HELOC Calculator: Draw-Period and Repayment Payments

1. Enter the balance you expect to owe when the draw period ends, and optionally your credit limit.
2. Add the APR, the draw-period length and the repayment-period length, all in years.
3. Read the interest-only payment, the higher repayment payment, the interest in each phase, and the payment shock when repayment begins.

What each result tells you:

A HELOC, or home equity line of credit, is a revolving loan secured by your home. Instead of one lump sum, it gives you a credit limit you can borrow against, repay, and borrow again, much like a credit card tied to your house.

A HELOC runs in two stages. The draw period is when you can take money out, and payments are usually interest-only. The repayment period follows, when you can no longer borrow and must pay the balance back with principal and interest. This tool estimates the payment in each stage. For a fixed lump-sum second mortgage instead, a home equity loan works differently, and a mortgage calculator covers a first mortgage.

Because a HELOC has two phases, one payment formula is not enough. The draw period charges interest only, while the repayment period amortizes the balance.

1. During the draw period you pay only the interest, so the balance stays the same unless you choose to pay extra principal.
2. When the draw period ends, that balance is amortized over the repayment years.
3. The repayment payment is higher because it now includes principal, which causes the payment shock.

Some lenders allow principal payments during the draw period, which lowers the balance that later amortizes. This calculator keeps the draw period interest-only for the base estimate, which is the common and more conservative case.

Suppose you owe 50,000 at the end of the draw period, the APR is 9 percent, the draw period is 10 years and the repayment period is 20 years.

Meaning: the payment jumps from 375.00 to 449.86 a month when repayment begins, a payment shock of 74.86 (about 20 percent higher). Across both phases you pay 102,967.11 in interest and 152,967.11 in total. The 45,000 of draw-period interest buys you no principal reduction, because interest-only payments leave the balance untouched.

Four inputs drive the numbers, and a HELOC adds one more risk that a fixed loan does not.

The Rate

HELOCs are usually variable, tied to an index plus a margin set by the lender. If the index rises, both your interest-only and repayment payments rise. Run the calculator at a higher rate to see how exposed you are.

The Balance at End of Draw

Only the balance you still owe when the draw period ends gets amortized. Paying principal during the draw period lowers this balance and shrinks the repayment payment.

The Draw-Period Length

A longer draw period means more months of interest-only payments, which adds to the interest you pay without reducing what you owe.

The Repayment-Period Length

A shorter repayment period raises the monthly payment but cuts total interest. A longer one lowers the payment but costs more interest overall.

The two phases behave so differently that it helps to compare them side by side. The cost of the draw period is easy to underestimate because the payment looks small.

To compare the cost of borrowing against the true APR, which can fold in some fees, use the APR calculator, and to check how a new payment fits your budget, try the debt-to-income ratio calculator.

Before You Open the Line

Model the interest-only payment next to the repayment payment so the future jump is not a surprise. A low draw-period payment can hide a much larger bill later.

While You Are in the Draw Period

Test paying extra principal now. Lowering the balance before repayment starts reduces both the repayment payment and the interest you pay over the whole line.

When Comparing Borrowing Options

Weigh a HELOC against a cash-out refinance or a fixed home equity loan. For refinance math, see the refinance savings calculator; to see what home price a loan supports, use the home affordability calculator.

1. Budgeting Only for the Interest-Only Payment

The repayment payment is usually much larger. Plan for it before the draw period ends, not after.

2. Treating a Variable Rate as Fixed

The rate can rise. A payment that fits today may not fit after a few index increases. Stress-test it at a higher rate.

3. Making No Principal Payments During the Draw

Interest-only payments leave the balance untouched, so every dollar still has to be repaid, plus all that interest.

4. Forgetting the Loan Is Secured by Your Home

A HELOC is backed by your house. Missed payments can put the home at risk, unlike unsecured debt.

5. Ignoring Fees and Terms

Annual fees, early-closure fees and a possible balloon payment vary by lender. Read the agreement before you borrow.

The math follows the standard interest-only and amortization formulas, so differences from a lender usually come from a changing rate or from terms this tool keeps simple.

Multiply the balance by the monthly rate, which is the APR divided by 12. On a 50,000 balance at 9 percent, that is 50,000 times 0.0075, or 375.00 a month.

During the draw period you pay interest only, so the balance stays the same. In repayment the same balance must be paid off with principal and interest, which makes the payment larger. That increase is the payment shock.

It is the stage when you can borrow against the line, often around 10 years. Payments are usually interest-only, so what you owe does not fall unless you pay extra principal.

It is the stage after the draw period when you can no longer borrow and must repay the balance. The calculator amortizes the balance over the repayment years you enter.

Most HELOCs have a variable rate tied to an index plus a lender margin, so payments can rise or fall. This tool estimates payments at the one rate you enter and does not assume any rate.

Many lenders allow it. Paying principal lowers the balance that later amortizes, which reduces both the repayment payment and the total interest. The base estimate here keeps the draw period interest-only.

The calculator adds the interest paid during the draw period to the interest inside the repayment payments. In the example, that is 45,000 plus 57,967.11, or 102,967.11 in all.

It is the jump from the interest-only payment to the repayment payment. In the example it rises from 375.00 to 449.86 a month, a shock of 74.86.

No. The payment depends on the balance you owe, not the limit. The limit only shows how much of the line you are using.

No. The calculation runs in your browser and nothing is sent to our servers. Anything you choose to Save stays in this browser only.

• Amortization Schedule (Corporate Finance Institute, standard amortization formula).
• What is a home equity line of credit (HELOC)? (Consumer Financial Protection Bureau, general explainer).
• Home Equity Loan (Corporate Finance Institute, how a HELOC works).