$
What it would sell for
$
$
%
Prime plus your lender’s margin
More options· 10 years interest only, then 20 to repay
years
The draw period
years
0 to keep paying interest only
You could borrow up to
$120,000
85% of your home’s value, less your mortgage: a common lender limit.
- Interest only on $50,000
- $292/mo
- Repaying over 20 years
- $388/mo
- Total interest
- $78,036
What this means
A HELOC is a line of credit secured on your home: you draw what you need and pay interest only on what you’ve used. The rate is variable, so it moves with the prime rate. The prime rate was 7.00% on 23 October 2026 (Federal Reserve).
When the draw period ends, the payment jumps from $292 to $388 a month as you start repaying what you owe. Plan for it from the start. Because your home is the security, you could lose it if you can’t keep up the payments.
How it’s worked out
| 85% of your home’s value | $340,000 |
| Less your mortgage | −$220,000 |
| You could borrow | $120,000 |
Your home
- Mortgage$220,000
- HELOC$50,000
- Equity left$130,000
Assumptions in this estimate
- Lenders set their own limits; 85% of the home’s value is a common one, not a rule.
- The rate stays at 7% throughout; in practice it changes with the prime rate.
- Lenders also check your income, credit and other debts, and may charge appraisal or annual fees.
- HELOC interest is tax-deductible only if you itemize and use the money to buy, build or substantially improve the home that secures it.