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HELOC (Home Equity Line of Credit) Payment Calculator

Interest-Only (Draw Period) Principal + Interest (Repayment Period)

Estimated Monthly Payment

function calculateHelocPayment() { var drawAmount = parseFloat(document.getElementById('drawAmount').value); var apr = parseFloat(document.getElementById('interestRate').value); var phase = document.getElementById('paymentPhase').value; var term = parseFloat(document.getElementById('repaymentTerm').value); var resultDiv = document.getElementById('helocResult'); var paymentText = document.getElementById('monthlyPaymentText'); var detailDiv = document.getElementById('paymentDetails'); if (isNaN(drawAmount) || isNaN(apr) || drawAmount <= 0 || apr <= 0) { alert("Please enter valid positive numbers for Draw Amount and Interest Rate."); return; } var monthlyRate = (apr / 100) / 12; var monthlyPayment = 0; if (phase === "interestOnly") { monthlyPayment = drawAmount * monthlyRate; detailDiv.innerHTML = "Phase: Interest-Only Draw PeriodDuring this phase, you are only paying the interest accrued on your balance. Your principal remains unchanged unless you choose to make extra payments."; } else { if (isNaN(term) || term <= 0) { alert("Please enter a valid repayment term in years."); return; } var numberOfPayments = term * 12; monthlyPayment = (drawAmount * monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1); var totalInterest = (monthlyPayment * numberOfPayments) – drawAmount; detailDiv.innerHTML = "Phase: Full Repayment PeriodRepayment Term: " + term + " yearsTotal Interest Paid: $" + totalInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "This payment covers both interest and principal until the balance is paid off."; } paymentText.innerHTML = "$" + monthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); resultDiv.style.display = "block"; }

Understanding Your HELOC Payments

A Home Equity Line of Credit (HELOC) is a revolving credit line that uses your home's equity as collateral. Unlike a traditional home equity loan, which provides a lump sum with fixed payments, a HELOC allows you to borrow as needed and typically features variable interest rates.

The Two Phases of a HELOC

Most HELOCs are structured into two distinct periods that significantly change your monthly obligations:

• The Draw Period: Usually lasting 5 to 10 years, this is when you can access your funds. Most lenders require only interest-only payments during this time. While your monthly payment is lower, you aren't reducing the debt balance unless you pay extra.
• The Repayment Period: Once the draw period ends (typically after 10 years), you can no longer withdraw funds. You must now pay back both the principal and the interest, usually over a 10 to 20-year term. This often results in a significant "payment shock" as monthly costs rise sharply.

How to Use This Calculator

To get an accurate estimate of your costs, follow these steps:

1. Current Draw Amount: Enter the amount you have currently borrowed or plan to borrow from your line of credit.
2. Interest Rate (APR): HELOCs usually have variable rates tied to the Prime Rate. Enter your current rate here.
3. Select Your Phase: Choose "Interest-Only" to see your minimum cost during the draw period, or "Repayment" to see what your full amortized payment will look like later.
4. Repayment Term: Only relevant for the repayment phase, this is the number of years you have to fully pay off the debt.

Example HELOC Scenario

Imagine you have a $50,000 balance on your HELOC with an 8.5% APR.

• In the Draw Period (Interest-Only): Your monthly payment would be approximately $354.17.
• In the Repayment Period (20 Years): Your monthly payment would jump to approximately $433.91 to ensure the principal is paid off by the end of the term.

SEO Tip: Since HELOC rates are variable, it is wise to calculate your payment using a rate 1-2% higher than current market rates to see if your budget can handle potential future increases.

Factors That Influence Your HELOC Rate

Your specific interest rate is determined by several factors, including your credit score, your combined loan-to-value (CLTV) ratio, and the current Federal Reserve benchmarks. Maintaining a high credit score and keeping your home equity above 20% are the best ways to secure the lowest possible HELOC rates.