticipate the long-term impact of leveraging their property. If the costs seem manageable, the next step is to seek out prospective lenders and learn more about interest rates.
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.
FAQ
How much can I borrow with a HELOC?
The amount you can borrow depends on the equity in your home. Lenders may allow you to borrow up to 90% of your equity. (Your equity is your home’s estimated value minus your outstanding mortgage balance.) The final credit limit is also influenced by factors such as your credit score, income, and overall debt.
What can I use the money for from a HELOC?
Funds from a HELOC can be used for just about any purpose. Common uses include home renovations, debt consolidation, funding education, or covering major unexpected costs like medical bills. Some homeowners use HELOC funds to invest in a business, but this is a decision that requires careful consideration. Not all businesses ventures are profitable and if the investment doesn’t pay off and you can’t make your HELOC payments, you risk losing your home.
Is a HELOC interest rate fixed or variable?
Most HELOCs feature a variable rate that fluctuates based on a benchmark index like the prime rate. This means that your monthly borrowing costs can change over time as economic conditions shift. The HELOC agreement will spell out how often the rate can change and by how much.
Is the interest on a HELOC tax-deductible?
The costs associated with this financing may be tax-deductible if you itemize. Consult a tax professional for specific guidance as tax rules can change from year to year.
Learn more about home equity line of credits:
SoFi Loan Products 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.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
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.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
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.
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Free Tennessee HELOC Payment Calculator
Tennessee HELOC Calculator
By SoFi Editors | Updated January 23, 2026
A home equity line of credit (HELOC) can be a flexible way for Tennessee homeowners to tap into the equity they’ve built in their homes. A Tennessee HELOC calculator estimates monthly payments during both the draw period and repayment period. The calculator allows you to explore different borrowing scenarios and make more informed decisions about using your home equity responsibly.
Keep reading to learn exactly how to use the Tennessee HELOC calculator, home equity trends in Tennessee, and alternatives to explore.
- Key Points
- • A home equity line of credit provides a revolving credit limit based on the portion of the home value owned outright.
- • Lenders typically allow homeowners to access up to 90% of their equity, depending on creditworthiness and debt-to-income ratios.
- • The financing structure consists of an initial draw period, often lasting 10 years, followed by a structured repayment phase of up to 20 years.
- • Interest is typically charged only on the specific amount withdrawn from the credit line rather than the entire approved limit.
- • A HELOC calculator estimates monthly payments, allowing you to see if a HELOC fits within your budget before speaking with a lender.
Calculator Definitions
• HELOC Balance: This represents the specific amount of money a homeowner has currently withdrawn and spent from the available credit limit.
• Current Interest Rate: This is the variable percentage charged on the borrowed balance, which moves in response to broader economic shifts.
• Draw Period: This is the initial phase, typically 10 years, where funds are accessible and borrowers often make interest-only payments.
• Repayment Period: This is the subsequent phase, typically lasting 20 years, where the balance must be paid back with interest and the ability to withdraw funds ceases.
• Monthly Interest Payment: This is the cost of borrowing the current balance during the draw phase, excluding any payments toward the principal.
• Monthly Principal and Interest Payment: This is the combined amount required once the repayment phase begins, ensuring the debt is settled by the end of the term.
How to Use the Tennessee HELOC Calculator
The Tennessee HELOC calculator estimates monthly payments during the draw period and repayment period. Here’s a step-by-step guide on how to use it:
Step 1: Enter Your Planned or Actual HELOC Balance
The foundation of every projection starts with the current or projected balance. For those already utilizing a credit line, this represents the active debt accruing interest. For those in the planning stages, this input represents the anticipated cost of a project or need.
Step 2: Estimate Your Interest Rate
Enter the current rate provided by the lender or the current average of HELOCs. It’s also important to run models using rates that are two or three percentage points higher. This acts as a stress test for the household budget, since most HELOCs come with variable rates that may increase over time.
Step 3: Choose the Length of Your Draw Period
Defining the duration of the draw period helps in understanding the window of time available for accessing capital. This phase is usually 10 years, but some agreements may vary.
Step 4: Specify Your Repayment Period
The repayment period, often spanning 20 years, determines the pace at which the principal balance and interest must be retired. A longer term may lower the monthly requirement but will increase the total interest paid over the life of the product.
Step 5: Review Your Results
The final step involves a comprehensive analysis of the generated projections. A homeowner should evaluate the monthly principal and interest payment to ensure it remains manageable within their future budget.
What Is a Home Equity Line of Credit?
A home equity line of credit functions as a revolving credit tool that is secured by the homeowner’s primary residence. Equity is defined as the difference between the current market value of the property and the outstanding balance of any existing home loan or liens.
This product is distinct from lump-sum financing options, such as home equity loans, because it provides ongoing access to capital rather than a single payout. As the principal balance is paid down, the available credit is replenished, allowing the homeowner to use the funds repeatedly during the draw period.
The structure of this financing is divided into two distinct phases: the draw period and the repayment period.
• During the draw period, the borrower has the freedom to withdraw funds as needed, up to the approved limit. In many cases, the monthly requirement is restricted to interest-only payments, which can keep costs low while a project is underway. Use a HELOC interest-only calculator to see what payments would be based on your balance.
• Once the draw period concludes, the product enters the repayment phase. At this point, the ability to withdraw additional funds is terminated, and the borrower must begin paying back both the principal and the interest. This phase often lasts between 10 and 20 years. Because the payments now include principal, the monthly obligation can increase significantly. Use a HELOC repayment calculator to see what those payments might be.
