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HELOC Calculator

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Enter your HELOC balance and interest rate to find your interest-only payment during the draw period.

HELOC Calculator

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Interest-only payment (draw period)
$333.33/mo
Annual interest
$4,000.00
Most HELOCs have a variable rate that resets periodically - this payment will change if your rate does. Repayment-period payments (after the draw period ends) are typically higher, since they include principal.

The formula

Monthly interest-only payment = Outstanding balance x (Annual rate / 12)
Example

A $50,000 balance at 8%: monthly payment = 50,000 x (0.08/12) = $333.33, or $4,000/year in interest.

Step-by-step guide

  1. Enter your current outstanding HELOC balance.
  2. Enter your current interest rate (check your statement - HELOC rates are usually variable).
  3. Read your interest-only monthly payment.

Why your payment can jump sharply when the draw period ends

A HELOC typically has two phases: a draw period (often 10 years) where you can borrow, repay, and re-borrow against the credit line, usually paying interest-only as calculated here, followed by a repayment period where the line closes and you must pay down both principal and interest - often over 10-20 years. Because the interest-only payment shown here doesn't reduce the balance at all, borrowers who only ever paid the minimum during the draw period sometimes face a significant payment increase when the repayment period begins and principal payments kick in for the first time.

Common mistakes

Assuming this interest-only payment is your permanent payment - once the draw period ends, the repayment-period payment is typically much higher since it includes paying down principal.
Ignoring that most HELOC rates are variable - your actual payment will change over time as the underlying rate moves, unlike a fixed-rate loan.

Frequently asked questions

What's the difference between a HELOC and a home equity loan?

A home equity loan gives you a lump sum with a fixed rate and fixed payment, similar to a second mortgage. A HELOC is a revolving credit line, similar to a credit card, that you can draw from repeatedly up to your limit, typically with a variable rate.

Why is my rate variable instead of fixed?

Most HELOCs are tied to a benchmark rate (like the prime rate) plus a margin set by the lender, meaning your rate - and payment - can rise or fall as that benchmark moves. Some lenders offer the option to fix a portion of the balance at a set rate.

Can I pay more than the interest-only minimum?

Yes, and it's often a good idea if you can - any extra payment during the draw period reduces your principal balance, lowering both future interest charges and the eventual repayment-period payment.

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