HELOC Payment Calculator

HELOC Payment Calculator to calculate the monthly payments for your HELOC loan. The interest only HELOC calculator is calculated based on your current HELOC balance, interest rate, interest-only period, and the repayment period. Home equity line of credit calculator excel will calculate the payments and show you an amortization schedule for each payment. The HELOC amortization schedule is printable, and you can export it to excel or as a pdf file.

Interest Only HELOC Calculator
Current HELOC Balance		Interest Rate
Interest Only Period	years	Repayment Period	years
First Payment Date		Amortization Schedule	Show By Month Year
		Check Local Home Equity Rates

What is a home equity line of credit?

A home equity line of credit or HELOC is a line of credit secured by your home. If you need to pay off high-interest credit card debts, or other large expenses, you can consider HELOC as it often has a much lower interest rate than other types of loans such as credit cards. Learning how to get equity out of your home is important if you need to borrow money at a low-interest rate.

How does HELOC work?

HELOC allows you to borrow money using your house as collateral. The amount of money you can borrow depends on your equity in the house. As you repay your home loan, you build equity on your home. The more equity you have in your home, the more you can borrow. You can borrow using the HELOC again and again because when you repay your home loan, you are building equity at the same time.

How to qualify for a HELOC?

To qualify for HELOC, you need to have enough equity in your home. The amount that you owe on your home must be less than the value of your home, otherwise, you have no equity. To calculate how much equity you have in your home, simply subtract the mortgage balance by the value of your appraised home. Many banks allow you to borrow up to 85% of your home minus the amount you owe. The process of applying for a HELOC is similar to when you apply for a mortgage. Lenders usually review your credit score, employment history, income, and debts to determine whether or not you are qualified, and at what interest rate. The terms for a home equity line of credit can be anywhere from 5 to 30 years.

How to take equity out of your home?

There are mainly three ways that you can take equity out of your home, a home equity line of credit, a home equity loan, and cash-out refinance.

HELOC - A home equity line of credit is like a credit card where the borrower has a limit on how much money he can use. The borrower can pay off the money he uses and the limit is reset so he can borrow again. The borrower doesn't have to use up all the money that he is allowed to borrow, and he pays interest only on the money he borrows.
Home Equity Loan - A home equity loan allows the borrower to borrow a lump sum of money against their home. The borrower then pays back the lender in installments just like a mortgage payment. The borrower will pay the interest on the amount that he borrows, usually with a fixed interest rate.
Cash-Out Refinance - A cash-out refinance allows a borrower to refinance his mortgage into a new mortgage that is larger than the balance of his current mortgage. The borrower will pocket the cash difference between the new loan and the current mortgage balance.

There are pros and cons of HELOC, home equity loans, and cash-out refinance. To learn more about home equity loans and cash-out refinance, visit the home equity loan calculator and cash-out refinance calculator.

Common Use of HELOC

There are many things that a borrower can use the HELOC, following are the common use of a HELOC.

Home improvement - Borrowers can use the HELOC to make home improvements which would increase the value of their homes. They can fix their bathroom, remodel their living room, or redesign their kitchen. In some cases, home improvements may help a borrower to pay off their PMI earlier when their down payment is less than 20%. Visit PMI payoff calculator to learn more about private mortgage insurance.
Payoff higher interest debt - Borrowers can use the HELOC to pay off other debts with a higher interest rate. This will save the borrower money because HELOC has a much lower interest rate than most other loans or debts that you may have, such as credit cards, personal loans, or student loans.
Education - Borrowers can use a HELOC to fund education for themselves or their families. If your children are going to college and they need help with tuition, a HELOC would work.
Medical bills - The costs of medical bills are high without insurance. If you have medical bills to pay, you may consider a HELOC.
Buying a second home or investment property - Borrowers can use a HELOC to buy a second home or a rental property to generate passive income.
Business venture - Want to start a business but don't have money to get started? HELOC is an option. You can use HELOC for any business venture that you may have.
Investment - If you have an investment opportunity that gives you a better return than the interest rate you are paying for a HELOC, then go for it.
Vacation - Using a HELOC to fund for a vacation is usually a bad idea, but you could if you wanted to.

As you can see, a HELOC can be used pretty much for everything. However, before applying for a HELOC, borrowers should understand the risks involved with a HELOC. Since HELOC uses the borrower's home as collateral, the borrower may lose his home if he fails to make payments. Unlike a credit card, the risk of defaulting is late fee penalties or a lower credit score. The risks and penalties are much higher for HELOCs than for credit cards. Borrowers should be absolutely sure that they can repay the HELOC before applying.

Pros and Cons of HELOC

Let's look at the pros and cons of HELOC. The main advantages of HELOC are the following.

Pros of HELOC

Lower interest rate - HELOC offers a much lower interest rate than any other loans or credit cards.
Pay interest only on the amount that you use - Unlike a home equity loan where the borrower is required to pay interest on the amount that he takes out, a HELOC allows the borrower to pay interest only on the portion that he uses.
Use the money for pretty much anything - You can use a HELOC for almost anything that you can think of.
Larger amount - if you have good equity in your house, you can borrow a much larger amount compared to credit cards or personal loans.
Lower upfront costs - the upfront costs are low and they can usually be waived.
Lower closing costs - there are usually no or lower closing costs.

Following are the disadvantages of HELOC.

Cons of HELOC

Your home is at risk - if you default on HELOC, you could lose your home. If you miss a payment, it will lower your credit score.
The interest rate could go higher - if the interest rate goes up in the future, you will be paying more interest. Unlike a home equity loan, where the borrower can lock and have a fixed interest rate throughout the whole term.
Minimum withdrawal requirements - lenders may require a minimum withdrawal even if you don't need it.
Longer process time - the application for HELOC has a longer process time than personal loans and credit cards.
Fees - there might be application fees, annual fees, and cancellation fees for a HELOC.

How to calculate HELOC payment?

Different home equity lenders may have different ways to calculate HELOC payments. Some lenders require the borrowers to pay interest only for a period of time and then start repaying the principal with interest. Other lenders may require balloon payments, so instead of an interest-only period, you pay the same amount each month for a few years, and then you are required to pay the rest in a lump sum.

HELOC Payoff Calculator

Our HELOC payoff calculator uses the interest-only period to calculate the result. Simply enter the current HELOC balance, interest rate, interest-only period, and repayment period, and you will get an amortization schedule that shows your monthly payment. If your payment doesn't start today, you have the option to select your first payment date in the past or in the future, and then you will see when you will pay off your home equity line of credit. For borrowers who want to pay off their HELOC earlier with extra payments each month, please use the early HELOC payoff calculator.

How to Use the HELOC Payment Calculator?

Current HELOC Balance - The amount the borrower uses on his HELOC. Interest Rate - The interest rate of the HELOC. Interest Only Period - The period where the borrower is allowed to pay only interest. Repayment Period - The period where the borrower is required to pay interest plus principal. First Payment Date - The date when the borrower starts making payments. Amortization Schedule - The borrower can view the HELOC amortization schedule monthly or annually.

HELOC Amortization Schedule

The HELOC payment calculator generates a HELOC amortization schedule that breaks down each monthly payment with interest and the principal amount that a borrower will be paying. Since borrowers only pay interest in the interest-only period, the HELOC amortization schedule for that period will be just for interest payments and $0 for the principal. After the interest payment period is over, then HELOC amortization will have a different monthly payment since the borrowers are required to pay the principal in addition to the interest payment. Borrowers see the exact payoff date for their HELOC loans, the total interest paid, and the total amount of payment made throughout the life of the loan.

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