How your credit limit is set
Available credit = home value × max CLTV − mortgage balance
With a $400,000 home, an 85% limit and $250,000 left on the mortgage: $400,000 × 0.85 − $250,000 = $90,000.
Payment example
Drawing $50,000 at 8.5%, the interest-only payment during a 10-year draw period is about $354 a month. When the 20-year repayment period starts, the payment rises to about $434, because you now repay principal too. If you pay only interest during the draw period, total interest over 30 years is about $96,600.
Tips for using a HELOC wisely
- Pay principal during the draw period if you can; it lowers the later payment and total interest.
- Plan for rate changes. Try the rate 2% higher to see if you could still afford it.
- Use it for value-adding costs like home improvements rather than everyday spending.
- Compare closing costs and annual fees between lenders.
Prefer a fixed payment? Compare a fixed-rate loan, or look at a cash-out option with the refinance calculator.
Last reviewed October 2026.
Frequently asked questions
How much can I borrow with a HELOC?
Most lenders let your total borrowing (mortgage plus HELOC) reach 80% to 90% of your home's value, called the combined loan-to-value or CLTV. Your available credit is that limit minus what you still owe on the mortgage.
How do HELOC payments work?
A HELOC has two phases. During the draw period, often 10 years, you can borrow and many lenders only require interest payments. In the repayment period, often 15 to 20 years, you can no longer borrow and pay back principal plus interest, so payments jump.
Is a HELOC rate fixed?
Usually not. Most HELOCs have a variable rate tied to the prime rate, so your payment can rise or fall. Some lenders let you lock part of the balance at a fixed rate.
HELOC or home equity loan?
A HELOC is a revolving line you draw on as needed, good for ongoing projects. A home equity loan gives a lump sum with a fixed rate and payment, good for one large expense. Both use your home as collateral.
What are the risks?
Your home secures the line, so missing payments can lead to foreclosure. Payment shock at the end of the draw period and rising rates are the most common surprises. Borrow only what you can repay under the higher repayment payment.