A home equity loan and HELOC comparison calculator shows how monthly payments differ between an amortizing home equity loan and an interest-only home equity line of credit on the same loan amount.
The amount you're borrowing against your home's equity.
The annual rate used for both the home equity loan and HELOC comparison.
Your target repayment term, in months.
Used to estimate the after-tax cost of the interest you pay. Home equity interest may be deductible when funds are used to buy, build, or substantially improve your home.
Models how a future rate adjustment on a variable-rate HELOC would affect your payment. Applied halfway through the term.
Initial monthly payment · paid off by month 48
Initial monthly payment · $37,000 still owed at the end
How the amortizing home equity loan payment compares with the interest-only HELOC payment on the same loan amount.
These results are estimates, not predictions. They're calculated from the figures you entered and assume your rate of return and inflation rate hold steady every year, which real markets don't do. Change any input and the result changes. Use this to compare scenarios, not to plan around a specific number.
Enter your loan amount, interest rate, months to pay off, and your combined state and federal tax rate. You can also enter a predicted rate change. The calculator shows your initial monthly payment for both options and a full payment schedule for each.
Loan amount is the amount you're borrowing against your home's equity.
Interest rate is the annual rate used for both the home equity loan and HELOC comparison.
Months to pay off is your target repayment term.
Your combined state and federal tax rate is used to estimate the after-tax cost of the interest you pay. Home equity interest may be tax-deductible when the funds are used to buy, build, or substantially improve your home, though rules vary, so this isn't a substitute for tax advice.
Predicted rate change lets you model how a future rate adjustment on a variable-rate HELOC would affect your payment, if you expect rates to move before your term ends.
A home equity loan amortizes: each payment covers both interest and principal, so your balance steadily declines and reaches zero by the end of your term. A HELOC in this comparison is treated as interest-only for the full period: your payment covers interest on the full balance only, so the principal never decreases, and you'd still owe the entire original amount at the end of the term unless you pay it down separately.
On a $37,000 balance at 2.60% over 48 months, the home equity loan's initial monthly payment is about $812, fully paying off the loan by month 48. The HELOC's interest-only payment on the same balance is about $80 a month, but the full $37,000 principal is still owed at the end of the term.
A fiduciary financial advisor can help you decide whether an amortizing home equity loan or an interest-only HELOC fits your repayment goals and cash flow. Matching with an advisor is free and comes with no pressure to commit.
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