# HELOC Payment Calculator

This HELOC calculator is designed to help you quickly and easily calculate your monthly HELOC payment per your loan term, current interest rate, and remaining balance.

**Calculate Your HELOC in Six Easy Steps:**

- Input your remaining HELOC balance
- Input the annual interest rate you are charged on your HELOC
- Input details of the initial period of your line of credit loan during which you make interest-only payments
- Input the repayment period of your line of credit; i.e., the period during which you will make both interest and principal payments
- Provide the date at which your loan commenced (month and year)
- Hit the "Calculate" button to obtain the HELOC calculation.

## What is a HELOC?

A HELOC is a form of loan that is secured against your home. It provides you with access to a revolving line of credit that you can use to fund significant expenses or pay off any other debts or lines of credit you may have.

HELOCs can be attractive because they are available at a lower interest rate than some alternative loans and the interest on the loan is typically tax deductible.

In many ways, HELOCs act in a very similar way to a credit card. You have access to a given set of funds in the same way you have a credit limit on the value of funds you can access via your credit card.

In terms of the HELOC, you typically only need to make interest repayments during the draw period, which is usually between 10-15 years. During this time, you also have the option to make payments back against the principal. When you pay off part of the principal, the funds return to your line amount.

As soon as the draw period ends, the repayment period commences. At this point, you start paying back the amount of the remaining principal you owe, plus interest.

To access a HELOC, you need to have the corresponding equity available in your property; that is, the value of equity in your home that you currently own must be higher than the amount you wish to borrow.

Most HELOC providers allow you to borrow up to a maximum of 85% of the value of your home minus the amount you owe. In addition, lenders will also take a look at your employment history, credit score and history, monthly income and expenditure, and any other debts you may have.

## Formulas

The HELOC Payment Calculator uses the following formulas:

Monthly Interest Only Payment = CHB × RATE

Monthly Principal & Interest Payment = (CHB × RATE) × ( (1 + RATE)^{ (12 × RP)} ) / ( (1 + RATE)^{ (12 × RP)} - 1 )

Where:

**CHB** = Current HELOC Balance ,

**RP** = Repayment Period (years) ,

**RATE** (monthly interest rate) = Decimal Rate / 12 , or RATE = (Annual Interest Rate / 100) / 12