Estimate your borrowing power, monthly payments, and total costs for both primary residences and investment properties.
Property & Loan Details
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Enter the current estimated market value of your property. If you are unsure, use a recent appraisal or a free estimate from Zillow or Redfin.
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Enter the total amount you still owe on all mortgages against this property. If you own it free and clear, enter $0.
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HELOC rates are variable and tied to the prime rate (currently ~6.50%). Primary residence HELOCs currently average 7.00%–7.50%. Investment property HELOCs typically run 7.50%–10.00%. Your actual rate depends on your credit score, LTV, and lender. Adjust this slider to model different rate scenarios.
The draw period is how long you can pull funds from the HELOC line. Most HELOCs have a 10-year draw period.
After the draw period ends, you repay both principal and interest over the repayment period. Most lenders offer 10 to 20 years.
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You do not have to borrow the full line. Enter how much you plan to actually draw. Interest accrues only on what you use.
Your Maximum HELOC Credit Line
$140,000
Your Current Equity$200,000 (50.0%)
Your Current LTV50.0%
Amount You Are Drawing$70,000
Draw Period Results
Monthly Interest-Only Payment$423
Draw Period Length10 years
Repayment Period Results
Monthly P&I Payment$553
Repayment Period20 years
Ready to unlock your home equity?
Our team specializes in helping homeowners use their equity as part of a smarter capital stack — not just for renovations. Book a free call to see exactly how much you could access and how to deploy it strategically.
What is a HELOC?
A HELOC (Home Equity Line of Credit) is a revolving line of credit secured by the equity in your home or investment property. Think of it like a credit card backed by your real estate — you borrow what you need, repay it, and borrow again. You only pay interest on what you actually draw.
Unlike a home equity loan, which gives you a lump sum upfront, a HELOC gives you access to a credit line you can tap over time. Most HELOCs have a 10-year draw period followed by a 10-20 year repayment period.
How a HELOC Works — Two Phases
Phase 1: Draw Period (typically 10 years)
During the draw period, you can borrow up to your credit limit whenever you need funds. You only pay interest on what you have drawn. You can repay and redraw as many times as you want. Most lenders allow interest-only minimum payments during this period, which keeps monthly costs low.
Phase 2: Repayment Period (typically 10-20 years)
Once the draw period ends, the line closes. You can no longer withdraw funds. You now pay both principal and interest on the outstanding balance. Monthly payments increase significantly during this phase — often 2-3x the draw period payment. Planning for this transition is critical.
HELOC vs. Home Equity Loan — What is the Difference?
Feature
HELOC
Home Equity Loan
Rate type
Variable (tied to prime rate)
Fixed
How funds are received
Draw as needed up to limit
Lump sum upfront
Interest charged on
Only what you draw
Full loan amount
Draw period
5-10 years (interest-only option)
None — full repayment starts immediately
Best for
Ongoing needs, unknown amounts, flexibility
One-time lump-sum need, fixed monthly budget
Primary Residence HELOC — What You Need to Know
How much can you borrow?
Most lenders allow you to borrow up to 85% of your home's value minus your existing mortgage balance. This is called the Combined Loan-to-Value (CLTV) limit. Example: Home worth $400,000, mortgage balance $200,000. Maximum HELOC = ($400,000 x 85%) - $200,000 = $340,000 - $200,000 = $140,000.
Qualification requirements — primary residence
Minimum credit score: 650-680 (varies by lender; higher scores get better rates)
Maximum CLTV: 85% (some lenders allow up to 90% for strong credit profiles)
Debt-to-income ratio (DTI): Typically under 43%
Stable employment and verifiable income
Clean property title with no unreleased liens
Interest rates — primary residence
As of mid-2026, the national average HELOC rate for primary residences is approximately 7.00%-7.50% APR. Rates are variable and tied to the U.S. prime rate (currently 6.50%). A typical HELOC is priced as prime plus a margin (e.g., prime + 0.50% = 7.00%). Rates adjust periodically — usually monthly — as the prime rate changes.
Down payment or gap financing for an investment property
Business capital for entrepreneurs and investors
Emergency reserves
Investment Property HELOC — What You Need to Know
Is it harder to get a HELOC on a rental or investment property?
Yes. Investment property HELOCs carry stricter requirements than primary residence HELOCs. Lenders consider rental properties higher-risk because borrowers are more likely to default on investment debt before primary residence debt in a financial crisis. Fewer than 30% of major lenders actively offer HELOCs on non-owner-occupied properties.
How much can you borrow on an investment property HELOC?
Most lenders cap the CLTV at 70%-80% for investment properties, compared to 85%-90% for primary residences. This means you need significantly more equity to qualify. Example: Investment property worth $400,000, mortgage balance $200,000. Maximum HELOC at 75% CLTV = ($400,000 x 75%) - $200,000 = $300,000 - $200,000 = $100,000.
