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Affordability Tool

HELOC Affordability

Understand if you can afford a HELOC. Analyze your debt-to-income ratio, see your maximum HELOC amount, and visualize budget impact.

✅ You Can Afford This HELOC

Your DTI stays within limits (36.7% max) and meets LTV requirements.

Current DTI
Before HELOC
31.3%

$2,500 / $8,000

Excellent
Draw Period DTI
With HELOC (interest-only)
35.7%

$2,854 / $8,000

Within Limits
Repayment DTI
After draw period ends
36.7%

$2,934 / $8,000

Within Limits

Maximum by DTI

$132,706

Based on 43% DTI limit

Maximum by LTV

$100,000

Based on 80% LTV limit

Your Maximum

$100,000

✓ Within limit

Payment Shock Analysis
How your monthly payment will change

Initial Increase (Draw Period)

+$354

From $2,500 to $2,854

This is the interest-only payment on your HELOC during the first 10 years.

Additional Increase (Repayment Period)

+$80

From $2,854 to $2,934

When the draw period ends, you'll start paying principal + interest on the HELOC.

Payment Timeline

Current (no HELOC)$2,500/mo
Years 1-10 (Draw Period)$2,854/mo
Years 11-30 (Repayment)$2,934/mo
Monthly Budget Impact
How HELOC affects your monthly cash flow

Current Budget

Debt Payments$2,500
31.3% of income
Remaining for Living Expenses$5,500
68.8% of income

With HELOC (Draw Period)

Debt Payments + HELOC$2,854
35.7% of income
Remaining for Living Expenses$5,146
64.3% of income

With HELOC (Repayment Period)

Debt Payments + HELOC$2,934
36.7% of income
Remaining for Living Expenses$5,066
63.3% of income

Impact Summary: Your remaining monthly income will decrease from $5,500 to $5,146 during the draw period, and to $5,066 during repayment.

Income & Debts

Car loans, credit cards, student loans, etc.

Property Info
HELOC Terms

Typical: 43% for most lenders

Understanding HELOC Affordability

Before taking out a HELOC, it's crucial to understand how it will affect your monthly budget and whether you can comfortably afford the payments, especially when the draw period ends.

Key Metrics Explained:

  • Debt-to-Income (DTI) Ratio: The percentage of your monthly gross income that goes toward debt payments. Most lenders require DTI below 43%.
  • Maximum HELOC by DTI: The largest HELOC you can afford based on your income and existing debts while staying within DTI limits.
  • Maximum HELOC by LTV: The largest HELOC based on your home value and existing mortgage (typically 80-90% LTV).
  • Payment Shock: The increase in your monthly payment when transitioning from the draw period to the repayment period.

Beware of Payment Shock

Many borrowers are surprised when their HELOC payment increases significantly after the draw period ends. Plan ahead to ensure you can afford the higher repayment period payment.

Tips for HELOC Affordability

  • Keep your DTI below 36% for better financial flexibility
  • Plan for rate increases - HELOCs have variable rates
  • Build an emergency fund before taking out a HELOC
  • Consider your ability to afford the repayment period payment

Ready to Apply?

Connect with a HELOC expert who can help you find the right HELOC for your budget and financial goals.

Get Pre-Qualified