A HELOC (Home Equity Line of Credit) is a revolving line of credit secured by your home. During the draw period you borrow up to your credit limit and pay interest only (or principal + interest). During the repayment period the line closes and you repay the outstanding balance in fixed monthly installments.

How is the HELOC credit limit calculated?

Credit limit = (Home Value × CLTV limit) − Existing Mortgage Balance. For example, a $400,000 home with an 85% CLTV cap and a $250,000 mortgage yields: ($400,000 × 0.85) − $250,000 = $90,000.

What is the draw period?

The draw period is typically 5–10 years during which you can borrow from the line, repay it, and borrow again. Most lenders require interest-only payments on the amount drawn, though some allow principal payments as well.

What happens at the end of the draw period?

The line closes to new draws and enters the repayment period (usually 10–20 years). The outstanding balance is fully amortized — you pay both principal and interest — resulting in higher monthly payments than during the draw period.

Is HELOC interest tax-deductible?

Under current U.S. tax law (Tax Cuts and Jobs Act), HELOC interest is deductible only when the funds are used to buy, build, or substantially improve the home securing the loan. Interest on HELOC funds used for other purposes (e.g., debt consolidation, vacations) is generally not deductible. Consult a tax advisor for your situation.

What CLTV limit do most lenders use?

Most lenders cap HELOC borrowing at 80%–85% combined LTV (CLTV), meaning your first mortgage plus HELOC cannot exceed that percentage of your home's appraised value. Some lenders go up to 90% for well-qualified borrowers.

Can I calculate a HELOC on an investment property?

This calculator works for any property type. Note that lenders typically apply stricter CLTV limits (often 70%–75%) and higher rates for non-owner-occupied properties. Enter the appropriate CLTV for your property type.

HELOC Calculator

Name: HELOC Calculator
Availability: InStock
Author: Nham Vu

Enter your home value, mortgage balance, LTV limit, and rate to calculate your HELOC credit limit and monthly payments for both draw and repayment periods.

HELOC Inputs

Home Value ($)

Existing Mortgage Balance ($)

Max Combined LTV (CLTV) (%)

Typically 80%–90%. Check with your lender.

Annual Interest Rate (%)

Draw Period (years)

Repayment Period (years)

Quick Examples

Fill in your home details on the left and click Calculate.

Maximum HELOC Credit Limit

—

Based on — CLTV cap on a — home minus — mortgage balance

Mortgage HELOC Available Untapped Equity

— — —

Draw Period

10-year draw period

Monthly Payment (Interest-Only)

—

Based on the full credit limit drawn at the stated rate.

Repayment Period

20-year repayment period

Monthly Payment (Fully Amortized)

—

Principal + interest to pay off balance in full.

Full Summary

Home Value	—
Mortgage Balance	—
CLTV Cap	—
Max Borrowable (Home × CLTV)	—
HELOC Credit Limit	—
Annual Interest Rate	—
Draw Period Payment (interest-only)	—
Repayment Period Payment (P+I)	—
Total Interest (draw, interest-only)	—
Total Interest (repayment period)	—
Total Interest Paid	—

Typical Lender CLTV Limits

CLTV Cap	Typical Borrower Profile	PMI / Rate Impact
80%	Standard — most banks and credit unions	Best rates
85%	Good credit, strong income	Slightly higher rate
90%	Excellent credit (720+), low DTI	Higher rate, stricter approval
70%–75%	Investment/rental properties	Lower limit, higher rate
> 90%	Rare; specialized lenders only	Significantly higher rate

Summary