HELOC Calculator
Combined loan-to-value, an interest-only draw, and the payment jump when that balance starts to amortize.
Key concepts
Combined LTV
The first mortgage plus the amount drawn, divided by the home value. The maximum line is home value times the cap you type, minus the first mortgage.
Payment jump
The amortizing payment minus the interest-only payment. It is the increase when the draw period ends and principal starts.
What this tool does
What is included
Enter the home value, the first-mortgage balance, and a loan-to-value cap. Scenario A is one draw: amount, an index plus a margin, a lifetime cap, interest-only years, and repayment years. During the interest-only years the balance stays put. After that, the same amount amortizes and the payment jumps. A HELOC is not cash-out, and the refinance calculator does not model cash-out.
A second draw
Scenario B is another draw, rate, or term against the same house and the same cap. The chart draws Scenario A’s balance, flat and then declining. Scenario B adds a second line. A closed-end second lien that amortizes from the first payment is a different contract and is not calculated here.
Line, interest-only payment, then amortization
Maximum line = home value × max LTV − first mortgage Interest-only payment = drawn × rate / 12 Payment jump = amortizing payment − interest-only payment
The note rate is the index you type plus the margin, and it cannot go above the lifetime cap. The index is not a live market rate. The amortizing payment is the standard fixed-rate formula on the amount drawn, over the repayment months, at that note rate. If the cap is higher than the note rate, the page also prices the payment jump at the cap. If the interest-only period is zero, the jump is zero and amortization starts immediately. A draw above the line is flagged. The payments still use the amount you typed.
Worked example
A 400,000 home with 250,000 still on the first mortgage and an 80% cap leaves a 70,000 line. A 40,000 draw is a 72.5% combined loan-to-value, inside the cap. At 8.5%, ten interest-only years cost about 283 a month and about 34,000 of interest, and the 40,000 is still there. A 20-year amortization then costs about 347 a month. The jump is about 64.
Common mistakes
- Reading the interest-only payment as the cost of retiring the line. The balance is still there when the draw period ends.
- Ignoring a draw that sits above the cap you typed. The page prices it and says it is over the line.
- Treating the index as a live quote. You type the index, the margin, and the lifetime cap. The note rate is index plus margin, held at the cap.
Methodology on this page
Combined loan-to-value uses the first mortgage plus the draw, divided by home value. The interest-only phase pays interest only, so the drawn balance does not fall. Repayment then uses fixed-rate amortization on that balance at index plus margin, limited by the lifetime cap you type. The index is not a live quote. Fees, the first mortgage’s own payment, and a line that is drawn further later are excluded. This is not financial advice and not a lender disclosure.
Read the full FinTools4U methodology →Frequently asked questions
What is the payment jump?
The amortizing payment minus the interest-only payment. It is how much the bill on the drawn amount rises when the interest-only period ends.
Does this include the first mortgage payment?
No. The first mortgage is a balance in the loan-to-value math. Its principal and interest are not added to either HELOC payment.
What if I set the interest-only period to zero?
There is no jump. The amortizing payment is due from the first month, and interest-only interest is zero.
Is this financial advice?
No. It is an educational schedule that runs in your browser. A lender’s disclosure is what states the index, the margin, and the fees.
Sources & further reading
- CFPB — What is a HELOC? — Borrower-facing explanation of a home equity line of credit, including the draw period.
- CFPB — Owning a Home — Context for mortgage balances that sit ahead of a line in the loan-to-value math.
Related guide
Related calculators
Mortgage Payment
Principal and interest on a fixed loan, when the contract amortizes from the first payment.
Home Affordability
Price from income and debts, before a line against a home you already own.
Amortization Schedule
The month-by-month split once a balance is amortizing.
Mortgage Payoff
Extra principal on a fixed home loan, which is a different question from a draw period.