What Is a HELOC Calculator?
A HELOC calculator is an online tool that helps homeowners estimate potential payments for a home equity line of credit based on factors like balance, interest rate, draw period, and repayment term. It provides a clearer picture of affordability and long-term borrowing costs before applying.
Recommended: How to Get Equity Out of Your Home
Home Equity Trends in Tennessee
The landscape of home equity in Tennessee has been shaped by steady property value growth and shifting market conditions. In Middle Tennessee, specifically in growing counties where demand remains high, property appraisals have seen consistent increases. This growth directly translates into higher levels of equity for local homeowners.
From 2020 to 2025, average home equity increased 142% nationwide, adding up to roughly $11.5 trillion in value. In Tennessee, homeowners saw a 105% increase in equity over the same period, with the average homeowner holding approximately $112,723 in equity as of 2025. This growth reflects rising home values and a strong housing market in the state. Knoxville and Chattanooga are the top two cities in Tennessee that have seen the most growth since 2019.
Here’s a look at how equity has risen nationwide between 2020 and 2025.
Current HELOC rates by state.
Compare current home interest rates by state and find a HELOC rate that suits your financial goals.
Select a state to view current rates:
How to Use the HELOC Calculator Data to Your Advantage
A HELOC calculator gives you insight into how borrowing against your home equity could affect your finances over time. By analyzing the results carefully, you can make more strategic decisions about how much to borrow, when to access funds, and how to manage repayment without putting unnecessary strain on your budget.
• Set realistic borrowing limits: Use the calculator to determine a comfortable payment range rather than borrowing the maximum amount offered. This helps prevent overleveraging your home and keeps monthly obligations manageable.
• Test interest rate sensitivity: Adjust the interest rate upward to see how future market changes could impact your payments. This prepares you for potential rate increases and helps you decide whether a HELOC fits your risk tolerance.
• Plan cash flow during both phases: Review payment estimates for the draw and repayment periods separately. Understanding how payments may change later allows you to plan ahead for higher monthly costs.
• Compare financing options: Use calculator results to compare a HELOC with a home equity loan or personal loan. Seeing differences in payments and total interest can clarify which option best suits your needs.
Tips on HELOCs
Proactive management is a necessary factor in successfully utilizing a credit line. Because this product is secured by your home, the stakes are high, and a disciplined approach to borrowing and repayment is required to protect your property. Below are some tips to keep in mind:
• Shop around. Compare options from multiple lenders to find your best offer. Look for a competitive interest rate and low fees, as well as a repayment term and monthly payments that fit your budget.
• Consider making principal payments during the draw period even if they are not required. This reduces the balance you will have to pay back later and saves on total interest.
• Stay informed with rates. Since rates are variable, staying informed helps you anticipate when your monthly payment might increase.
• Maintain a healthy credit score to ensure you can qualify for the best refinancing options or rate locks if they are offered by your lender.
• Keep a clear record of how the funds are used. If the funds are used to build or substantially improve the home that secures the credit line, the interest paid may be tax-deductible.
• Avoid using the credit line for small, everyday purchases. Treat it as a strategic tool for major expenses or wealth-building opportunities.
• Be aware of fees. Check for any annual fees, inactivity fees, or early closure fees in your agreement to avoid unexpected costs.
Recommended: ***What Is a Home Equity Line of Credit?
Alternatives to HELOCs
Exploring multiple financing paths is a sound strategic move because every homeowner has a different financial profile and different goals. While a revolving credit line offers high flexibility, other products might provide more stability or better suit a specific type of project. Here are four other options to consider:
Home Equity Loan
A home equity loan is a second mortgage that provides a fixed-rate, lump-sum payout. Unlike a revolving line, you receive all the funds at once and begin repaying the principal and interest immediately. This is a strong option for individuals who have a specific, one-time expense and prefer the security of consistent monthly payments that never change over the life of the financing. A home equity loan calculator can help you compare the cost of this product to that of a HELOC.
Recommended: Different Types of Home Equity Loans
Home Improvement Loan
A home improvement loan is typically an unsecured financing option, meaning it does not require your home to be used as collateral. This can be an attractive choice for specific projects where the homeowner wants to avoid the risk of foreclosure associated with secured products. These often come with fixed interest rates and a set repayment term, providing predictability for a specific renovation budget. While the interest rates may be higher than equity-based products, the lack of a lien on the property reduces the overall risk to the home.
Personal Line of Credit
A personal line of credit is a revolving option that is not tied to the home. Much like a HELOC, it allows for flexible withdrawals, and interest is only charged on the amount used. However, because it is unsecured, the interest rates are generally higher, and the credit limits may be lower than those available through equity-based products.
Cash-Out Refinance
A cash-out mortgage refinance involves replacing your primary mortgage with a completely new one for a higher amount than what you currently owe. The difference is paid out to you in cash. This can be beneficial if current market interest rates are lower than the rate on your existing mortgage, as it allows you to consolidate your debt into a single monthly payment. However, it requires paying new closing costs and resets the timeline of your primary mortgage.
Recommended: Cash-Out Refinance vs Home Equity Line of Credit
The Takeaway
Success with a home equity line of credit in Tennessee depends on having a clear repayment plan and the foresight to handle market fluctuations. The data provided by a HELOC calculator acts as a guide, helping you decide when to borrow and how to pay back the funds most efficiently. You can see if this fits within your budget before committing to the line of credit.
