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HELOC Calculator

Calculate HELOC payments for draw and repayment periods. See total interest, amortization schedule, and compare costs.

$
%
years
years
Draw Period Monthly Payment
$271.88
Interest only
Repayment Period Monthly Payment
$355.67
Principal + interest
Total Payments
$117,986.40
Total Interest
$72,986.40
Draw Period Interest
$32,625.60
Repayment Interest
$40,360.80
Principal (38%)
Interest (62%)

Amortization Schedule

YearInterestPrincipalBalance
1$3,262.56$0.00$45,000.00
2$3,262.56$0.00$45,000.00
3$3,262.56$0.00$45,000.00
4$3,262.56$0.00$45,000.00
5$3,262.56$0.00$45,000.00
6$3,262.56$0.00$45,000.00
7$3,262.56$0.00$45,000.00
8$3,262.56$0.00$45,000.00
9$3,262.56$0.00$45,000.00
10$3,262.56$0.00$45,000.00
11$3,228.41$1,039.63$43,960.37
12$3,150.47$1,117.57$42,842.80
13$3,066.71$1,201.33$41,641.47
14$2,976.66$1,291.38$40,350.09
15$2,879.86$1,388.18$38,961.91
16$2,775.81$1,492.23$37,469.68
17$2,663.95$1,604.09$35,865.59
18$2,543.71$1,724.33$34,141.26
19$2,414.46$1,853.58$32,287.68
20$2,275.48$1,992.56$30,295.12
21$2,126.15$2,141.89$28,153.23
22$1,965.59$2,302.45$25,850.78
23$1,793.01$2,475.03$23,375.75
24$1,607.48$2,660.56$20,715.19
25$1,408.04$2,860.00$17,855.19
26$1,193.68$3,074.36$14,780.83
27$963.21$3,304.83$11,476.00
28$715.49$3,552.55$7,923.45
29$449.21$3,818.83$4,104.62
30$162.96$4,105.08$0.00

Highlighted rows indicate the draw period (interest-only).

How a HELOC Works

A HELOC has two distinct phases that affect your monthly payment:

Draw Period (Interest-Only Phase)

During the draw period — typically 5 to 10 years — you can borrow funds up to your approved credit limit. Monthly payments cover only the interest on your outstanding balance. This makes payments low, but you're not reducing the principal.

Monthly payment formula: Loan Balance × (Annual Rate ÷ 12)

Repayment Period (Amortization Phase)

Once the draw period ends, you enter the repayment phase — typically 10 to 20 years. You can no longer borrow, and the full outstanding balance is amortized with monthly payments of principal plus interest. Payments increase significantly compared to the draw period.

Monthly payment formula: Standard amortization: P × [r(1+r)n] ÷ [(1+r)n - 1]

HELOC vs Home Equity Loan

FeatureHELOCHome Equity Loan
Interest rateUsually variableFixed
DisbursementDraw as neededLump sum
PaymentsInterest-only during drawFixed P&I from start
FlexibilityRevolving credit lineOne-time borrowing
Best forOngoing expenses, renovationsOne-time large expense

Typical HELOC Costs

  • Interest rate: Variable, typically prime rate + 0% to 2%. Currently 7-9% range
  • Closing costs: $0 to $5,000+ depending on lender (appraisal, title search, origination fees)
  • Annual fee: Some lenders charge $25-$75/year
  • Early closure fee: Some lenders charge a fee if you close the HELOC within 2-3 years

Tips for Using a HELOC

  • Pay more than interest-only during the draw period to reduce payment shock when repayment begins
  • Budget for rate increases — variable rates can rise significantly over the loan term
  • Don't use your full credit limit — keep a buffer for emergencies and rate changes
  • Consider a fixed-rate lock — some lenders let you lock portions at a fixed rate
  • Use for appreciating assets — home improvements that add value are better uses than depreciating purchases

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Frequently Asked Questions

What is a HELOC?

A Home Equity Line of Credit (HELOC) is a revolving credit line secured by your home equity. It has two phases: a draw period where you can borrow and make interest-only payments, and a repayment period where you pay back principal plus interest.

How does the draw period work?

During the draw period (typically 5-10 years), you can borrow up to your credit limit and only pay interest on the amount borrowed. Your monthly payment is lower because no principal is due.

What happens during the repayment period?

After the draw period ends, you can no longer borrow. The outstanding balance is amortized over the repayment period (typically 10-20 years) with fixed monthly payments of principal plus interest.

Why does my payment increase after the draw period?

During the draw period you only pay interest. Once repayment begins, you must pay both principal and interest, which increases the monthly payment significantly.

Are HELOC interest rates fixed or variable?

Most HELOCs have variable interest rates tied to the prime rate. Some lenders offer fixed-rate options or the ability to lock portions of the balance at a fixed rate.

Is HELOC interest tax-deductible?

HELOC interest may be tax-deductible if the funds are used to buy, build, or substantially improve the home that secures the loan. Interest on funds used for other purposes (debt consolidation, education) is generally not deductible.