A Home Equity Line of Credit (HELOC) is a revolving line of credit secured by your home's equity. It functions similarly to a credit card, allowing you to borrow funds up to a certain limit, pay them back, and borrow again during a "draw period." After the draw period, you enter a "repayment period" where you must pay back the principal and interest.
This calculator helps you estimate the monthly payment during the repayment period. The calculation is based on the total amount borrowed (your HELOC amount), the annual interest rate, and the length of the repayment term.
How the Calculation Works
The monthly payment for a HELOC during the repayment period is typically calculated using the standard annuity formula for loan amortization. The formula used is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment
P = The principal loan amount (the HELOC 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 (Repayment Period): 10 years
First, we convert the annual interest rate to a monthly interest rate (i):
i = 7.5% / 12 = 0.075 / 12 = 0.00625
Next, we convert the loan term to the total number of monthly payments (n):
So, the estimated monthly payment for this HELOC during the repayment period would be approximately $593.53.
When to Use This Calculator
This calculator is most useful when:
You are in the repayment phase of your HELOC and need to budget for your monthly payments.
You are considering borrowing a specific amount on a HELOC and want to understand the potential repayment costs.
You want to compare different interest rates or repayment terms to see how they affect your monthly obligations.
Remember, this calculator provides an estimate. Your actual HELOC payment may vary based on specific lender terms, variable interest rate changes, and any fees associated with your line of credit.
function calculateHELOCPayment() {
var helocAmount = parseFloat(document.getElementById("helocAmount").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var resultValue = document.getElementById("result-value");
var resultDetails = document.getElementById("result-details");
if (isNaN(helocAmount) || isNaN(interestRate) || isNaN(loanTerm) || helocAmount <= 0 || interestRate < 0 || loanTerm <= 0) {
resultValue.innerHTML = "Invalid Input";
resultDetails.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
var monthlyInterestRate = interestRate / 100 / 12;
var numberOfPayments = loanTerm * 12;
var monthlyPayment;
// Handle the case where interest rate is 0
if (monthlyInterestRate === 0) {
monthlyPayment = helocAmount / numberOfPayments;
} else {
monthlyPayment = helocAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
}
if (isNaN(monthlyPayment) || !isFinite(monthlyPayment)) {
resultValue.innerHTML = "Error";
resultDetails.innerHTML = "Calculation resulted in an error. Please check your inputs.";
return;
}
resultValue.innerHTML = "$" + monthlyPayment.toFixed(2);
resultDetails.innerHTML = "Estimated monthly payment for a $" + helocAmount.toLocaleString() + " HELOC over " + loanTerm + " years at " + interestRate + "% APR.";
}