HELOC Payment Calculator
A Home Equity Line of Credit (HELOC) typically has an interest-only draw period followed by a repayment period. This calculator estimates both your interest-only payment and your fully amortized monthly payment.
How it works
A HELOC has two phases. During the draw period you can borrow funds and usually make interest-only payments, calculated as balance × (annual rate ÷ 12). This keeps payments low but does not reduce your principal.
Once the draw period ends, the repayment period begins and your payment becomes fully amortized. We use the standard formula payment = P × r ÷ (1 − (1 + r)^−n), where P is the balance, r is the monthly rate, and n is the number of repayment months.
Tips
HELOC rates are usually variable, so your payment can rise if interest rates increase. Stress-test your budget against a higher rate.
Paying more than the interest-only minimum during the draw period reduces your balance and lowers your future amortized payment, helping you avoid payment shock.
FAQ
Why are HELOC payments lower at first?
During the draw period, lenders typically require only interest payments. Once the repayment period starts, you must pay both principal and interest, which raises the monthly amount significantly.
What is payment shock on a HELOC?
Payment shock is the jump in your monthly payment when the interest-only draw period ends and full principal-plus-interest repayment begins. It can be substantial if you only paid interest during the draw.
Are HELOC interest rates fixed?
Most HELOCs have variable rates tied to a benchmark like the prime rate, so your payment can change over time. Some lenders offer fixed-rate conversion options for part of your balance.