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.
FAQ
What is the difference between a HELOC and a home equity loan?
A HELOC is a revolving credit line with a variable interest rate that allows you to withdraw and repay funds multiple times. In contrast, a home equity loan provides a single lump sum of cash with a fixed interest rate and set monthly payments from the start. Both are secured by your property, but the HELOC offers more flexibility while the home equity loan offers more predictability.
How much can I borrow with a HELOC?
Lenders typically allow you to borrow up to 90% of the equity in your home. To qualify, though, you need to have at least 15% equity.
What can I use the money for from a HELOC?
Funds from a credit line are flexible and can be used for a wide range of needs. Common uses include major home renovations, consolidating high-interest credit card debt, paying for education, or covering significant medical expenses.
What happens when the draw period ends?
When the draw period ends, you can no longer withdraw money from the credit line. You enter the repayment period, during which you must pay back the borrowed principal plus interest over a set number of years, usually 10 to 20. This phase typically results in a significant increase in your monthly payment because you are no longer making interest-only payments and must now settle the full balance.
What is the minimum credit score I need to qualify for a HELOC?
Most financial institutions require a credit score of at least 640 to qualify for a credit line (some require 680). However, to access the most competitive interest rates and higher credit limits, lenders typically prefer a score of 700 or higher. Lenders also evaluate your debt-to-income ratio and employment history to ensure you have the financial capacity to manage the additional monthly obligations.
Learn more about home equity line of credits:
SoFi Loan Products 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.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
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.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
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.
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Free South Dakota HELOC Payment Calculator
South Dakota HELOC Calculator
By SoFi Editors | Updated January 23, 2026
Tapping into your home’s equity is a significant financial step that needs careful planning. Before you apply for a home equity line of credit, use the South Dakota calculator to see your estimated monthly payments. This guide offers basic information including definitions, housing trends, tips, financing alternatives, and clear step-by-step instructions on how to use the calculator. Use this knowledge to make a confident decision on whether a HELOC is right for your budget and goals.
- Key Points
- • A home equity line of credit (HELOC) is a revolving line of credit that allows you to use your home as collateral to secure funds toward a major project or expense.
- • There are two payment periods to be aware of: the draw period and repayment period.
- • Most HELOCs feature variable interest rates, meaning your monthly payments can change over time based on broader economic conditions.
- • To qualify, lenders generally require that homeowners have a minimum of 15% equity in their home.
- • Qualified borrowers may be able to access up to 90% of their home equity.
Calculator Definitions
• HELOC Balance: This term represents the total amount of money a borrower has currently withdrawn from their available credit line, or the amount a homeowner plans to borrow.
• Current Interest Rate: This is the rate at which interest accumulates on your outstanding HELOC balance.
• Draw Period: This is the specific time frame—often between 5 and 10 years—during which you can access funds from your HELOC, up to your approved credit limit.
• Repayment Period: This is the second phase—often 20 years—when the homeowner must pay back the full balance through combined principal and interest payments.
• Monthly Interest Payment: This is the monthly cost of borrowing funds based on the outstanding balance and the current variable interest rate. It does not contribute to reducing the original amount used.
• Monthly Principal and Interest Payment: This is the amount you’ll be required to pay monthly during the repayment period. Use the South Dakota HELOC payment calculator to get estimates since your exact payment amount will be based on current rates.
How to Use the South Dakota HELOC Calculator
Follow these easy instructions to use the South Dakota HELOC payment calculator most effectively.
Step 1: Enter Your Planned or Actual HELOC Balance
Start with the total amount you plan to borrow from the line of credit.
Step 2: Estimate Your Interest Rate
Now, enter your desired annual interest rate. The rate can be from a prospective lender or an estimate based on your research.
Step 3: Choose the Length of the Draw Period
The draw period timeframe is typically five to 10 years.
Step 4: Select Your Repayment Period
The repayment period timeframe is typically 10 to 20 years.
Step 5: Review Your Results
Analyze the results by looking closely at the potential monthly payments during both the draw and repayment periods.
Now that you are familiar with how to use the South Dakota calculator, let’s explore what is a home equity line of credit.
What Is a Home Equity Line of Credit?
A home equity line of credit, known as a HELOC, is a revolving line of credit that is secured by the equity in your home. Because your home serves as collateral, lenders typically offer more competitive interest rates compared to unsecured options like credit cards or personal loans. This also means that you risk foreclosure if you fail to make payments.
As you learn how a HELOC works, keep in mind that your home equity is the difference between your home’s current market value and the outstanding balance on your home loan and any other loans you might have where your home is used as collateral. The interest rate is usually variable (unlike a standard home equity loan, which usually offers a fixed interest rate) so it’s helpful to keep an eye on market movements and trends, like the U.S. Prime Rate.
There are two phases to the HELOC. First is the draw period, which is typically five to 10 years. This is when you can withdraw funds as needed, up to your approved credit limit. You are often required to make payments only on the interest that accrues on your outstanding balance. Our HELOC interest-only calculator can help you assess what your payment amounts for the draw period may be.
Then you begin the repayment period, usually 10 to 20 years, when your required monthly payments will increase significantly to cover both the principal balance and the interest. During this phase, you can use a HELOC repayment calculator to help you out.
If you are a South Dakota homeowner who has built up equity in your property, then you will want to use these tools to help you understand how to get equity out of your home.
