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HELOC Payment Calculator

See your HELOC payment both ways: interest-only and amortizing.

How it is calculated

With the monthly rate i = annual rate ÷ 100 ÷ 12 the tool shows two payments for the same balance. The interest-only payment is balance × i, which never reduces the debt. The amortizing payment is the standard loan formula pmt = balance × i ÷ (1 − (1 + i)−n), where n is the number of monthly payments (the repayment term in months). At a 0% rate the payment is simply balance ÷ n. Total interest is pmt × n − balance. The rate is treated as fixed for the whole term, so a variable-rate HELOC whose rate changes will not follow these numbers, and fees are not included. Balance and months must be above zero.

Worked example

You owe 50,000 at 8.5% a year and will repay it over 120 months. The monthly rate is 8.5 ÷ 100 ÷ 12 = 0.7083%. Interest-only payment: 50,000 × 0.007083 = $354.17. The amortizing payment is 50,000 × 0.007083 ÷ (1 − 1.007083−120) = $619.93. The difference is about $265.76 a month, which is the jump people feel when the draw period ends. Total interest over the 120 payments: 619.93 × 120 − 50,000 = $24,391.41.

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Common mistakes

  • Entering the term in years. The field is months, so a 10-year repayment period is 120, not 10.
  • Using the whole credit limit as the balance. Payments depend on what you have actually drawn, not on the limit.
  • Entering the rate as a decimal such as 0.085. It must be a percentage, 8.5.
  • Assuming the interest-only figure is what you owe forever. It only covers interest, so after a year of paying it the balance is exactly where it started.
  • Expecting the result to match the lender's schedule for a variable rate. This tool keeps one rate for the whole term; if the index rises, the true payment will be higher, and any fees or insurance are not included.

About this calculator

A home equity line of credit (HELOC) typically has two phases: a draw period, during which many lenders only require interest-only payments on whatever balance is drawn, and a repayment period afterward, during which the loan converts to a fully amortizing schedule that pays down both principal and interest. Because HELOC rates are usually variable, tied to a benchmark like the prime rate, payments can also change over the life of the line.

The gap between the two payment types can be large and often catches borrowers off guard when the draw period ends and the payment suddenly jumps to include principal. Using your balance, rate and term, it puts the interest-only draw-period payment next to the fully amortizing repayment-period payment, so the jump between the two is plain to see.

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Comments (1)

  • Editorial team

    HELOC rates usually float, so rerun the calculation with a higher rate to see your exposure. On a 50,000 balance, every extra percentage point adds about 41.67 per month to the interest-only payment, and the amortizing payment rises too. Treat the result as one scenario, not a forecast. What rate steps do you test when you plan around a variable line?

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