Second lien calculator

This tool is designed to compare two different HELOC products. Often HELOCs look simple but have different fees. You can also use this to compare a HELOC to a second mortgage but be aware that it does not calculate equity which is a key difference between HELOCs and fixed second mortgages.

Enter the amount, rate and closing costs and see what the interest only payment is, and also the amortized payment is – HELOCs typically have a draw period where they are interest only and an amortized period where you pay both principal and interest. To see equity, scroll through the amortization table at the bottom. You can see how with an interest only loan your balance stays the same for the interest only period, whereas with a fixed, amortized second mortgage, your balance is paid down as you go.

What this tool DOES NOT do: because HELOCs typically have adjustable rates and also sometimes “teaser rates” where the rate is low for the initial period and then jumps up, this calculator can’t take into account future rate changes, simply because no one knows where rates will go in the future. So when getting a HELOC, consider that the rate might change.

To compensate for not knowing the future, you can play around with different rates and see how your payment would change according. For example, if your teaser rate is 7% but after the initial period it jumps to 8%, you can enter 7% in the first scenario and 8% in the second scenario to compare how your rate may impact your payments.

Here’s an article on HELOCs if you want to learn more about this type of financing.

If you have any questions, feel free to text me at 917-650-0167 or email nicole@homeownering.com.