Draw Period (Interest-Only)
Repayment Period (Principal + Interest)
Estimated Monthly Payment
Payment Amount:$0.00
Annual Interest Cost:$0.00
Understanding Your HELOC Payments
A Home Equity Line of Credit (HELOC) is a flexible revolving credit line secured by your home. Unlike a traditional home equity loan, HELOCs typically have two distinct phases: the Draw Period and the Repayment Period. This calculator helps you estimate your costs in either phase.
1. The Draw Period (Typically 10 Years)
During the draw period, most HELOCs only require interest-only payments. This allows you to borrow as needed and keep your monthly obligations low. However, remember that because you aren't paying down the principal, your total debt remains the same unless you choose to make extra payments.
Example: A $50,000 balance at 8.5% APR results in a $354.17 monthly interest payment.
2. The Repayment Period (Typically 15-20 Years)
Once the draw period ends, you can no longer withdraw funds. You must begin paying back both the principal and interest. This often results in a significant "payment shock" because the monthly amount jumps to cover the full amortization of the debt.
Calculation: Standard loan amortization formula.
Example: That same $50,000 balance at 8.5% APR over a 20-year repayment term jumps to $433.91 per month.
Factors That Affect Your HELOC Cost
Because HELOCs usually have variable interest rates, your payments can fluctuate month-to-month based on market conditions (specifically the Prime Rate). It is vital to prepare for potential rate hikes that could increase your monthly interest burden.
Strategies to Manage HELOC Debt
Pay Principal Early: Making principal payments during the draw period reduces the interest you owe and lowers the future "payment shock" during the repayment phase.
Monitor the Prime Rate: HELOC rates are often expressed as "Prime + Margin." Keep an eye on Federal Reserve movements.
Refinance Options: If rates drop or you want a fixed payment, consider converting your HELOC balance into a fixed-rate home equity loan or a new mortgage.
function toggleRepaymentInput() {
var phase = document.getElementById("helocPhase").value;
var termWrap = document.getElementById("repaymentTermWrap");
if (phase === "repayment") {
termWrap.style.display = "block";
} else {
termWrap.style.display = "none";
}
}
function calculateHELOC() {
var balance = parseFloat(document.getElementById("helocBalance").value);
var annualRate = parseFloat(document.getElementById("helocRate").value);
var phase = document.getElementById("helocPhase").value;
var resultDiv = document.getElementById("helocResult");
if (isNaN(balance) || isNaN(annualRate) || balance <= 0 || annualRate <= 0) {
alert("Please enter valid positive numbers for balance and interest rate.");
return;
}
var monthlyRate = (annualRate / 100) / 12;
var monthlyPayment = 0;
var annualInterest = balance * (annualRate / 100);
if (phase === "draw") {
// Interest Only calculation
monthlyPayment = balance * monthlyRate;
} else {
// Amortized Repayment calculation
var termYears = parseFloat(document.getElementById("helocTerm").value);
if (isNaN(termYears) || termYears <= 0) {
alert("Please enter a valid repayment term in years.");
return;
}
var totalMonths = termYears * 12;
monthlyPayment = (balance * monthlyRate) / (1 – Math.pow(1 + monthlyRate, -totalMonths));
}
document.getElementById("resMonthly").innerText = "$" + monthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resAnnualInterest").innerText = "$" + annualInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultDiv.style.display = "block";
}