MathBench

HELOC Payment Calculator

Enter your drawn balance, rate, and the line's draw and repayment terms to see both phases of the payment: the interest-only years, the jump, and the total interest across the life of the line.

Educational estimates only. This calculator is for planning and education. It is not financial, tax, or investment advice, and results may differ from what a lender, broker, or the IRS calculates for your situation. Confirm important decisions with a qualified professional.

Result

—interest-only payment /mo
—repayment payment /mo
—payment jump
—total interest, both phases

How this calculator works

A HELOC lives two lives. During the draw period you can borrow against the line and are usually billed interest only, on whatever you've drawn. When the draw period closes, the balance converts to a fully amortizing loan over the repayment term. This calculator shows both phases for a given drawn balance at today's rate: the interest-only payment, the repayment-phase payment, how big the jump between them is, and the total interest across the whole arc.

The number most people underestimate is the jump. Interest-only payments feel comfortable for a decade, then principal arrives on a schedule 10 years shorter than the money was borrowed for. Seeing the second number early (while there's still time to pay principal voluntarily) is the entire point of running this before drawing.

The formula

Interest-only payment = balance × (rate ÷ 12)

Repayment payment     = B × r ÷ (1 − (1 + r)^−n)
  r = rate ÷ 12,  n = repayment months

Total interest = IO payment × IO months + (repayment payment × n − balance)

The repayment formula is the standard fixed-payment annuity amortization used for any installment loan. The model holds the rate constant. Actual HELOC rates float with an index (usually prime), so results are a snapshot. The finance disclaimer at the top of the page is doing real work here.

Worked example

Say you've drawn $50,000 at 8.5% on a line with a 10-year interest-only period and a 20-year repayment term:

  1. Interest-only: 50,000 × 0.085 ÷ 12 = $354.17/mo
  2. Repayment phase: amortize $50,000 over 240 months → $433.91/mo
  3. Payment jump: +23%
  4. Total interest: 354.17 × 120 + (433.91 × 240 − 50,000) = $96,639

Nearly double the drawn amount goes to interest across the 30-year arc, and that's with the rate holding still. It's why voluntary principal payments during the comfortable years change the story so much.

Assumptions & tips

  • Budget for the repayment payment on day one. If $434 a month would strain the budget, $354 a month is a warning, not a comfort. The bigger number is contractually scheduled.
  • Stress-test the rate. Rerun the numbers at 2–3 points higher. Variable-rate debt that only works at today's rate doesn't work.
  • Pay principal during the draw years. Every voluntary dollar of principal shrinks both the eventual payment and the total interest, and unlike a mortgage prepayment, you can usually re-borrow it if life demands.
  • Know your conversion options. Many lenders let you fix the rate on a drawn portion, turning it into a predictable installment loan. Useful when rates are rising and the balance is large.
  • Remember what secures it. A HELOC is a lien on your home. Consolidating unsecured debt onto one converts missable-payment problems into foreclosure-risk problems, a trade to make with care, ideally with professional advice, or not at all.

Frequently asked questions

Why does a HELOC payment jump after the draw period?

During the draw period (typically the first ten years), most HELOCs require only interest on what you have borrowed. When the draw period ends, the line closes and the balance must be repaid with principal and interest over the repayment term, usually ten to twenty years. The payment rises for two stacked reasons: principal joins the bill, and the repayment term is shorter than the total life of the line.

Are HELOC rates fixed or variable?

Almost always variable, typically the prime rate plus a margin, adjusting whenever prime moves. This calculator models a constant rate because no one can predict prime a decade out, so treat the results as a snapshot at today's rate. Many lenders offer fixed-rate conversion options on portions of the balance. Ask about them if you want a predictable payment.

Do I pay interest on the whole credit line?

No, only on the amount drawn. A 100,000 dollar line with 50,000 drawn accrues interest on 50,000. This calculator asks for the drawn amount for that reason. Annual fees or inactivity fees, where they exist, are separate line items in the loan agreement.

What happens if I still owe money when the HELOC ends?

The repayment schedule is designed to fully amortize the balance by the end of the term, so following it retires the debt. The dangerous variant is a balloon HELOC, where the entire balance falls due at the end of the draw period. Check your agreement for the words "balloon payment": refinancing under pressure is the situation to see coming years ahead.

Sources

  1. What You Should Know About Home Equity Lines of Credit (HELOC). Consumer Financial Protection Bureau, last updated August 2022. files.consumerfinance.govThe two-phase structure this calculator models (a draw period billed as interest only, then a repayment period that amortizes the balance) plus the balloon-payment variant the FAQ warns about.
  2. Regulation Z, 12 CFR §1026.40, Requirements for home equity plans. Consumer Financial Protection Bureau. consumerfinance.govThe disclosure rules for HELOCs: that the rate is variable and tied to a published index plus a margin, and that any balloon payment must be disclosed up front.
  3. What is a home equity line of credit (HELOC)? Consumer Financial Protection Bureau. consumerfinance.govConfirms interest accrues only on the amount drawn (the reason this page asks for the drawn balance rather than the credit limit) and the roughly ten-year draw period used as the default.
  4. Selected Interest Rates (H.15). Board of Governors of the Federal Reserve System. federalreserve.govThe Federal Reserve's published bank prime loan series: the base rate a variable HELOC is typically quoted against, and the reason the constant-rate result here is a snapshot at today's rate rather than a forecast.
  5. What fees can my lender charge if I take out a HELOC? Consumer Financial Protection Bureau. consumerfinance.govThe annual, transaction and inactivity fees that sit outside the payment arithmetic on this page but still appear on the bill.

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