HELOC Interest Cost Calculator

How HELOC friction differs from a refinance

A HELOC usually sits behind (or beside) a first mortgage and lets you draw as needed. Interest often focuses on the drawn balance during a draw period, and indexes can move.

That structure is different from a cash-out refinance, which replaces the first lien. Closing-cost and break-even logic therefore diverge — run both educational tools when you are undecided.

How to use this calculator

Enter the balance you expect to keep drawn and the APR that applies to that draw. Treat the output as a snapshot of interest cost for a constant balance — then layer annual fees from your disclosure.

If you only need a one-time lump sum, compare against personal-loan true cost and refinance break-even. If you need flexible draws, the HELOC interest path matters more.

Worked example

A $40,000 drawn HELOC at 9.5% APR costs roughly $3,800 per year in interest if the balance stays fully drawn ($40,000 × 0.095), or about $317 per month on an interest-focused basis.

If you instead expect to draw $40,000 for six months and repay quickly, annualize carefully: six months of interest is nearer $1,900 in this illustration — still real friction, but not a perpetual $3,800.

Add a $75 annual fee and any draw or inactivity fees from the fee schedule. Those fixed costs matter more when average drawn balances are small.

HELOC vs cash-out refinance

HELOCs keep the first mortgage intact; cash-out refinances replace it. Fees, closing costs, and lien priority are product-specific — read the HELOC-vs-refinance guide before treating either path as “obvious.”

Variable indexes can change the APR mid-stream. Re-run snapshots when your margin or index resets.

Assumptions

• Constant drawn balance for the interest snapshot (no amortization schedule unless you model paydown yourself).
• APR held fixed for the scenario; variable indexes may differ in reality.
• Annual/maintenance fees not auto-included — add them from disclosures.
• No tax deductibility determination.
• Not a credit offer, appraisal, or underwriting result.

Related guides

Deeper explainers that sit behind this calculator’s math:

• HELOC vs Cash-Out Refinance: Different Friction, Different Math — When interest-only HELOC draws differ from replacing a first mortgage — without a sales pitch.
• Home Equity Friction: Fees Beyond the Advertised APR — Origination, appraisal, annual fees, and variable indexes — the costs that sit beside HELOC rates.