HELOC Payment Calculator

A HELOC (Home Equity Line of Credit) has two distinct phases: a draw period and a repayment period. Our calculator models both phases accurately so you know exactly what to expect — before you sign anything.

Two Phases of a HELOC

• Draw Period (typically 5-10 years): You can borrow against your credit line as needed. During this period, most lenders require interest-only payments on the amount you've drawn. Some lenders may require 1-2% of the balance. Our calculator uses interest-only payments during the draw phase, which is the most common arrangement.
• Repayment Period (typically 10-20 years): The draw window closes. You can no longer borrow, and the outstanding balance is amortized over the remaining term at the repayment interest rate. This is when the real costs kick in — your monthly payment can jump significantly.

Understanding HELOC Rates

• Variable rates: Most HELOCs use a variable rate tied to the prime rate plus a margin (e.g., Prime + 1%). Your rate can change monthly.
• Draw vs Repayment rates: Some HELOCs have different rates for each phase. The repayment rate is often slightly higher.
• Rate caps: HELOCs typically have lifetime rate caps (often 18%) that limit how high your rate can go.

The Payment Shock Problem

Many homeowners are caught off guard when the draw period ends. On a $50,000 HELOC at 8%:

• Draw period (interest-only): ~$333/month
• Repayment period (fully amortized over 15 years): ~$478/month

That's a ~44% increase overnight. If rates rise during the draw period, the shock can be even larger. Use this calculator to test different rate scenarios and make sure you can handle the repayment phase.