HELOC Payment Calculator
A home equity line of credit, or HELOC, usually has two phases: a draw period when you can borrow and typically pay interest only, and a repayment period when principal is added in. This calculator covers the draw-period payment, which is the most common question, by computing the interest-only monthly amount on your current balance. Interest-only means each payment equals the balance multiplied by the monthly interest rate, with nothing going to principal, so the balance stays the same until you pay principal or enter repayment. This calculator takes your outstanding balance and the annual interest rate and returns the interest-only monthly payment. Enter a 50,000 dollar balance at 8.5 percent and the tool returns about 354.17 dollars per month. HELOC rates are often variable, so it is worth checking the payment at a higher rate to see how an increase would affect your budget. Remember that interest-only payments do not reduce what you owe, so the full balance remains due later. Because the calculation is a single multiplication of balance, rate and time, every figure is computed deterministically. The complete formula and a worked example that reconciles exactly to the calculator above appear in full below for you to follow step by step.
During the draw period a HELOC is usually interest-only: payment = balance x annual rate / 12. A $50,000 balance at 8.5% costs $354.17 per month, and the principal stays unchanged until you repay it.
HELOC interest-only payment formula
interest-only payment = balance x (annual rate / 12)
balance = outstanding amount drawn
annual rate / 12 = monthly interest rate (as a decimal)
During the draw period, the payment is just the month's interest on the balance: balance times the monthly rate. No principal is repaid, so the balance does not fall unless you pay extra.
Worked example
A HELOC balance of 50,000 dollars at an 8.5 percent annual rate, interest-only.
- Monthly rate = 8.5% / 12 = 0.0070833
- Interest-only payment = 50,000 x 0.0070833
- = 354.17 dollars per month
- Principal reduced each month = 0 (interest-only), so the balance stays at 50,000
These are the calculator's default inputs, so the result above matches the widget exactly.
HELOC Payment Calculator: frequently asked questions
What is a HELOC draw period?
It is the early phase of a home equity line of credit when you can borrow against your limit and usually pay interest only. After it ends, the repayment period begins and payments rise to include principal.
How is the interest-only payment calculated?
Multiply the outstanding balance by the monthly interest rate, which is the annual rate divided by 12. That product is the interest due for the month, and during the draw period it is the whole payment.
Does an interest-only payment reduce my balance?
No. Interest-only payments cover only the month's interest, so the principal stays the same. The full balance remains due, and payments jump when the repayment period adds principal back in.
Why does my HELOC payment change?
Most HELOCs carry a variable rate tied to an index, so the payment moves as rates change. Try a higher rate in the calculator to see how an increase would affect your monthly interest-only payment.
Is interest-only borrowing risky?
It can be, because the debt does not shrink and payments rise later. The US Securities and Exchange Commission's Investor.gov stresses understanding how a loan's payments change over time before borrowing against your home.
Official sources
- Loans, interest and borrowing basics: US Securities and Exchange Commission, Investor.gov. As at 25 June 2026.
Reviewed by the CalculatorHub team, edited by James Graham, 25 June 2026. See our methodology. This is general information, not financial, tax, legal or investment advice.