A HELOC permits repeated borrowing during its draw period, subject to the entered line and contract. A home equity loan advances a lump sum. Both secure borrowing against the property. This tool models a fixed home equity loan and either a fixed or manually indexed HELOC; the actual lender contract controls rates, payment requirements and access to credit.
Property and borrowing
Modeled capacity is max(0, home value × your CLTV ceiling − first mortgage − other liens). It is a planning ceiling, not an approval. With USD 400,000 value and USD 240,000 debt, 80% allows USD 80,000 additional borrowing and 85% allows USD 100,000. Total secured debt is USD 320,000 at 80%, USD 340,000 at 85%, and USD 360,000 at 90%. Financed fees also consume capacity. Property equity is value minus debt; unused credit is a different quantity. The entered CLTV ceiling and payment ratio are assumptions, not lender eligibility rules. Credit history, income verification, property valuation, lien priority and the actual offer can change the outcome. This calculator does not impose a universal FICO threshold or DTI cutoff. Replace illustrative offers with a lender's actual figures and check whether the stated payment includes taxes, insurance or HOA before entering it. Use the mortgage statement’s principal-and-interest amount, then enter taxes, insurance and HOA separately to avoid double counting.
Term and early payments
P is financed principal, a is the annual note rate as a decimal, r=a/12 and n is the number of monthly payments. M is the scheduled payment before recurring extra payments. When r=0, M=P/n. For USD 12,000 over 120 months at 0%, M=USD 100 and interest is zero. The final payment is clipped to remaining debt; fees and dated early-payment charges remain separate. Cash fees are paid separately at inception. Withheld fees reduce proceeds without reducing principal. Financed fees increase principal and the payment. USD 12,000 with USD 600 fees therefore yields USD 11,400 net if withheld, or USD 12,600 principal if financed. A dated prepayment fee occurs on that event date, not automatically at origination. Compare net proceeds, total fees, remaining debt and cash paid at the same horizon. A HELOC permits repeated borrowing during its draw period, subject to the entered line and contract. A home equity loan advances a lump sum. Both secure borrowing against the property.
Optional tax illustration
Published IRS Publication 936(2025) discusses itemized deductions for qualified secured home debt, including qualifying use and debt limits. Filing status, loan history, other mortgages and mixed use can affect the deductible share, so a purpose selection alone does not establish eligibility. Verify your filing year separately; the optional calculation uses only your verified share and assumed marginal rate, with no automatic tax benefit. Optional illustration: actual interest paid in the first twelve billing cycles × your verified deductible share × your assumed tax rate. IRS Publication 936 (2025) describes itemizing, qualified use and debt limits; this is not a tax-return calculation or confirmation of a later tax year. U.S. planning assumptions, verified against the linked source descriptions on 2026-10-18. Day count, reset cadence, payment recast and fee timing are model inputs, not universal requirements of Regulation Z. IRS Publication 936(2025) is guidance for 2025 returns; no later-year eligibility is inferred. No tax benefit is included.
Project and consolidation assumptions
Borrowing against a home can put the property at risk if payments are missed. Falling home values can leave negative equity even when credit was previously available. A lower monthly payment can result from a longer term and does not establish lower financing cost. Consolidating card debt changes collateral risk; the comparison does not guarantee savings, approval or a future resale price. Added resale value is your scenario, not an appraisal. Project financing uses a separate loan sized to the project cost at the entered rate, term and fees. Project cost is counted once; tax and future market gains are excluded. A blank card payment uses the greater of USD25, 2% of initial balance, or 1% plus first-month interest, capped at that balance and held constant. Zero debt has no payment. Ending debt and closing fees are included; first recovery does not guarantee later savings. During draw, choose interest-only, principal-and-interest, extra payments, or explicit interest capitalization.
Comparison offers; illustrative until replaced
Ask the lender for the applicable rate, fees, remaining term, payment convention, draw restrictions, prepayment charges and required disclosures. Timing, documentation and cancellation rights depend on the transaction and applicable rules; this model does not decide them. Compare offers with equal net proceeds and a common horizon rather than selecting a product solely from its advertised payment. Compare cash paid plus debt left, less unused cash held for later planned needs. All rows use the same horizon and net funding. Upfront alternatives hold future-use cash at zero return. A cash-out refinance replaces the entire first mortgage. Enter the existing mortgage note rate and remaining term or actual principal-and-interest payment to model its cash and balance. Cash-out refinancing is unavailable until those details are supplied; additive-loan rows exclude the unchanged first mortgage. Calculations run in this browser. Links require your review and confirmation. Local draft saving is optional; project labels are excluded from reports and links by default.