HELOC Calculator
- Updated
- Formula shown
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Results
$364.58 a month interest-only for 10 years, then $441.86 a month for 20 years; $99,795 of interest in total.
- Draw period (interest only)
- $364.58
- Repayment period
- $441.86
| Year | Phase | Paid | Interest | Principal | Balance |
|---|---|---|---|---|---|
| 1 | Draw | $4,375 | $4,375 | $0.00 | $50,000 |
| 2 | Draw | $4,375 | $4,375 | $0.00 | $50,000 |
| 3 | Draw | $4,375 | $4,375 | $0.00 | $50,000 |
| 4 | Draw | $4,375 | $4,375 | $0.00 | $50,000 |
| 5 | Draw | $4,375 | $4,375 | $0.00 | $50,000 |
| 6 | Draw | $4,375 | $4,375 | $0.00 | $50,000 |
| 7 | Draw | $4,375 | $4,375 | $0.00 | $50,000 |
| 8 | Draw | $4,375 | $4,375 | $0.00 | $50,000 |
| 9 | Draw | $4,375 | $4,375 | $0.00 | $50,000 |
| 10 | Draw | $4,375 | $4,375 | $0.00 | $50,000 |
| 11 | Repay | $5,302 | $4,337 | $965 | $49,035 |
| 12 | Repay | $5,302 | $4,249 | $1,053 | $47,981 |
This holds the rate constant. Most HELOC rates are variable, tied to the prime rate, so payments rise and fall with it. Paying principal during the draw period lowers both the later payment and the total interest.
How to use the HELOC calculator
- Enter the amount you expect to draw. The calculator assumes the full amount is drawn at the start, which gives the highest interest cost.
- Enter the current rate on the line. Most HELOCs are variable, so run it again with a higher rate to test the payment.
- Enter the draw period (often 10 years) and the repayment period (often 10 to 20 years) from the lender's terms.
- Compare the two payments and read the year-by-year table to see when the jump happens.
HELOC payment formulas
Repayment payment = balance × r(1 + r)n ÷ ((1 + r)n − 1)
Total interest = draw payment × draw months + (repayment payment × n − balance)
During the draw period most HELOCs only require interest, so the balance doesn't fall unless you pay extra. r is the annual rate ÷ 12. When the draw period ends, the remaining balance is amortized over the repayment period of n months, like a regular loan. Because the whole balance must now be repaid in a shorter window, the payment rises. For many borrowers this payment shock is the biggest risk of a HELOC.
Worked example
You draw $50,000 at 8.75% with a 10-year draw period and a 20-year repayment period. During the draw period you pay $50,000 × 0.0875 ÷ 12 = $364.58 a month, all interest, which adds up to $43,750 over the 10 years. When repayment starts, the payment becomes $441.86, $77.27 more (21%).
Total interest is $99,795, about twice the amount borrowed, because you pay interest on the full $50,000 for 30 years. With a 15-year repayment period instead, the later payment would be $499.72 and the total interest $83,700.
Payments on a $50,000 HELOC by rate
10-year draw period, 20-year repayment period, full amount drawn.
| Rate | Interest-only payment | Repayment payment | Total interest |
|---|---|---|---|
| 6.75% | $281.25 | $380.18 | $74,994 |
| 7.75% | $322.92 | $410.47 | $87,264 |
| 8.75% | $364.58 | $441.86 | $99,795 |
| 9.75% | $406.25 | $474.26 | $112,572 |
| 10.75% | $447.92 | $507.61 | $125,577 |
Every percentage point on the rate adds about $41.67 a month to the interest-only payment on $50,000.
How big a line can you get?
Lenders size a HELOC the same way as a home equity loan: home value × maximum combined loan-to-value, minus what you owe. A $500,000 home with $250,000 left on the mortgage and an 85% limit supports a line of up to $175,000. You only pay interest on what you draw, so a large line costs nothing until you use it, although some lenders charge an annual fee.
Managing a HELOC
- Pay principal early. Anything above the interest-only minimum lowers the balance that will be amortized later, which softens the payment jump and cuts the total interest.
- Know how the rate is set. HELOC rates are usually the prime rate plus a margin. Ask about rate caps, any introductory rate and whether you can lock part of the balance at a fixed rate.
- Watch the end of the draw period. Lenders can freeze or reduce a line if your home's value or your credit drops. Don't rely on unused credit as an emergency fund.
- Check the fees. Annual fees, inactivity fees and early-closure fees vary. Some lenders charge closing costs; others recover them if you close the line within a few years.
To find how big a line you could qualify for, start with the home equity loan calculator, which works out borrowable equity from your home value and combined LTV limit. For a fixed alternative, compare with a cash-out refinance.
Frequently asked questions
How is a HELOC payment calculated?
During the draw period the minimum is usually interest only: balance × annual rate ÷ 12. In the repayment period the balance is amortized like a regular loan over the remaining months, so the payment covers both principal and interest.
What is the payment on a $50,000 HELOC?
At 8.75%, the interest-only payment is $364.58 a month during the draw period. With a 20-year repayment period it then rises to $441.86 a month. Total interest over a 10-year draw and 20-year repayment is about $99,800.
Why does my HELOC payment go up after the draw period?
Because you start repaying principal. Interest-only payments leave the balance unchanged, so when the draw period ends the whole balance has to be repaid over the repayment period. On $50,000 at 8.75% the payment rises by $77.27 a month.
Are HELOC rates fixed or variable?
Most are variable, usually set as the prime rate plus a margin, so the payment changes when prime moves. Some lenders let you lock part of the balance at a fixed rate. This calculator holds the rate constant, so test a few rates.
How can I lower the total interest on a HELOC?
Draw only what you need, when you need it, and pay principal during the draw period. A shorter repayment period also helps: on $50,000 at 8.75%, repaying over 15 years instead of 20 cuts total interest from about $99,800 to about $83,700.