HELOC Calculator for Investors

The Play

Use your HELOC as the down payment and/or rehab funding for a BRRRR investment property. After rehabbing and renting, refinance the investment property (cash-out refi or DSCR loan) and use the refinance proceeds to repay the HELOC. This recycles your home equity into rental properties without selling your primary residence.

Step-by-Step

1. Open HELOC on your primary residence (typically 80–90% combined LTV)
2. Draw funds for down payment + rehab on investment property
3. Purchase and rehab the investment property
4. Rent the property and establish income history
5. Refinance the investment property at its new appraised value (ARV)
6. Use refinance proceeds to repay HELOC balance
7. HELOC is available again for the next deal

Key Risks

• HELOC rates are variable — payments can increase if rates rise
• If the refi falls through or appraisal is low, the HELOC stays drawn
• Your primary residence is collateral — defaulting on the HELOC risks your home
• Lenders can freeze or reduce HELOC limits if your home value drops
• Interest during the draw period is a real cost; factor it into your deal analysis

When HELOC Is Better

• You have a low rate on your first mortgage and don't want to lose it
• You need flexible, revolving access to capital (draw, repay, draw again)
• You plan to repay quickly (HELOC interest cost is lower for short-term use)
• Closing costs are minimal ($0–$500 in many cases) vs. 2–3% for a cash-out refi

When Cash-Out Refi Is Better

• You want a fixed interest rate (HELOCs are variable)
• You plan to hold the debt long-term (30-year fixed is more predictable)
• Your current mortgage rate is already high (the refi might lower your blended rate)
• You need a larger lump sum and are comfortable with higher closing costs