HELOC Calculator
Calculate your Home Equity Line of Credit payments across both phases: the draw period with interest-only payments and the repayment period with fully amortized principal and interest. See your available credit line based on home equity and LTV limits, compare monthly costs in each phase, and understand the total interest cost over the full life of the HELOC.
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How It Works
Your HELOC credit line equals the LTV limit percentage of your home value minus the current mortgage balance. This is the maximum you can draw during the draw period.
Credit Line = (Home Value x LTV%) - Mortgage Balance($450K x 80%) - $250K = $110K credit lineDuring the draw period, you pay only interest on the amount drawn. The monthly payment equals the drawn balance times the monthly interest rate. No principal reduction is required.
Monthly = Drawn Amount x (Annual Rate / 12)$50K drawn at 8.5% = $354/mo interest onlyWhen the draw period ends, the outstanding balance is amortized over the repayment period with fixed monthly payments of principal and interest. The payment is significantly higher than during the draw period.
M = Balance x r(1+r)^n / [(1+r)^n - 1]$50K at 8.5% for 20yr repayment = $434/moTotal draw period interest equals the monthly interest-only payment times the number of draw period months. This is pure interest cost with no principal reduction.
Draw Interest = Monthly Interest x Draw Months$354/mo x 120 months = $42,480 draw interestTotal repayment period interest equals total payments minus the principal repaid. This is calculated from the amortization of the drawn balance over the repayment term.
Repay Interest = (Monthly x Repay Months) - Balance$434 x 240 - $50K = $54,160 repayment interestAdd draw period interest and repayment period interest for the total cost of borrowing. This number helps compare HELOC against a lump-sum home equity loan or cash-out refinance.
Total = Draw Interest + Repayment Interest$42,480 + $54,160 = $96,640 total interestQuick Reference
Common examples — verify instantly above.
$450K home, $250K owed
Available equity
$200,000
80% LTV
Max credit line
$110,000
$50K at 8.5%
Draw period (interest only)
$354/mo
$50K at 8.5%, 20yr
Repayment period (P&I)
$434/mo
$100K at 8%, 10yr draw
Draw period payment
$667/mo
$100K at 8%, 20yr repay
Repayment payment
$836/mo
$50K, 10yr+20yr
Total interest over life
$96,640
Payment jump
Draw to repayment
$354 → $434/mo (+23%)
Tips & Shortcuts
Make principal payments during the draw period whenever possible to reduce the balance before the repayment period begins and minimize the payment shock.
Budget for the repayment period payment from the start, not just the lower draw period amount. The jump from interest-only to P&I can be 20% to 100% higher.
Consider fixing a portion of your HELOC balance if your lender offers a fixed-rate conversion option. This protects against rate increases on that portion.
Use a HELOC strategically for home improvements that increase property value, creating a positive return on the borrowed funds.
Draw only what you need from the credit line. Interest is charged only on the amount drawn, so leaving unused credit available costs nothing.
Monitor interest rates if you have a variable-rate HELOC. A significant rate increase can substantially change your monthly payment during both the draw and repayment periods.
Common Mistakes to Avoid
Budgeting only for the low draw-period interest-only payment
The repayment period payment is significantly higher. Plan your finances around the full amortized payment to avoid payment shock when the draw period ends.
Drawing the maximum credit line without a repayment plan
Just because you have a $110,000 credit line does not mean you should use it all. Borrow only what you need and have a clear plan for repayment.
Ignoring rate changes on a variable-rate HELOC
Most HELOCs have variable rates. A 2% rate increase on a $100,000 balance adds about $167 per month to your interest-only payment. Monitor rates and budget for increases.
Using a HELOC as an emergency fund replacement
While a HELOC provides accessible funds, it puts your home at risk. Maintain a separate cash emergency fund and use the HELOC only for planned, productive purposes.
Not comparing HELOC total cost against alternatives
A HELOC with a 10-year draw plus 20-year repayment can cost more in total interest than a 15-year home equity loan at a fixed rate. Compare total lifetime cost before choosing.
Forgetting annual fees and closing costs
Some HELOCs have annual maintenance fees, transaction fees, or closing costs. These add to the effective cost of borrowing and should be included in any comparison.
Frequently Asked Questions
The draw period is the initial phase, typically 5 to 10 years, when you can borrow against your credit line. During this time, you only pay interest on the amount drawn. You can borrow, repay, and reborrow up to your credit limit.
When the draw period ends, you enter the repayment period, typically 10 to 20 years. You can no longer borrow, and your payment switches from interest-only to fully amortized principal and interest. The monthly payment increases significantly.
During the draw period you pay only interest. When repayment begins, you start paying both principal and interest on the full balance, and the repayment period is shorter than the original draw plus repayment combined. This can double or triple the monthly payment.
Most HELOCs have variable interest rates tied to the prime rate plus a margin. Some lenders offer fixed-rate conversion options for portions of the balance. Variable rates mean your payment can change with market conditions.
Like home equity loans, HELOCs are limited by combined LTV, typically 80% to 90% of home value minus the existing mortgage balance. Your credit score and income also affect the approved credit line amount.
Yes. While only interest is required during the draw period, making principal payments reduces your balance and interest charges. Any principal paid also frees up that amount for future borrowing within your credit limit.
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