HELOC Calculator
A home equity line of credit (HELOC) is a revolving loan secured by your home that works in two phases: a draw period of interest-only payments followed by a repayment period that amortizes the balance. This calculator estimates the low interest-only payment while you are drawing funds, the higher fully-amortizing payment once repayment begins, and the total interest across both phases. It mirrors how a real HELOC payment jumps when the draw window closes.
Formula
Draw payment = balance × (rate/12); Repay payment = standard amortization of balance
- balance
- Amount drawn, capped at the credit limit
- rate
- Annual interest rate (percent)
- draw period
- Years of interest-only payments
- repay period
- Years over which the balance is amortized
How it works
- Enter your credit limit and the amount you actually draw; the calculator caps the drawn amount at the limit and bases all payments on what you borrow, not the full line.
- During the draw period, payment is interest-only: the drawn balance times the monthly rate. Multiply by the number of draw months for total draw-phase interest.
- During the repayment period, the balance is amortized like a fixed loan over the repayment years, producing a higher monthly payment and the remaining interest, which are summed for the total cost.
Worked example
A $100,000 line with $50,000 drawn at 8%, a 10-year draw period, and a 20-year repayment period.
- Interest-only draw payment: 50,000 × (0.08 ÷ 12) = $333.33 per month.
- Draw-phase interest: 333.33 × (10 × 12) = $40,000 over 10 years.
- Repayment payment: amortize $50,000 at 8% over 20 years ≈ $418.22 per month.
- Repayment interest: 418.22 × 240 − 50,000 ≈ $50,372.81.
Draw payment about $333.33/mo, repayment payment about $418.22/mo, and total interest near $90,372.81 across both phases.
Frequently asked questions
- Why does my payment rise after the draw period?
- During the draw period you pay only interest, which keeps payments low. When repayment begins, each payment must cover both principal and interest over the remaining term, so the monthly amount steps up sharply.
- What is the difference between a HELOC and a home equity loan?
- A HELOC is a revolving credit line you draw from as needed, usually at a variable rate with an interest-only draw period. A home equity loan is a one-time lump sum with fixed payments from day one. This tool models the HELOC two-phase structure.
- Does drawing less than my limit lower the payment?
- Yes. Payments are based only on the balance you actually draw, not your full credit limit. Borrowing less reduces both the interest-only draw payment and the later amortizing payment.
- Is the interest rate fixed?
- This calculator uses one rate for the projection, but real HELOCs typically carry a variable rate tied to an index such as the prime rate. Your actual payments can rise or fall as that index changes.