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HELOC payment calculator
How large a line your equity supports, the interest-only payment while you're drawing on it, and the much larger one waiting in the repayment period.
When the draw period ends, $75,000 amortizes over 20 years and the payment rises to $651, $120 more per month.
How a HELOC is sized and paid
A HELOC is a revolving line secured by the equity between your mortgage balance and a ceiling the lender sets as a share of the home's value. During the draw period, usually ten years, you can borrow, repay, and borrow again, and the payment is just interest on whatever is outstanding. Draw nothing and you owe nothing.
Two payments, one loan
The structural surprise is the transition. When the draw period ends, the line closes and the outstanding balance amortizes over the repayment period. Going from interest-only to principal-and-interest on the same balance typically doubles the payment or worse, and it arrives on a schedule set at closing a decade earlier.
Variable rate, real consequences
Most HELOCs float against a published index, so the payment moves with rates rather than staying fixed like a first mortgage. On a large drawn balance, a two-point move is real money every month. Investors using a HELOC as short-term acquisition capital, draw, buy, refinance, repay, mostly sidestep this; anyone carrying a balance for years does not.
HELOC questions
HELOC or cash-out refinance?
A cash-out refinance replaces your whole first mortgage. Bad news if you're sitting on a low fixed rate you'd have to give up. A HELOC leaves it untouched and layers a second lien on top, at a higher and usually variable rate. Low first-mortgage rate and a short-term need favors the HELOC; a large permanent need at a competitive rate favors the refinance.
Can I use a HELOC for a down payment on a rental?
It's a common strategy, and lenders will count the HELOC payment in your debt-to-income when they underwrite the new purchase. The real caution is structural: you've now secured an investment against your own home, so a vacancy at the rental is paid for out of the equity you live in.
Does an unused HELOC cost anything?
Usually little or nothing: most lines charge interest only on the drawn balance, though some carry small annual or inactivity fees. That's why many investors open one before they need it: an approved, undrawn line is cheap optionality, and it's far easier to get approved while your income and the market are cooperating.
Every calculator
Deploying that equity into a rental?
Paste the listing you're eyeing and Faro underwrites it end to end: cash flow, comps, and a target offer price.
Estimates for analysis and educational use only: not financial, investment, tax, or legal advice. Verify every number independently before making a purchase decision.