HELOC Payment Calculator
Example: HELOC balance: 50000 $ · Interest rate (APR): 8.5 % · Repayment term: 20 years
| Interest-only payment (draw period) | $354 |
| Repayment payment (amortizing) | $434 |
| Total interest over repayment | $54,139 |
Worked example
On a $50,000 HELOC at 8.5%, the interest-only payment during the draw period is about $354 a month — just the interest, with the balance untouched. Once the 20-year repayment period begins, the payment amortizes to roughly $434 a month, and over those 20 years you pay about $54,100 in interest, more than the amount you borrowed. The jump from $354 to $434, plus finally paying principal, is the payment shock to plan for.
Frequently asked questions
How does a HELOC draw period work?
During the draw period, often 10 years, you can borrow up to your limit and typically make interest-only payments. Because you are not paying down principal, the balance stays put — and the required payment rises sharply when the repayment period starts.
Why do HELOC payments jump later?
When the draw period ends, the outstanding balance must be repaid over the remaining term, so payments switch from interest-only to fully amortizing principal-and-interest. That, combined with a variable rate, is why the repayment-phase payment can be much higher.
Are HELOC rates fixed?
Most HELOCs carry a variable rate tied to an index like the prime rate, so your payment can rise or fall as rates move. Some lenders offer a fixed-rate conversion option on part of the balance. Model a higher rate here to stress-test your budget.
What can I use a HELOC for?
Common uses are home improvements, debt consolidation, or large one-time expenses. Because your home secures the line, missing payments can lead to foreclosure, so borrow against equity with the same caution you would a mortgage.