Recommended: HELOC vs. Home Equity Loan
Home Equity Trends in South Dakota
With a HELOC, and with some of the different types of home equity loans, the amount of equity a homeowner possesses is the key to borrowing power. The housing market plays a role in influencing your home equity so it’s helpful to keep an eye on housing trends.
Thanks to a nationwide surge in home equity since 2020 (see chart), homeowners across the U.S., including those in South Dakota, have benefited from rising home prices. During that period, South Dakota saw a 99% increase in equity. In fact, the average South Dakota homeowner has around $156,000 in home equity.
Since lenders typically require that a homeowner maintain at least 15% equity to qualify for a HELOC, and you can borrow up to 90% of equity, many homeowners find themselves sitting on a substantial amount of tappable equity.
Current HELOC rates by state.
Compare current home interest rates by state and find a HELOC rate that suits your financial goals.
Select a state to view current rates:
How to Use the HELOC Calculator Data to Your Advantage
The South Dakota HELOC payment calculator allows you to experiment with different loan scenarios, budget effectively, and prepare for productive conversations with lenders. Follow these steps to get the most out of the calculator:
• Explore the estimates: One of the key functions of the South Dakota payment calculator is its ability to model scenarios. Since HELOC rates can shift over time, experiment with different HELOC balances, interest rates, or repayment terms to see how each of these figures affects the monthly payment.
• Evaluate debt consolidation: If you’re managing high-interest credit card debt, you can add up the monthly payment amounts on your cards and compare that to the monthly payment you would have if you used a HELOC to pay off all that you owe at once. There’s a good chance your monthly payment with a HELOC would be lower than the sum of what you’re currently paying. And it would be one payment instead of multiple payments.
• Approach lender conversations more confidently: Use the South Dakota calculator ahead of time to run estimates and gain a clear understanding of your borrowing capacity. That way you can enter lender negotiations with more realistic expectations.
Tips on HELOCs
Here are some tips that apply to HELOCs:
- Strengthen your credit score: Lenders typically require a credit score of at least 640.
- Shop around with different lenders: Don’t commit right away. Instead, compare annual fees, inactivity fees, and prepayment penalties from a variety of lenders.
- Prepare and plan a budget: With the transition between the two HELOC phases (the draw period and repayment period), you’ll see your monthly payments increase from interest-only to principal-and-interest.
- Consider the risks: A HELOC uses your home as collateral. This means that the lender could foreclose on your home if you fail to make payments.
Alternatives to HELOCs
Even if you are confident that a HELOC is appropriate for your budget and goals, it’s a good idea to be aware of alternatives before making a final decision. Here are some options:
Home Equity Loan
For a single, fixed-cost project, a home equity loan is a good choice because it provides the homeowner with a one-time, lump-sum disbursement secured by their home’s equity. The home equity loan typically has a fixed interest rate, which makes for consistent and predictable monthly payments. Use a home equity loan calculator to compare the cost of a home equity loan versus a HELOC.
Recommended: What Is a Home Equity Loan?
Home Improvement Loan
A home improvement loan is a personal loan designed to be used for renovations and repairs. It is similar to a home equity loan with fixed installments and predictable payments, but it is unsecured (it does not use your home as collateral), which typically results in a higher interest rate.
Personal Line of Credit
A personal line of credit (PLOC) is a revolving line of credit that is not secured by collateral. It functions similarly to a HELOC in that you can draw and repay funds as needed. Because it is unsecured, the PLOC holds less risk (because your home isn’t on the line) but usually means a higher interest rate. To qualify, a lender will look at your financial picture including your credit score and income; your home equity doesn’t play a role.
Cash-Out Refinance
When a homeowner takes out a cash-out mortgage refinance, they replace their primary mortgage with a new, larger mortgage. This process pays off the original mortgage debt, and the homeowner receives the remaining balance as cash. This move can be beneficial if current interest rates are significantly lower than the rate on the primary mortgage.
As you consider a cash-out refinance vs. home equity line of credit or home equity loan, a key difference is that the refinance consolidates all home debt into a single payment.
The Takeaway
South Dakota homeowners can use the HELOC payment calculator as a strategic first step when considering tapping into their home equity. Our online tool provides monthly payment estimates, giving the homeowner a clear idea of their borrowing power. Run scenarios with different borrowed amounts, interest rates, and repayment terms to find the right mix for your budget and goals.
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.
FAQ
How much can I borrow with a HELOC?
Lenders typically allow you to borrow up to 90% of your equity. The exact amount you can borrow will depend on the equity in your home. (Your equity is equal to your home’s estimated value minus your outstanding mortgage balance.)
What can I use the money for from a HELOC?
Homeowners can put HELOC funds toward almost any purpose, including home renovations, debt consolidation, or educational expenses.
Is the interest on a HELOC tax-deductible?
The interest on a HELOC may be tax-deductible. Always consult a professional tax advisor.
What is the minimum credit score I need to qualify for a HELOC?
You will need to show a 640 credit score or higher. Some lenders require at least a 680 credit score. You may be able to land more favorable terms and interest rates by having a credit score in the 700s.
Learn more about home equity line of credits:
SoFi Loan Products 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.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
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.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
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.
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Free South Carolina HELOC Payment Calculator
South Carolina HELOC Calculator
By SoFi Editors | Updated January 23, 2026
A home equity line of credit (HELOC) allows South Carolina homeowners to borrow against the equity they’ve built in their homes, offering flexible access to funds for expenses like renovations, debt consolidation, or unexpected costs. Because HELOCs typically come with variable interest rates and two distinct phases, it’s important to understand how this type of financing works before tapping into your equity.
