Heloc Calculator

A HELOC (home equity line of credit) is one of the cheapest ways to borrow money, because your house backs it. But 'cheap' hides a structure no other common loan has: a draw period of interest-only payments where the balance never falls, followed by a repayment period that suddenly amortizes the whole thing — principal and interest — over whatever years are left. The payment can jump sharply the day the draw period ends, and because the line is secured by your home, missing it risks the house, not just whatever the money bought. This lesson races the HELOC's real monthly payment against what the same balance would cost if it amortized from day one, showing that the interest-only period isn't free — it costs real lifetime interest — before turning to the question that actually decides whether tapping your equity was smart: was what you bought with it worth more than the interest?

Free and interactive — no sign-up, nothing to install. Read the full lesson for the plain-language explanation.