A Home Equity Line of Credit (HELOC) is a revolving credit line secured by your home's equity. It allows you to borrow funds as needed up to a certain limit, drawing from it like a credit card. During the draw period, you typically only pay interest on the amount you've borrowed. After the draw period, the repayment period begins, where you must pay back both principal and interest over a set term. This calculator helps you estimate the monthly payment during the repayment period.
The HELOC payment calculation is a standard amortizing loan payment formula. It assumes a fixed interest rate and a fixed repayment term. The formula used is derived from the annuity formula, which calculates the periodic payment required to fully amortize a loan over its term.
The Calculation Formula
The formula to calculate the monthly payment (M) for a loan is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
P = Principal loan amount (the total amount borrowed)
i = Monthly interest rate (Annual interest rate divided by 12)
n = Total number of payments (Loan term in years multiplied by 12)
How This Calculator Works
This calculator takes your inputs and applies the formula above:
It takes the HELOC Amount as the principal (P).
It converts the Annual Interest Rate into a monthly interest rate (i) by dividing the annual rate by 12. For example, a 7.5% annual rate becomes 0.075 / 12 = 0.00625.
It converts the Repayment Period (in years) into the total number of monthly payments (n) by multiplying the years by 12. A 10-year term means 10 * 12 = 120 payments.
It plugs these values into the formula to compute the estimated monthly payment.
So, the estimated monthly payment for this example would be approximately $956.19.
Important Considerations
Interest Rate Fluctuations: Most HELOCs have variable interest rates. This calculator uses a fixed rate for the repayment period. Your actual payments could change if the rate adjusts.
Draw Period vs. Repayment Period: This calculator focuses on the repayment phase. During the draw period, payments are often interest-only.
Fees: HELOCs may involve various fees (origination, appraisal, annual fees) that are not included in this payment calculation.
Amortization: The calculation assumes full amortization, meaning the loan will be paid off by the end of the term.
Estimates Only: This tool provides an estimate. Always consult with your lender for precise figures and terms.
function calculateHELOCPayment() {
var principal = parseFloat(document.getElementById("helocAmount").value);
var annualRate = parseFloat(document.getElementById("interestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTerm").value);
var resultDiv = document.getElementById("result");
if (isNaN(principal) || principal <= 0 ||
isNaN(annualRate) || annualRate < 0 ||
isNaN(loanTermYears) || loanTermYears <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
var monthlyRate = annualRate / 100 / 12;
var numberOfPayments = loanTermYears * 12;
var monthlyPayment = 0;
// Handle the case where the interest rate is 0
if (monthlyRate === 0) {
monthlyPayment = principal / numberOfPayments;
} else {
var numerator = principal * monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments);
var denominator = Math.pow(1 + monthlyRate, numberOfPayments) – 1;
monthlyPayment = numerator / denominator;
}
// Format the output to two decimal places
var formattedPayment = monthlyPayment.toFixed(2);
resultDiv.innerHTML = "Monthly Payment: $" + formattedPayment + "Based on your inputs";
}
// Synchronize range sliders with number inputs
document.getElementById("helocAmount").addEventListener("input", function() {
// No range slider for amount, but good to keep structure for potential future additions
});
document.getElementById("interestRate").addEventListener("input", function() {
document.getElementById("interestRateRange").value = this.value * 10;
});
document.getElementById("loanTerm").addEventListener("input", function() {
document.getElementById("loanTermRange").value = this.value;
});
// Initial calculation on load
document.addEventListener("DOMContentLoaded", function() {
calculateHELOCPayment();
});