A South Carolina HELOC calculator can help you estimate monthly payments and explore how rate changes may affect your budget. Keep reading for exactly how to use the calculator, plus learn what a home equity line of credit is and alternatives to consider.
- Key Points
- • A home equity line of credit operates as a revolving account, allowing you to withdraw funds, pay them back, and withdraw them again as needed.
- • This financial structure is secured by the equity in your primary residence, which serves as collateral for the credit line.
- • The life of the account is divided into two distinct phases: a draw period and a subsequent repayment period.
- • Interest rates for these accounts are typically variable, meaning they can fluctuate over time.
- • A HELOC calculator can help you predict monthly payments during both the draw period and the repayment period.
Calculator Definitions
• HELOC Balance: This represents the total amount of money you have currently withdrawn from your available credit line that has not yet been repaid to the lender.
• Current Interest Rate: This is the percentage charged on your borrowed funds. This rate is typically variable with home equity lines of credit.
• Draw Period: This is the initial phase of the credit line, usually lasting 10 years, during which you can actively withdraw funds up to your approved limit.
• Repayment Period: This is the second phase of the account, often lasting 20 years, where you are required to pay back the outstanding principal and interest.
• Monthly Interest Payment: This figure represents the cost of borrowing for one month, assuming you are only paying the interest accrued on your current outstanding balance.
• Monthly Principal and Interest Payment: This is the total amount due each month during the repayment phase, covering both the borrowed principal amount and the cost of the interest.
How to Use the South Carolina HELOC Calculator
Using the South Carolina HELOC calculator is a simple way to estimate payments and understand how borrowing against your home equity could affect your finances. Follow the steps below to model different scenarios and make more informed decisions before applying for a HELOC.
Step 1: Enter Your Planned or Actual HELOC Balance
Enter your current HELOC balance or the amount you plan to borrow. This figure is the primary driver of the monthly cost.
Step 2: Estimate Your Interest Rate
Enter the interest rate your lender offers, or use an estimated rate if you’re still comparing options. Because this figure largely determines your monthly payment and most HELOCs have variable rates, it’s smart to test higher rates as well to see how market changes could impact your costs over time.
Step 3: Choose the Length of Your Draw Period
The draw period defines your window of opportunity for accessing funds. This is the timeframe — often five to 10 years — during which you can use your equity for renovations, tuition, or other major costs.
Step 4: Specify Your Repayment Period
The repayment period is where the true financial commitment is realized. Once the draw phase closes, you enter a term — typically 10 to 20 years — where you must pay back everything you borrowed. In the calculator, specifying this timeframe allows you to examine the impact of different terms on your monthly budget.
Step 5: Review Your Results
Once you have entered all your data, the calculator provides a summary of your monthly obligations and the total cost of borrowing. Reviewing these results allows you to interpret the long-term impact of your equity strategy.
What Is a Home Equity Line of Credit?
A home equity line of credit, commonly known as a HELOC, is a revolving line of credit that allows you to borrow against the value of your primary residence.
Unlike a home equity loan where you receive a single sum of money, a HELOC functions much like a credit card with a significantly higher limit and a lower interest rate. You are approved for a maximum credit amount based on the equity you have built in your home, and you can withdraw as much or as little as you need during the active phase of the account.
There are two distinct phases in a HELOC:
• The first is the draw period, which typically lasts 10 years. During this time, you can access your funds as needed and are often only required to pay the interest on the amount you have used. Use a HELOC interest-only calculator to see what payments would be based on your balance.
• The second phase is the repayment period, which usually spans 20 years. Once you enter this phase, you can no longer withdraw money, and your monthly payments will increase to include both principal and interest. Use a HELOC repayment calculator to see what those payments might be.
Recommended: HELOC vs Home Equity Loan
What Is a HELOC Calculator?
If you’re thinking of getting equity out of your home, the first step is using a HELOC calculator. A HELOC calculator helps homeowners estimate their potential monthly payments during the draw period and repayment period. By adjusting variables such as balance, interest rate, draw period, and repayment term, the calculator allows you to model different scenarios and better understand how a HELOC could affect your budget before borrowing.
Home Equity Trends in South Carolina
Home equity represents the portion of your home you truly own, calculated as the property’s current market value minus any outstanding home loan balances. As home prices rise and loan balances fall, equity can grow into a meaningful financial resource for homeowners looking to borrow against it through options like a HELOC.
From 2020 to 2025, average home equity increased 142% nationwide, adding up to roughly $11.5 trillion in value. South Carolina outpaced the national average during this period, with home equity rising 155%. As of 2025, the average homeowner in the state holds about $93,212 in equity, reflecting strong housing appreciation and increased borrowing potential for many residents.
Here’s a look at how equity has risen nationwide between 2020 and 2025.
Current HELOC rates by state.
Compare current home interest rates by state and find a HELOC rate that suits your financial goals.
Select a state to view current rates:
How to Use the HELOC Calculator Data to Your Advantage
By analyzing the output of the South Carolina HELOC calculator, you can make decisions that protect your credit and your home while maximizing the utility of your funds. Here are four ways to use the HELOC calculator data to your advantage:
• Test affordability before borrowing: Use the calculator to estimate monthly payments during both the draw and repayment periods, then compare those figures to your household budget. This helps ensure a HELOC fits comfortably alongside your other financial obligations.
