HELOC Payment Calculator
A Home Equity Line of Credit (HELOC) has two phases: a draw period and a repayment period. During the draw period, you can borrow up to your credit limit and typically make interest-only payments. During the repayment period, you can no longer draw funds and must repay the outstanding balance with principal and interest. This calculator helps you understand both payment amounts so you can plan for the transition from low draw-period payments to potentially much higher repayment-period payments, known as payment shock.
HELOC payment formulas
Draw Payment = Balance * (Annual Rate / 12 / 100)
Repay Payment = Balance * r(1+r)^n / ((1+r)^n - 1)
Where r = monthly rate, n = repayment months
The draw-period payment is interest-only on the outstanding balance. When the repayment period begins, the balance is amortized over the remaining repayment term at the prevailing rate. Total interest over repayment = (Repay Payment * repayment months) - Balance.
Managing HELOC payment shock
- Make principal payments during the draw period to reduce the balance before repayment begins.
- If rates rise significantly, consider refinancing the HELOC balance into a fixed-rate home equity loan.
- Budget for the higher repayment payment years before the draw period ends.
- Some HELOCs allow conversion of all or part of the balance to a fixed-rate sub-account.
- Contact your lender to confirm the repayment term and whether a balloon payment is required.
HELOC payments: frequently asked questions
What is a HELOC?
A Home Equity Line of Credit (HELOC) is a revolving line of credit secured by your home's equity. During the draw period (typically 10 years), you can borrow up to your credit limit and usually make interest-only payments. During the repayment period (typically 10 to 20 years), you can no longer draw and must repay the outstanding balance with principal and interest.
How is the draw-period payment calculated?
During the draw period, the monthly payment is interest-only: Payment = Outstanding Balance * Monthly Rate. As a variable-rate product, the rate changes with the prime rate or another index. This calculator uses a fixed input rate to estimate draw-period payments.
How does the repayment period work?
At the end of the draw period, your HELOC balance is fixed and amortized over the repayment term. The payment is calculated using the standard amortization formula: M = P * r(1+r)^n / ((1+r)^n - 1). The payment is typically much higher than the draw-period payment because it now includes principal.
What is payment shock?
Payment shock refers to the large increase in monthly payment when a HELOC transitions from the interest-only draw period to the amortizing repayment period. For a large HELOC balance, the payment can double or triple. Planning for this transition is important.
Can I pay principal during the draw period?
Yes. Most HELOCs allow you to make principal payments during the draw period, which reduces your outstanding balance and thus lowers your draw-period payment and future repayment obligations. Doing so avoids payment shock.
Official sources
- Consumer Financial Protection Bureau: What is a HELOC?
- Federal Reserve: Home Equity Loans and Credit Lines.
Reviewed by the CalculatorHub team, edited by James Graham, 15 June 2026. See our methodology.