Calculate your Home Equity Line of Credit payments — from interest-only during the draw period to fully amortizing payments during repayment. Understand the true cost of borrowing against your home equity.
A homeowner with a $500,000 home and $300,000 mortgage takes out a $50,000 HELOC at 7.5% to renovate their kitchen.
Draw Period (10 years): $312.50/mo (interest-only)
Repayment Period (20 years): $402.90/mo (amortizing)
Total Interest: $59,196.00 | Total Cost: $109,196.00
If amortized from the start over 30 years, the payment would be $349.58/mo with total interest of $75,848.80 — saving $16,653 in interest by using the HELOC structure.
A borrower with a $350,000 home and $220,000 mortgage uses a $40,000 HELOC at 8.0% to pay off high-interest credit card debt.
Draw Period (10 years): $266.67/mo (interest-only)
Repayment Period (20 years): $334.48/mo (amortizing)
Total Interest: $48,275.20 | Total Cost: $88,275.20
Compared to paying 22% APR on credit card minimums, consolidating with a HELOC typically saves thousands in interest costs.
A borrower needs $75,000 at 6.0% and compares a HELOC (10-year draw + 20-year repayment) vs a standard 30-year amortizing loan.
HELOC: Draw: $375.00/mo → Repay: $537.21/mo — Total Interest: $77,930.40
Standard 30-Year Loan: $449.66/mo (fixed) — Total Interest: $86,877.60
The HELOC saves $8,947 in interest but requires a higher payment during the repayment phase. Consider your cash flow needs carefully.
A Home Equity Line of Credit (HELOC) is a revolving credit line secured by your home equity. It typically has two phases: a draw period where you pay only interest on the amount borrowed, followed by a repayment period where payments become fully amortizing to pay off the balance.
Lenders typically cap the combined loan-to-value (CLTV) at 80–90%. This includes your first mortgage plus the HELOC limit combined.
Most HELOCs have variable rates tied to the prime rate. Your payment can change when the prime rate moves. Consider a fixed-rate HELOC for predictable payments.
You don't have to draw the full credit limit. Only the amount you actually borrow generates interest. This calculator uses your draw amount.
During the draw period, you're not building equity through payments. If home values decline, you could owe more than the home is worth (underwater).
The initial phase (typically 10 years) where you can borrow from the credit line and only pay interest on what you've drawn.
The second phase (typically 20 years) where you can no longer draw funds and must repay the outstanding balance with amortizing payments.
Most HELOCs have variable interest rates based on the prime rate plus a margin. Some lenders offer fixed-rate conversion options.
The significant increase in monthly payments when the draw period ends and amortizing payments begin. Plan ahead for this transition.
A Home Equity Line of Credit (HELOC) is a revolving credit line secured by the equity in your home. It works similarly to a credit card — you have a credit limit based on your home equity, and you can borrow against it as needed. However, unlike a credit card, a HELOC typically has much lower interest rates because it's secured by your property.
HELOCs are divided into two distinct phases. During the draw period (usually 10 years), you can borrow money up to your credit limit and you only need to make interest-only payments on the amount you've drawn. During the repayment period (usually 20 years), you can no longer draw funds and must repay the outstanding balance through fully amortizing payments that include both principal and interest.
Most lenders allow you to borrow up to 80–90% of your home's value minus your current mortgage balance. This is called your combined loan-to-value ratio (CLTV). For example, if your home is worth $500,000 and you owe $300,000 on your mortgage, you have $200,000 in equity. At 80% CLTV, your maximum HELOC limit would be ($500,000 × 80%) − $300,000 = $100,000.
The most popular use of HELOCs. Renovations, additions, and repairs can increase your home's value while using its existing equity.
Pay off high-interest credit card debt with a lower-rate HELOC. This can save thousands in interest and simplify your monthly payments.
Finance college tuition or other educational expenses at a lower interest rate than private student loans or credit cards.
Some homeowners open a HELOC as a backup emergency fund, drawing on it only when unexpected expenses arise.
While both HELOCs and home equity loans allow you to borrow against your home equity, they work differently:
Revolving credit line. Borrow as needed during the draw period. Variable interest rate. Interest-only payments during draw. Flexible — only pay interest on what you use.
Lump sum disbursed upfront. Fixed interest rate. Fixed monthly payments (fully amortizing from day one). Predictable payment schedule. Better for one-time expenses.
HELOCs typically have variable rates (often prime + margin). Home equity loans have fixed rates. Variable rates can rise, increasing your payments over time.
HELOCs start with lower interest-only payments but may face payment shock when the repayment period begins. Home equity loans have the same payment for the entire term.
Our HELOC Payment Calculator is designed to give you a complete picture of the costs associated with a home equity line of credit. Here's how to use it effectively:
Start by entering your home value and current mortgage balance to calculate your available equity. Then enter the draw amount — how much you actually plan to borrow — along with the interest rate, draw period length, and repayment period length.
The calculator will show you your interest-only monthly payment during the draw period, your amortizing monthly payment during the repayment period, and the total interest and cost over the full life of the HELOC. It also compares the HELOC structure against a standard amortizing loan to show potential savings or costs.
Use this information to evaluate whether a HELOC is the right financing option for your needs, and to plan ahead for the payment increase when the draw period ends.
⚠️ Important Disclaimer: This HELOC Payment Calculator is for informational and educational purposes only. It provides estimates based on standard HELOC structures and does not account for variable interest rate changes, fees (appraisal, annual, closing costs), prepayment penalties, or other terms that may be part of your actual HELOC agreement. Most HELOCs have variable rates that can change based on market conditions. Results should be verified with your lender or financial advisor before making any financial decisions. This calculator does not provide financial advice. Borrowing against your home equity carries the risk of foreclosure if you are unable to make payments.