HELOC Payment Calculator
Draw Period (Interest Only)
Repayment Period (20 Years P+I)
Repayment Period (15 Years P+I)
Repayment Period (10 Years P+I)
Estimated Monthly Payment: $0.00
Understanding HELOC Payments
A Home Equity Line of Credit (HELOC) is a flexible revolving credit line secured by your home's equity. Unlike a standard home equity loan, the payments vary based on your current balance and the fluctuating interest rate.
Draw Period vs. Repayment Period
Most HELOCs consist of two distinct phases:
- Draw Period: Typically the first 10 years. During this time, you can withdraw funds as needed. Most lenders only require interest-only payments, though you can choose to pay down the principal at any time.
- Repayment Period: Usually the following 10 to 20 years. You can no longer withdraw money, and your monthly payment will increase significantly because it now includes both principal and interest (P+I).
How the Calculation Works
Interest-only payments are calculated using the formula: (Balance × Annual Rate) / 12. For the repayment phase, we use the standard amortization formula to ensure the balance reaches zero by the end of the term. Because HELOCs have variable rates, your actual payment may change month-to-month as the prime rate fluctuates.
Example Calculation
If you have a $50,000 balance at an 8.5% interest rate:
- During Draw Period (Interest Only): Your payment would be approximately $354.17 per month.
- During Repayment (20-Year Term): Your payment would jump to approximately $433.91 per month to cover the principal.