This is an illustrative payment estimate only — not a loan offer, quote, pre-qualification, or guarantee. A HELOC is typically a variable-rate line of credit, often interest-only during an initial draw period before converting to a fully amortizing repayment period — this calculator uses a fixed rate you enter for simplicity, so it won't capture a rate that changes over time. Construction loans and cash-out refinances are usually fixed-rate and amortizing, closer to what the "Fixed-rate" mode shows. Actual rates, terms, fees and qualification depend entirely on your lender and your financial picture. See our guides on cash-out refinance vs. HELOC and HELOC vs. construction loan, and talk to a licensed lender for real numbers.
How to read these numbers
Fixed-rate (principal + interest) mode shows a standard amortizing loan payment — the same payment every month, split between paying down principal and interest, until the loan is paid off at the end of your chosen term. This is how most construction loans and cash-out refinances work.
Interest-only mode shows what you'd pay monthly if you're only covering the interest charge, which is common during a HELOC's initial draw period. The catch: interest-only payments don't reduce what you owe — the full loan amount is still outstanding until you start paying down principal, refinance, or sell.
Fixed-rate vs. variable-rate — a real gap in this calculator
Most HELOCs carry a variable rate tied to an index like the prime rate, meaning your actual rate — and payment — can move up or down over the life of the loan. This calculator asks for a single rate and holds it constant for the whole term, which makes the math transparent but means it can't show you how a HELOC payment might change if rates move. Ask your lender about rate caps, adjustment frequency, and what your payment looks like at both the current rate and a stress-tested higher rate before committing.
Use this to compare scenarios, not to shop for a rate
This tool is most useful for seeing how your payment changes if you borrow $20,000 less, choose a 15-year term instead of a 30-year term, or compare a fixed-rate estimate against an interest-only one. For an actual rate, term and qualification, a licensed lender needs your full financial picture — this calculator doesn't collect or see any of your information.
Frequently asked questions
Probably not — most HELOCs are variable-rate. This calculator holds your entered rate constant so you can compare scenarios cleanly, but your actual HELOC payment can change as the underlying index moves. Ask your lender about rate caps and how your payment is recalculated after any draw period ends.
It varies by lender and loan product. A licensed lender can tell you exactly what you qualify for based on your income, credit history and available home equity — that's not something this calculator estimates.
It depends on your existing mortgage rate, how much equity you have, and how the loan needs to be structured around your build timeline. See our HELOC vs. construction loan guide and cash-out refinance vs. HELOC guide for how the tradeoffs compare.
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