• Run interest rate scenarios: Because most HELOCs have variable rates, adjusting the rate in the calculator lets you see how payment amounts could change over time. This scenario planning helps you prepare for market fluctuations and avoid surprises.
• Compare borrowing strategies: By changing the loan balance, draw timing, or repayment length, you can evaluate different ways to use your credit line. This makes it easier to decide how much to borrow and when to repay.
Tips on HELOCs
HELOCs need to be managed with care so you don’t fall behind on bills. Here are some tips for repaying your home equity line of credit:
• Shop around. Compare options from multiple lenders to find your best offer. Look for a competitive interest rate and low fees, as well as a repayment term and monthly payments that fit your budget.
• Monitor variable rates. Since most of these accounts have rates that change with the market, you should check your rate regularly. If you see that interest costs are rising across the economy, consider making larger principal payments to reduce your overall debt.
• Make principal payments early. Even if you are only required to pay interest during the draw period, making voluntary principal payments can save you a significant amount of money in the long run. Every dollar of principal you pay back early is a dollar that won’t accrue interest during the repayment phase.
• Set a budget for draws. It can be tempting to use a revolving line of credit for everyday expenses, but this can lead to a balance that is difficult to repay. Limit your withdrawals to specific, high-value needs like home repairs, education, or debt consolidation.
• Check for annual fees. Be aware of inactivity fees or annual maintenance charges that might apply even if you aren’t using the line. Understanding these costs in advance helps you avoid surprises on your monthly statement and ensures you are only paying for a product you truly need.
Alternatives to HELOCs
While a revolving line of credit is a powerful tool, it is not the only way to access funds. Depending on your specific goals and your comfort with using your home as collateral, other financing structures might be a better fit for your financial landscape.
Home Equity Loan
Often confused with its revolving counterpart, a home equity loan is a “closed-end” second mortgage. Instead of a line of credit, you receive a single lump-sum payment at closing. These typically come with a fixed interest rate, providing the predictability of set monthly payments from day one. A home equity loan calculator can help you compare the cost of this product to that of a HELOC.
Recommended: Different Types of Home Equity Loans
Home Improvement Loan
A home improvement loan is typically an unsecured installment product. Unlike equity-based lines, it does not require you to use your house as collateral, which can be a significant benefit for risk-averse homeowners. This makes it a lower-risk option for those who may not have enough equity or who do not want to put their property on the line for a renovation. Because it is unsecured, the interest rates are often higher, and the amount you can borrow may be more limited than an equity-based line.
Recommended: Home Equity Loans vs Home Improvement Loans
Personal Line of Credit
A personal line of credit offers a revolving structure similar to a HELOC but without the collateral requirements. It is an unsecured account where the lender evaluates your creditworthiness and income to set a limit. While it provides flexibility for ongoing needs, the lack of collateral usually results in higher interest rates and lower borrowing limits.
Cash-Out Refinance
A cash-out mortgage refinance involves replacing your primary mortgage with a completely new one for a larger amount than what you currently owe. You receive the difference in cash, which can be an attractive option if current mortgage rates are lower than the rate on your existing mortgage. However, it resets the clock on your primary mortgage and often involves higher closing costs than a second mortgage option.
When comparing a cash-out refinance vs. home equity line of credit, a cash-out refinance consolidates all housing-related debt into a single monthly payment, whereas a HELOC is a separate payment.
The Takeaway
The decision to tap into your property’s value is a significant milestone in any homeowner’s financial journey. A South Carolina HELOC calculator provides clear, data-driven insights. It allows you to move past guesswork and build a strategy based on the reality of your household budget and see if a HELOC works with your long-term financial goals.
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.
FAQ
What is the difference between a HELOC and a home equity loan?
A HELOC is a revolving credit line with a variable rate and two phases: draw and repayment. You can borrow and repay funds repeatedly. A home equity loan provides a lump sum of cash all at once with a fixed interest rate and fixed monthly payments that begin immediately. While both are second mortgages secured by your home, the HELOC offers more flexibility for ongoing expenses, whereas the loan offers more predictability for a one-time cost.
Is a HELOC interest rate fixed or variable?
Most HELOCs feature a variable interest rate that can change monthly. This means your monthly payments may fluctuate over the life of the account. Some lenders offer a fixed-rate option that allows you to convert a portion of your balance to a set rate for a specific term, providing more predictability and protection against rising interest rates during the repayment phase.
What happens when the draw period ends?
Once the draw period ends, typically after 10 years, you can no longer withdraw funds from the credit line. The account enters the repayment period, which usually lasts 10 to 20 years. During this phase, your monthly payments will increase significantly because you must begin paying back both the principal amount you borrowed and the interest. You must pay off the entire outstanding balance by the end of this set term.
Are there closing costs or fees for a HELOC?
Yes, these products often involve closing costs and fees ranging from 2% to 5% of the credit limit. Fees can include application fees, appraisal costs, and annual maintenance charges. Some lenders may waive or reduce these costs if you meet certain requirements, such as keeping the account open for a minimum of three years.
What is the minimum credit score I need to qualify for a HELOC?
Lenders typically look for a credit score of at least 640, though many prefer scores of 680 or higher for the most competitive rates and higher borrowing limits. Along with your credit score, lenders will evaluate your employment history, income, and debt-to-income (DTI) ratio. A stronger credit profile gives the lender more confidence, which can reduce your overall interest rate.
Learn more about home equity line of credits:
SoFi Loan Products 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.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
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.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
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.