Qualification requirements — investment property
Minimum credit score: 700-720 (most lenders; some require 740+)
Maximum CLTV: 70%-80% depending on lender
DTI: Under 43%-50% (some lenders count projected rental income to offset DTI)
Cash reserves: Minimum 6 months of mortgage payments on the subject property
Rental income documentation: Lenders may require a lease, rent rolls, or DSCR of 1.0+
In-person appraisal: Often required for investment properties
Clean title: Hidden or unreleased liens are the leading cause of investment HELOC denials
Interest rates — investment property
Investment property HELOC rates typically run 0.50%-1.50% above primary residence rates, putting most borrowers in the 7.50%-10.00%+ range as of mid-2026. The exact premium depends on your credit score, LTV, property type, and lender. Shopping multiple lenders is especially important for investment property HELOCs because pricing varies significantly.
Common uses for an investment property HELOC
Funding the down payment or rehab costs on a new deal
Paying off high-interest debt to lower DTI before qualifying for new financing
Bridging the gap between a primary lender's loan and the full deal cost
HELOC Red Flags: The Hidden Lien Problem
The most common reason HELOC applications are denied — on both primary and investment properties — is not credit or equity. It is unreleased liens on the title. A lien is any legal claim against the property. Common hidden lien types:
Ghost liens: Old mortgages that were paid off but never formally released from county records. This often happens when loans are sold between servicers.
IRS tax liens: Federal tax debt automatically attaches to all real property you own.
HOA liens: Unpaid homeowner association dues in any amount can block a HELOC.
Mechanic's liens: Filed by contractors for unpaid construction or renovation work.
Child support or judgment liens: Court-ordered financial obligations that attach to property.
Before applying for a HELOC, run a title search through your county Clerk of Court records or a licensed title company. Many denials are preventable with a $150 title search. Lenders also check secondary credit bureaus beyond Equifax, Experian, and TransUnion — ChexSystems and LexisNexis RiskView among them.
HELOC Rates — How They Are Calculated
HELOC rates are tied to the U.S. prime rate, which moves with Federal Reserve decisions. The calculation is:
Your HELOC Rate = Prime Rate + Lender Margin
Example: Prime Rate 6.50% + Margin 0.75% = 7.25% APR
The margin is set when you open the HELOC and stays fixed. Only the prime rate component changes. As of mid-2026, the prime rate is 6.50%. Most HELOC rate caps are 18% lifetime maximum by law in most states, regardless of how much the prime rate rises.
How Gap Funded Uses Your HELOC as a Capital Stack Tool
At Gap Funded, we see a HELOC as Step 2 in what we call the 5-tool capital stack. Here is how it works:
Step 1 — Secure your initial term loan (gap funding / primary debt)
Step 2 — Deploy your HELOC to wipe high-interest revolving credit card debt and reduce your credit utilization to near zero
Step 3 — With utilization gone, your FICO score jumps 40-80 points in a single reporting cycle
Step 4 — Now you qualify for significantly more 0% business credit card stacking
Step 5 — Your total available capital has compounded from a $50,000 ceiling to $500,000+ over 12 months
This is the HELOC strategy that banks don't advertise. They want you to use your equity for a kitchen remodel. We help investors use it to build a war chest for their next deal.
HELOC FAQ
Ready to unlock your home equity?
Our team specializes in helping homeowners use their equity as part of a smarter capital stack — not just for renovations. Book a free call to see exactly how much you could access and how to deploy it strategically.
DISCLAIMER: This calculator is provided for educational and illustrative purposes only. All results are estimates based on the values you enter and standard lender assumptions. Actual HELOC amounts, rates, terms, and qualification requirements vary by lender, property type, location, credit profile, and market conditions.
Gap Funded is not a lender and does not make credit decisions. We do not guarantee that any specific HELOC amount or rate will be available to you. Calculator results do not constitute a loan offer, pre-approval, or commitment to lend. You should consult with licensed mortgage professionals and review actual lender disclosures before making any borrowing decision.
HELOC rates shown are variable and based on the U.S. prime rate as of the date of this publication. Rates change frequently. The prime rate as of mid-2026 is approximately 6.50%. Your rate will be determined by your lender based on your creditworthiness, LTV, and current market conditions.
LTV and CLTV limits used in this calculator are representative of typical lender guidelines as of 2026. Individual lenders may apply different limits. Investment property HELOC availability is more limited than primary residence HELOCs. Not all lenders offer HELOCs on non-owner-occupied properties.
Tax deductibility of HELOC interest depends on how funds are used and current IRS rules. This calculator does not account for tax implications. Consult a qualified tax advisor.
This page does not constitute financial, legal, or investment advice.
