THE NUMORIX GUIDE
How to use the HELOC Calculator
Last reviewed September 14, 2026
What this calculator does
The engine calculates equity and caps the usable line at the lesser of entered creditLine and 85% of equity.
Formula and method
The engine calculates equity and caps the usable line at the lesser of entered creditLine and 85% of equity. It models the amount drawn as interest-only during the draw period, using borrowed x annualRate / 12, then amortizes that same borrowed amount over the repayment period. Total interest is draw-period interest plus repayment-period interest.
Variables and inputs
Enter home value, mortgage balance, credit line, annual interest rate, draw period in years, repayment period in years, and amount drawn. Values are dollars except rate and periods. The route treats the entered rate as fixed across both phases, although many real HELOCs have variable rates.
Worked example
With $400,000 home value and $200,000 mortgage, equity is $200,000 and 85% is $170,000. A $100,000 credit line and $50,000 draw therefore use $50,000. At 8.5%, draw-period interest-only payment is 50,000 x 0.085 / 12 = $354.17; over 10 years that is about $42,500 of draw interest before the repayment phase.
How to interpret the result
The draw-period payment can look low because it covers interest only. The repayment-period payment is higher because it amortizes principal. Comparing only the first payment hides the payment reset and the total cost of using the line.
Common mistakes to avoid
Do not use the credit-line limit as the amount drawn unless the full line is actually borrowed. Distinguish draw years from repayment years. Check whether a real HELOC changes rate or requires principal payments during the draw period.
Assumptions and limitations
This is a two-phase fixed-rate model. It excludes variable-rate indexes and margins, minimum payments, fees, multiple draws, changing balances, taxes, and lender-specific payment formulas. The 85% equity cap is a route assumption rather than a universal lending rule.