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Free Rhode Island HELOC Payment Calculator
Rhode Island HELOC Calculator
By SoFi Editors | Updated January 23, 2026
Congratulations. If you’ve been thinking about getting a home equity line of credit (HELOC), then you’ve probably been steadily paying down your home loan. In mere minutes, you can understand the estimated costs involved in the two phases of the HELOC, the draw phase and the repayment phase. Ready to get started? Follow our guidelines to use the free HELOC calculator properly. Along the way you’ll learn all the ins and outs of HELOCs so you’ll be prepared to borrow like a pro.
- Key Points
- • A home equity line of credit is a revolving credit line, allowing users to withdraw and repay funds multiple times if they wish to do so.
- • Using a HELOC payment calculator can help homeowners think strategically about the costs of a HELOC and the transition to the repayment phase before deciding whether or not to borrow using this method.
- • Most HELOCs feature variable interest rates and require only interest payments in the early years.
- • The repayment period, during which borrowers repay all they have borrowed with a HELOC, plus interest, can last up to 20 years.
- • Because a HELOC is secured by the property, it typically carries lower interest rates than unsecured options like credit cards and personal lines of credit.
Calculator Definitions
• HELOC Balance: Your balance is the amount you have drawn thus far on your HELOC (not the credit line, which might be much larger). If you don’t yet have a HELOC, the balance is the amount you think you would like to borrow.
• Current Interest Rate: This is the percentage the lending institution is charging at the moment for borrowing with a HELOC. If you don’t yet have a HELOC, you can find interest rates online or request quotes from lenders you are interested in potentially borrowing from.
• Draw Period: The draw period is the initial phase of a HELOC, typically lasting five to 10 years, during which the homeowner can access funds up to their credit limit. During this time, required monthly payments are frequently limited to the interest accrued on the balance used; principal payments are optional.
• Repayment Period: In this second phase of the credit line, withdrawals end and the borrower repays all that they owe, plus interest, in monthly payments. This can take place over 10 or 20 years. The longer the repayment phase, the lower the monthly payments may be, but the more interest is usually paid over the full HELOC term.
• Monthly Interest Payment: This is the amount the borrower will pay each month during the draw phase. The calculator estimates this number. In real-world conditions, HELOCs have variable interest rates so the actual payment amount may differ.
• Monthly Principal and Interest Payment: In the repayment phase, the monthly payment will consist of both the principal and interest.
How to Use the Rhode Island HELOC Calculator
Now that you have learned a little about what is a home equity line of credit, give the calculator a try by following these steps:
Step 1: Enter Your Planned or Actual HELOC Balance
Type in the amount you owe on the HELOC, or the amount you think you would like to borrow. For example, if you have a bid from a contractor for a bathroom renovation, you might enter that number.
Step 2: Estimate Your Interest Rate
Input the rate provided by your lender, or use a rate you’ve been quoted in the process of researching prospective lenders.
Step 3: Choose the Length of the Draw Period
Select the number of years you wish to use the HELOC before you begin to make those mandatory principal-plus-interest payments.
Step 4: Select Your Repayment Period
Enter the number of years you wish to allocate for paying back the total balance once the draw phase concludes. Remember, as a rule, shorter repayment periods equal larger monthly payments.
Step 5: Review Your Results
Analyze the projected monthly payments to determine if these figures fit within a sustainable long-term budget.
What Is a Home Equity Line of Credit?
As a borrowing method, a HELOC functions quite differently from a standard lump-sum loan. Some basic ground rules: Most lenders will want you to have at least 15% to 20% equity in your property in order to borrow using your home as collateral. The fact that your home is the collateral means that the HELOC is, technically, a second mortgage (assuming you’re still paying off your first one). This also means that if you fail to make payments when they are due, the lender could foreclose. So while using a HELOC can feel a lot like using a credit card, your home is at risk if you fall behind on payments.
The amount one can borrow with a HELOC is largely determined by the market value of the residence and the amount remaining on the primary mortgage. Many lenders allow homeowners to borrow up to 90% of their equity.
As noted above, the HELOC will have two phases: a draw period and a repayment period. During the draw period (often 10 years), you may only be required to pay interest on what you borrow. A HELOC payment calculator or HELOC interest-only calculator can show you what a monthly interest payment would be based on your balance. You can pay down the principal as well. Do so and you’ll have the full use of the credit line again for as long as the draw phase lasts. After the draw period is over you can no longer borrow and will begin making monthly principal-plus-interest payments. There’s a HELOC repayment calculator at this point to help you see what you might owe. HELOCs have variable interest rates, so the amount of your monthly payment can vary over the repayment term, which can be as long as 20 years.
Recommended: How to Get Equity Out of Your Home
Home Equity Trends in Rhode Island
Rising property values in a specific region, such as Rhode Island, can significantly expand a homeowner’s HELOC borrowing capacity. The average Rhode Island homeowner’s equity more than doubled from 2020 through 2025 as home values trended upward. The average owner is now sitting on more than $250,000 in equity. A credit limit at 90% of that average equity would equal $225,000. These healthy equity levels are part of a national trend, as shown in the graphic.
Current HELOC rates by state.
Compare current home interest rates by state and find a HELOC rate that suits your financial goals.
