How this calculation works
At the start of each draw month, the advance increases the balance before interest is calculated. Paying that interest each month keeps the draw balance equal to the opening balance plus advances. The repayment phase adds principal repayment.
Credit ceiling = property value × combined LTV ceiling − other liens. Amortize the balance after the final draw.A worked example
A 400,000 property at an entered 80% combined ceiling with 200,000 in other liens gives 120,000 of modeled credit. The 22,000 drawn balance needs 183.33 per month over 120 months in the zero-rate repayment example.
Good to know
Entered rates remain fixed within each phase. Variable-rate changes, annual fees, minimum draw amounts and underwriting are outside the model.
Reference: CFPB HELOC overview (opens in a new tab) ↗
How the inputs affect the result
Compare the last interest-only payment with the first amortizing payment. A payment increase can happen even when the rate stays the same because the second payment also reduces principal.
A repayment-rate increase shows how cash flow can change when draws end.
Where the calculation applies
Entered rates remain fixed within each phase. Variable-rate changes, annual fees, minimum draw amounts and underwriting are outside the model.
For a related calculation, see the Loan prepayment comparison calculator.
Read more: CFPB HELOC overview (opens in a new tab) ↗
A few questions, answered
What if the planned draws exceed the modeled credit limit?
The tool flags the advance field. Reduce the opening balance or planned draws, or update your stated property value and credit terms.
What does the “Repayment rate rises to 9%” setting illustrate?
A repayment-rate increase shows how cash flow can change when draws end.