HELOC Payment Calculator
Calculate monthly payments, total interest, and payoff timeline for your home equity line of credit
HELOC Details
Your HELOC Payment Breakdown
Draw Period Payment
$0
Repayment Period Payment
$0
/month
Total Interest Paid
$0
over life of HELOC
Payment Comparison
What is a HELOC?
A Home Equity Line of Credit (HELOC) is a revolving credit line secured by the equity in your home. Unlike a traditional home equity loan that provides a lump sum, a HELOC works like a credit card — you can borrow, repay, and borrow again up to your credit limit during the draw period.
Key Features:
- Draw Period: Typically 10 years. You can borrow up to your credit limit and usually make interest-only payments.
- Repayment Period: Typically 20 years after the draw period ends. You can no longer borrow, and payments include both principal and interest.
- Variable Rates: Most HELOCs have variable interest rates tied to the prime rate, which can change monthly.
- Flexibility: Borrow only what you need, when you need it, and pay interest only on the amount borrowed.
How HELOC Payments Work
During the Draw Period (typically 10 years):
- Interest-Only Payments: Most HELOCs require only interest payments during this period. Your payment is calculated as:
(Balance × Interest Rate) ÷ 12 - Principal + Interest (Optional): Some lenders allow or require principal payments during the draw period to reduce your balance.
- Revolving Credit: You can borrow, repay, and re-borrow up to your credit limit.
During the Repayment Period (typically 20 years):
- No More Borrowing: The line of credit closes, and you can't borrow additional funds.
- Principal + Interest Payments: Your payment includes both principal and interest, calculated to pay off the balance over the repayment period.
- Higher Payments: Monthly payments often increase significantly when you enter the repayment period.
HELOC vs. Home Equity Loan
| Feature | HELOC | Home Equity Loan |
|---|---|---|
| Structure | Revolving credit line | Lump sum loan |
| Interest Rate | Variable (usually) | Fixed |
| Access to Funds | Borrow as needed | One-time disbursement |
| Payment | Interest-only option during draw period | Fixed monthly payment |
| Best For | Ongoing expenses, uncertainty about amount needed | One-time expense, prefer predictable payments |
Tips for Managing a HELOC
- Pay More Than the Minimum: During the draw period, try to pay down principal, not just interest. This reduces your balance and future repayment costs.
- Beware of Rate Changes: Since most HELOCs have variable rates, your payment can increase if interest rates rise. Budget for potential rate increases.
- Plan for the Repayment Period: Your payment will likely jump significantly when the draw period ends. Start budgeting for this transition early.
- Avoid Overborrowing: Just because you have access to credit doesn't mean you should use it all. Borrow only what you need.
- Understand Closing Costs: Some HELOCs have annual fees, transaction fees, or early closure penalties. Read the fine print.
- Consider Rate Locks: Some lenders allow you to convert part of your HELOC balance to a fixed rate, protecting against rate increases.