HELOC Payment Calculator
Estimate your monthly payments during draw and repayment periods.
Draw Period (Interest Only)
Repayment Period (P + I)
Estimated Monthly Payment:
$0.00
Annual Interest Cost:
$0.00
Total Interest (Over Term):
$0.00
Understanding Your HELOC Payments
A Home Equity Line of Credit (HELOC) functions differently than a standard home loan. It typically consists of two distinct phases: the Draw Period and the Repayment Period.
1. The Draw Period
During the draw period (usually the first 5 to 10 years), you can borrow against your limit as needed. Most lenders only require interest-only payments during this time. While this keeps monthly costs low, it does not reduce your principal balance.
Example: If you have a $50,000 balance at an 8.5% interest rate during the draw period, your interest-only payment would be approximately $354.17 per month.
2. The Repayment Period
Once the draw period ends, you can no longer borrow money. You enter the repayment period (often 10 to 20 years), where you must pay back both the principal and the interest. This causes a significant jump in your monthly payment.
How to Use This Calculator
- Outstanding Balance: Enter the amount you have actually spent/borrowed from your line of credit.
- Interest Rate: HELOCs usually have variable rates. Enter the current APR provided by your lender.
- Payment Phase: Choose "Draw Period" to see interest-only costs, or "Repayment Period" to see the full amortized payment.
HELOC Payment Formula
For interest-only payments, the formula is: (Balance × (APR / 100)) / 12.
For the repayment period, we use the standard amortization formula: P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ], where i is the monthly interest rate and n is the total number of months.