Select a state to view current rates:
How to Use the HELOC Calculator Data to Your Advantage
Utilizing the data from a Rhode Island HELOC calculator can help you make decisions and manage your HELOC effectively. These are ways you can put the calculator to work for you:
Plan your projects: The estimated draw and repayment payment amounts revealed by the calculator can show you how a renovation or large purchase fits into your monthly budget before you put down a deposit on the job. If you’re looking at a kitchen renovation bid of, say, $40,000, you can run that number as well as, say, $30,000 to see how cutting $10,000 from your renovation budget would impact your monthly bill.
Explore debt consolidation: Many people use a HELOC to pay off higher-interest debts. If your monthly HELOC payment is less than the combined total of your credit-card payments, a HELOC might be a good fit for you, provided you can be disciplined in your use of the credit line for further purchases.
Have smart lender discussions: Knowing your estimated borrowing limit and payments helps you approach lenders from a position of strength.
Recommended: HELOC vs. Home Equity Loan
Tips on HELOCs
Managing a HELOC requires a disciplined approach. You want to make use of the credit line but keep your payments as low as possible and never miss one. Here are some success strategies:
• Shop around: Different lenders offer different rates and terms. Before you lock in a lender, compare options from multiple institutions. Use the HELOC payment calculator to run the numbers on each option.
• Make a repayment plan: It can be tempting to use home equity for a vacation or to keep on top of the latest fashion trends, but making routine purchases can be a risky practice. Before you build up debt, have a clear plan for how you will repay the borrowed amount. In the best case, using a HELOC helps you improve your financial stability (by paying down high-interest debt, for example) or add value to your home.
• Understand fees: Know the full cost of borrowing. Some HELOCs have closing costs or annual maintenance fees, inactivity fees might be triggered if you don’t use the line of credit, and there could be early termination penalties if you close the account within a certain timeframe.
• Prepare for repayment: One of the biggest financial shocks for HELOC borrowers is the transition from the draw period to the repayment period. If you have been making interest-only payments, your monthly debt will increase significantly when principal payments are added. Using the estimates from a free HELOC calculator, you can plan ahead.
Recommended: HELOC vs. Home Equity Line of Credit
Alternatives to HELOCs
There aren’t really different types of home equity loans, but there are different ways to borrow based on your equity. A HELOC is one of three methods. The other two are a home equity loan and a cash-out refinance. Learn about these and other methods that don’t involve using your home as collateral below.
Home Equity Loan
A home equity loan is, like a HELOC, a second mortgage because money is borrowed with your home as collateral. In contrast to a HELOC, though, a home equity loan delivers a single lump-sum payment. You’ll begin repaying what you have borrowed, with interest, immediately. Home equity loans usually have a fixed interest rate, so your monthly payment will usually stay the same through the life of the loan. Repayment terms can range from five to 30 years. A home equity loan calculator can show you what monthly payments might be with this type of loan.
Recommended: What Is a Home Equity Loan?
Home Improvement Loan
A home improvement loan is an unsecured personal borrowing option specifically designed for property upgrades. Unlike an equity-based credit line, this choice does not require the home to be used as collateral, which protects the owner from foreclosure in the event of default. These are usually installment loans, meaning the borrower receives a lump sum and pays it back with fixed payments over a set term.
Personal Line of Credit
A personal line of credit functions similarly to a HELOC but is typically unsecured. Approval and interest rates are based primarily on personal creditworthiness and income rather than property value. While this provides flexibility and removes the risk to the home, the interest rates are generally higher than those associated with equity-based products.
Cash-Out Refinance
A cash-out mortgage refinance involves replacing the existing primary mortgage with a completely new, larger one. The homeowner receives the difference between the two mortgages in cash, which can then be used for any purpose. Things to consider when comparing a cash-out refinance vs. a home equity line of credit: A refinance consolidates the debt into a single monthly payment, though it often involves higher closing costs and requires replacing the entire mortgage at current market rates. It’s important to consider the total cost of a refinance before committing to one.
The Takeaway
Understanding the mechanics of a HELOC can help you determine whether or not this method of borrowing is right for you. A HELOC payment calculator can show you what monthly payments would be — a critical part of the decisionmaking process. Seeking out rate quotes from multiple lenders and running them through the calculator can help you pinpoint the right partner for your borrowing journey.
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.
FAQ
What is the difference between a HELOC and a home equity loan?
A HELOC is a revolving credit line that, in practice, works much like a credit card, allowing you to withdraw funds as needed. In contrast, a home equity loan provides a single lump sum upfront. A HELOC usually has a variable interest rate, while a home equity loan has a fixed rate. While both are second mortgages, the HELOC offers more flexibility in how and when you use the funds, while the home equity loan provides more predictability for budget planning.
What can I use the money for from a HELOC?
The funds from a home equity line of credit are highly flexible and can be used for almost any purpose. Common uses include paying for home renovations or consolidating higher-interest debt. Some homeowners use a HELOC to pay for education expenses or cover unexpected medical bills. Others simply like to have a line of credit open in case life throws a surprise their way.
Are there closing costs or fees for a HELOC?
HELOCs often have lower upfront costs than home equity loans or refinances. But you will likely have to pay for an appraisal, and there may be other expenses such as annual maintenance fees, transaction fees, or inactivity fees if the credit line is not used. Some lenders charge an early closure fee if you pay off and close the account within the first 36 months of opening the credit line.
Is the interest on a HELOC tax-deductible?
Interest paid on a home equity line of credit may be tax-deductible if you itemize on your tax returns. Because tax laws are subject to change, it is important to consult a tax advisor to determine eligibility for these deductions based on your specific situation.
Learn more about home equity line of credits:
SoFi Loan Products 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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²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
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.
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