Heloc Payment Calculator

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heloc payment calculator
Interest-Only (Draw Period)Principal + Interest (Repayment Period)
Results:
Estimated Monthly Payment = $0.00
function calculateResult(){var balance = parseFloat(document.getElementById('balance').value);var rate = parseFloat(document.getElementById('rate').value);var term = parseFloat(document.getElementById('term').value);var type = document.getElementById('calc_type').value;var showSteps = document.getElementById('steps').checked;if(isNaN(balance)||isNaN(rate)||balance<=0||rate<=0){alert('Please enter valid positive numbers for balance and interest rate');return;}var monthlyRate = (rate / 100) / 12;var payment = 0;var infoText = "";if(type === "interestOnly"){payment = balance * monthlyRate;infoText = "This is an interest-only payment. Your principal balance will not decrease.";}else{if(isNaN(term)||term<=0){alert('Please enter a valid repayment term in years');return;}var totalMonths = term * 12;payment = balance * (monthlyRate * Math.pow(1 + monthlyRate, totalMonths)) / (Math.pow(1 + monthlyRate, totalMonths) – 1);infoText = "This is a principal and interest payment over " + term + " years.";}document.getElementById('resultValue').innerHTML = payment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});document.getElementById('extraInfo').innerHTML = infoText;if(showSteps && type === "principalInterest"){var totalPaid = payment * (term * 12);var totalInterest = totalPaid – balance;document.getElementById('extraInfo').innerHTML += "

Total Payments: $" + totalPaid.toLocaleString(undefined, {maximumFractionDigits:2}) + "
Total Interest: $" + totalInterest.toLocaleString(undefined, {maximumFractionDigits:2});}}

How to Use the HELOC Payment Calculator

A Home Equity Line of Credit (HELOC) is a flexible financial tool that allows homeowners to borrow against the equity in their homes. Unlike a traditional home equity loan, a HELOC functions more like a credit card with a revolving balance. This heloc payment calculator helps you estimate your monthly obligations during both the draw period and the repayment period.

To get started, enter the following details into the tool:

Calculation Method
Choose "Interest-Only" if you are currently in the draw phase (usually the first 10 years). Choose "Principal + Interest" if you are in the repayment phase or want to see what full payments would look like.
Current HELOC Balance
The amount of money you have currently borrowed from your credit line.
Interest Rate (APR)
The annual percentage rate charged by your lender. HELOC rates are typically variable and tied to the U.S. Prime Rate.
Repayment Term
The number of years you have to pay back the full balance (usually 10 to 20 years).

How HELOC Payments are Calculated

HELOCs consist of two distinct phases, and our heloc payment calculator accounts for both. During the Draw Period, most lenders only require you to pay the interest on the amount you've used. During the Repayment Period, you can no longer withdraw funds, and you must pay back both the principal and the interest.

The formula for an interest-only monthly payment is simple:

Monthly Payment = Balance × (Annual Rate ÷ 12)

For the repayment phase, we use the standard amortization formula:

Payment = P [ i(1 + i)^n ] ÷ [ (1 + i)^n – 1 ]

  • P: Principal balance
  • i: Monthly interest rate (APR / 12)
  • n: Total number of months in the repayment term

HELOC Calculation Examples

Scenario 1: Draw Period (Interest-Only)

Imagine you have used $50,000 of your credit line for a kitchen remodel. Your bank offers an APR of 8%. During the draw period, your payment is calculated as follows:

  1. Balance = $50,000
  2. Monthly Interest Rate = 0.08 ÷ 12 = 0.006667
  3. Calculation: $50,000 × 0.006667
  4. Monthly Interest-Only Payment = $333.35

Scenario 2: Repayment Period (Principal + Interest)

If that same $50,000 balance enters a 20-year repayment phase at the same 8% interest rate, the payment jumps significantly because you are now paying down the debt:

  1. Balance = $50,000
  2. Term = 20 years (240 months)
  3. Rate = 8% (0.006667 monthly)
  4. Monthly P+I Payment = $418.22

Important HELOC Considerations

Variable Interest Rates

Most HELOCs have variable rates. This means your payment can change monthly if the Prime Rate changes. Our heloc payment calculator provides a snapshot based on the rate you enter today, but it is wise to test higher rates to see how a "rate shock" might affect your budget.

The Payment Cliff

The "payment cliff" occurs when the draw period ends and the repayment period begins. Because you are suddenly required to pay back the principal, your monthly bill can double or triple. Using this calculator early allows you to plan for that transition or consider refinancing options before the draw period expires.

Annual Fees and Closing Costs

While this calculator focuses on the monthly payment, remember that HELOCs often come with annual membership fees (typically $50-$100) and potential closing costs like appraisal fees and title searches. Always check your loan disclosure for these additional expenses.

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