HELOC Payment Calculator
A HELOC has two lives: cheap interest-only years, then a repayment phase that can double the payment. Enter your line and see both numbers before you borrow.
| Interest-only payment (draw phase) | — |
| Repayment-phase payment | — |
| Interest paid during draw years alone | — |
| Total interest, both phases | — |
The two-phase structure that catches borrowers
During the draw period (usually 10 years) you can borrow, repay, and pay interest only. Then the line freezes and the balance amortizes over the repayment period. On $50,000 at 8.5%: $354/month interest-only becomes $434/month — and that is a mild case. Borrowers who drew late or carry higher balances see payments double.
Interest-only = Balance × monthly rate · Repayment = standard amortization
Three HELOC realities
- The rate floats. HELOCs track the prime rate; a 2-point rise adds ~$83/month per $50,000 drawn. Budget at rate + 2 points.
- Interest-only builds nothing. Ten years of payments and you owe exactly what you drew. Voluntarily paying principal during the draw phase avoids the cliff.
- Your house is the collateral. A HELOC for a kitchen adds value against the debt; a HELOC for a vacation converts unsecured fun into foreclosure risk.
Frequently asked questions
How is a HELOC payment calculated?
Draw phase: balance × monthly rate (interest only) — $50,000 at 8.5% is about $354/month. Repayment phase: the balance amortizes like a loan, about $434/month over 20 years in the same example.
What happens when the draw period ends?
Borrowing stops and the payment jumps to principal + interest over the repayment period. This "payment shock" commonly adds 25–100%+ to the monthly bill.
HELOC vs home equity loan?
HELOC: flexible credit line, variable rate, interest-only years. Home equity loan: lump sum, fixed rate, fixed payment from day one. Uncertain ongoing costs suit a HELOC; one-time known costs suit the loan.
Is HELOC interest tax deductible?
In the US, only when the funds buy, build, or substantially improve the home securing it (and you itemize). HELOC money spent on cars or debt consolidation is not deductible.
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Last updated: 2026-07-08