A HELOC lets you borrow against your home's equity twice over: an interest-only draw period (typically 10 years) followed by a fully amortizing repayment period (typically 20 years). On a $50,000 draw at 8.5%, that structure costs roughly $96,639 in total interest — more than a fixed-rate home equity loan on the same amount, because a decade goes by before any principal comes down.
Two different credit products, one form
This calculator actually prices two different things, and it matters which one you're looking at. A home equity line of credit is revolving credit: you draw what you need, pay interest only on the outstanding balance during the draw period, and can re-borrow as you repay. A home equity loan is the opposite of flexible — a single lump sum at a fixed rate, fully amortizing from the first payment, with no draw period and no revolving balance. Interest accrues on the whole amount from month one whether you've spent it or not.
The calculator's two modes share the same equity math but branch completely on the payment math, because the products are genuinely different, not two labels for the same loan. Run identical numbers through both and the gap is large enough to change which one makes sense for you.
Draw period vs. repayment period, in dollars
In HELOC mode, the draw-period payment is interest-only: monthly payment = drawn amount × (rate ÷ 12). On the $50,000 example at 8.5%, that's 50,000 × (0.085 ÷ 12) = $354.17 a month, and none of it touches principal. Over a 10-year draw period that's 354.17 × 120 = $42,500 in interest before the balance has moved by a single dollar.
When the draw period ends, the outstanding $50,000 rolls into a standard 20-year amortizing repayment, and the payment jumps: the fully amortizing payment on $50,000 at 8.5% over 240 months is $433.91. Across the repayment period that's 433.91 × 240 − 50,000 = $54,138.79 in additional interest. Add the two phases together — $42,500.00 draw-period interest plus $54,138.79 repayment-period interest — and the HELOC costs $96,638.79 in total interest on a $50,000 draw, for total repayment of $146,638.79.
| Draw Amount | 7.5% | 8.5% | 9.5% |
|---|---|---|---|
| $25,000 | $156/mo | $177/mo | $198/mo |
| $50,000 | $313/mo | $354/mo | $396/mo |
| $75,000 | $469/mo | $531/mo | $594/mo |
| $100,000 | $625/mo | $708/mo | $792/mo |
Each figure is simply amount × (rate ÷ 12) — no principal is retired during the draw period, so the payment is the same in month 1 and month 120.
That table is the whole draw-period story: it scales linearly with both the amount and the rate because there's no amortization happening yet. It's also why a HELOC feels deceptively cheap in year one and expensive in year eleven — the payment more than doubles the moment repayment starts, even though the rate hasn't changed.
The same $50,000, priced as a fixed loan instead
Switch the calculator to home equity loan mode and the same $50,000 becomes a lump sum, fixed at 8.75% over a 15-year term, amortizing from the first payment. The monthly payment is $499.72 — higher than the HELOC's draw-period payment, because it's already retiring principal. Total interest over 180 months is 499.72 × 180 − 50,000 = $39,950.38, for total repayment of $89,950.38.
Set side by side, the gap is the entire point of comparing the two: the HELOC costs $96,638.79 in interest and the fixed loan $39,950.38 — a difference of $56,688.41 on an identical $50,000 — because the HELOC spends ten years paying interest without reducing principal, then amortizes over twenty more years afterward. That is not a flaw in the HELOC; it is the price of the flexibility to draw only what you need, when you need it, which a fixed lump-sum loan doesn't offer. Whether the trade is worth it depends on how quickly you'd actually repay a HELOC draw in practice — something this calculator can't know and doesn't assume.
The tax question almost every HELOC guide gets wrong
IRS Publication 936 is explicit on this, and the wording is worth quoting exactly: "No matter when the indebtedness was incurred, you can no longer deduct the interest from a loan secured by your home to the extent the loan proceeds weren't used to buy, build, or substantially improve your home."
In plain terms, the deductibility of HELOC interest depends entirely on what you did with the money, not on the fact that your house secures the loan. Draw $50,000 to remodel the kitchen and the interest is deductible, subject to the combined limits below. Draw the same $50,000 to consolidate credit card debt, pay tuition, or buy a car, and the interest on that draw is not deductible — even though it's the identical HELOC, at the identical rate, secured by the identical house. This is the single most common HELOC misconception, and it means the correct answer to "is my HELOC interest deductible" is always "it depends what you used it for," never a flat yes or no.
When the funds do qualify, Publication 936 caps the deduction: interest is deductible on the first $750,000 of combined acquisition debt ($375,000 if married filing separately) — meaning your first mortgage and any qualifying HELOC balance added together, not the HELOC in isolation. Loans from before December 16, 2017 carry a higher $1 million / $500,000 ceiling instead.
Two narrower exceptions push the acquisition-debt ceiling higher for older borrowing. Mortgages taken on or before October 13, 1987 are grandfathered entirely and fall outside the current limits. And a loan under a written binding contract signed before December 15, 2017 — with the purchase closing before January 1, 2018 and completing before April 1, 2018 — is treated as pre-December 16, 2017 debt, which carries the higher $1 million ($500,000 married filing separately) ceiling instead of $750,000. Publication 936 also allows a home under construction to count as a qualified home for up to 24 months, which matters if a draw is funding a build rather than a remodel of a house you already live in.
What this estimate can't see
- ·A market HELOC rate. Freddie Mac's weekly Primary Mortgage Market Survey tracked 30-year fixed mortgages at 6.71% and 15-year fixed at 6.04% for the week ending September 3, 2026 — but that survey covers first-lien fixed-rate purchase mortgages, not HELOCs. HELOC rates are variable, quoted as a margin over the prime rate, and run in a different band entirely. There is no equivalent published weekly HELOC index to anchor a default rate to, which is why this calculator asks for the rate a lender actually quoted you rather than assuming one.
- ·Rate movement during the draw period. The calculator holds your entered rate constant across all 120 (or however many) draw-period months. A real HELOC's rate moves with prime, so the $354.17 payment above is a snapshot, not a promise.
- ·Closing costs, annual fees, and any early-termination or minimum-draw penalties your lender charges — none of those are modeled here.
- ·Discipline during the draw period. Nothing stops a borrower from redrawing against a HELOC as fast as they repay it, which is the real-world way a 10-year interest-only phase can turn into a much longer one.
Methodology
Draw-period figures use monthly payment = drawn amount × (annual rate ÷ 12), interest-only. Repayment-period and home-equity-loan figures use the standard amortization formula on the drawn amount at the entered rate and term. Maximum credit line assumes an 85% combined loan-to-value ceiling. All figures are estimates; your lender's actual terms govern.
Sources
- IRS Publication 936, Home Mortgage Interest Deduction — accessed 2026-09-05
- Freddie Mac Primary Mortgage Market Survey — accessed 2026-09-05