{
  "slug": "home-equity-loan-vs-heloc-calculator",
  "title": "Home Equity Loan vs HELOC Calculator",
  "heading": "Home Equity Loan vs HELOC Cost Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/home-equity-loan-vs-heloc-calculator",
  "summary": "Fixed second mortgage or a variable line — which costs less for your draw.",
  "description": "Both products borrow against the same equity, but they price risk differently. A home equity loan gives a fixed rate and a fixed amortizing payment across the whole balance from day one. A HELOC gives a variable rate tied to prime, an interest-only draw period of usually ten years, then a repayment period where the payment jumps sharply. This calculator prices both over the horizon you plan to keep the debt, using your available equity, the amount you actually need, and each product's rate. Because a HELOC only charges interest on what you draw, it wins for staged spending like a renovation paid in phases; the fixed loan usually wins for a single lump need in a rising-rate environment. The tool also reports your combined loan-to-value ratio, since most lenders stop at 80-85% CLTV and price sharply higher above that line.",
  "formula": "Fixed Loan Cost = Payment × Months − Principal. HELOC Cost = Draw × Rate × Draw Years + amortized repayment interest.",
  "dateModified": "2026-09-06",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=home-equity-loan-vs-heloc-calculator",
  "inputs": [
    {
      "id": "homeValue",
      "label": "Home value",
      "kind": "number",
      "hint": null,
      "default": 520000,
      "unit": "$",
      "min": 50000,
      "max": 5000000
    },
    {
      "id": "mortgageBalance",
      "label": "First mortgage balance",
      "kind": "number",
      "hint": null,
      "default": 290000,
      "unit": "$",
      "min": 0,
      "max": 5000000
    },
    {
      "id": "borrow",
      "label": "Amount you need",
      "kind": "number",
      "hint": null,
      "default": 60000,
      "unit": "$",
      "min": 1000,
      "max": 1000000
    },
    {
      "id": "loanRate",
      "label": "Home equity loan rate (fixed)",
      "kind": "number",
      "hint": null,
      "default": 8.4,
      "unit": "%",
      "min": 1,
      "max": 20
    },
    {
      "id": "helocRate",
      "label": "HELOC rate (variable today)",
      "kind": "number",
      "hint": null,
      "default": 8.9,
      "unit": "%",
      "min": 1,
      "max": 20
    },
    {
      "id": "years",
      "label": "Years you'll carry the debt",
      "kind": "number",
      "hint": null,
      "default": 10,
      "unit": "years",
      "min": 1,
      "max": 30
    },
    {
      "id": "drawPct",
      "label": "Average HELOC balance drawn",
      "kind": "number",
      "hint": null,
      "default": 60,
      "unit": "% of limit",
      "min": 5,
      "max": 100
    }
  ],
  "outputs": [
    {
      "id": "savings",
      "label": "Interest difference between the two",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "loanInterest",
      "label": "Home equity loan total interest",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "helocInterest",
      "label": "HELOC total interest",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "loanPayment",
      "label": "Fixed loan monthly payment",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "cltv",
      "label": "Combined loan-to-value",
      "format": "percent",
      "hint": null,
      "primary": false
    },
    {
      "id": "availableEquity",
      "label": "Equity available at 85% CLTV",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Home value: 520000 $",
      "First mortgage balance: 290000 $",
      "Amount you need: 60000 $",
      "Home equity loan rate (fixed): 8.4 %",
      "HELOC rate (variable today): 8.9 %",
      "Years you'll carry the debt: 10 years",
      "Average HELOC balance drawn: 60 % of limit"
    ],
    "outputs": [
      "Interest difference between the two: $3,155",
      "Home equity loan total interest: $28,885",
      "HELOC total interest: $32,040",
      "Fixed loan monthly payment: $741",
      "Combined loan-to-value: 67.3%",
      "Equity available at 85% CLTV: $152,000"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter home value ($).",
      "Enter first mortgage balance ($).",
      "Enter amount you need ($).",
      "Enter home equity loan rate (fixed) (%).",
      "Enter heloc rate (variable today) (%).",
      "Enter years you'll carry the debt (years).",
      "Enter average heloc balance drawn (% of limit).",
      "Read your interest difference between the two on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "homeValue": 310000,
        "mortgageBalance": 175000,
        "borrow": 36000,
        "loanRate": 5.04,
        "helocRate": 5.34,
        "years": 6,
        "drawPct": 35
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "homeValue": 520000,
        "mortgageBalance": 290000,
        "borrow": 60000,
        "loanRate": 8.4,
        "helocRate": 8.9,
        "years": 10,
        "drawPct": 60
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "homeValue": 830000,
        "mortgageBalance": 465000,
        "borrow": 96000,
        "loanRate": 13.440000000000001,
        "helocRate": 14.240000000000002,
        "years": 16,
        "drawPct": 95
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "Which is safer if rates rise?",
      "a": "The fixed home equity loan. A HELOC repices with prime, and borrowers who drew heavily in a low-rate period have seen payments climb by hundreds of dollars a month."
    },
    {
      "q": "Why does average drawn balance matter?",
      "a": "A HELOC charges interest only on what is outstanding. If you draw in stages for a renovation, your average balance can be far below the limit, which is where the line beats a lump-sum loan."
    },
    {
      "q": "What CLTV do lenders allow?",
      "a": "Most cap combined loan-to-value at 80-85%, and pricing worsens as you approach the cap. The tool shows where your request lands."
    },
    {
      "q": "Is the interest tax deductible?",
      "a": "Only when the proceeds substantially improve the home that secures the loan, and only if you itemize. Debt consolidation and tuition uses do not qualify under current rules."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/refinance-break-even-calculator"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Home Equity Loan vs HELOC Calculator (https://www.revenuelab.fyi/toolbox/home-equity-loan-vs-heloc-calculator)"
}