A Home Equity Line of Credit (HELOC) is a revolving credit line secured by your home, similar to a credit card. It allows you to borrow funds as needed up to a certain limit. HELOCs typically have a draw period (when you can borrow and make interest-only payments) followed by a repayment period (when you must repay the principal and interest).
This calculator helps you estimate the monthly payment during the repayment period. The calculation is based on the outstanding HELOC balance, the annual interest rate, and the remaining loan term.
How the Calculation Works
The formula used to calculate the monthly payment for a HELOC during its repayment phase is the standard annuity payment formula, which amortizes the loan over its term:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment (principal and interest)
P = The principal loan amount (the total amount you borrowed)
i = Your monthly interest rate (annual rate divided by 12)
n = The total number of payments over the loan's lifetime (loan term in years multiplied by 12)
Example Calculation
Let's say you have a HELOC with the following details:
HELOC Amount (P): $50,000
Annual Interest Rate: 7.5%
Loan Term: 10 years
First, we convert the annual interest rate to a monthly rate (i):
i = 7.5% / 12 = 0.075 / 12 = 0.00625
Next, we calculate the total number of payments (n):
So, the estimated monthly payment for this HELOC during the repayment period would be approximately $593.51.
Important Considerations
Variable Rates: HELOC interest rates are often variable, meaning your monthly payment can change over time as market rates fluctuate.
Draw vs. Repayment Period: This calculator estimates payments during the repayment period. During the draw period, payments might be interest-only, which would be lower but wouldn't reduce your principal balance.
Fees: HELOCs may come with various fees (origination, appraisal, annual fees) that are not included in this payment calculation.
Accuracy: This is an estimate. Consult with your lender for precise payment details.
function calculateHELOCPayment() {
var principal = parseFloat(document.getElementById("helocAmount").value);
var annualRate = parseFloat(document.getElementById("annualInterestRate").value);
var termYears = parseFloat(document.getElementById("loanTermYears").value);
var paymentResultElement = document.getElementById("paymentResult");
if (isNaN(principal) || isNaN(annualRate) || isNaN(termYears) || principal <= 0 || annualRate < 0 || termYears 0) {
monthlyPayment = principal * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
} else {
// If rate is 0, payment is just principal divided by number of payments
monthlyPayment = principal / numberOfPayments;
}
paymentResultElement.textContent = "$" + monthlyPayment.toFixed(2);
}