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    Calculates locally in your browser · draw and repayment
    Home equity / line of credit

    HELOC calculator

    A home equity line of credit is two loans in one: an interest-only draw period, then an amortising repayment period. This calculator shows both payments, the step-up between them, and the total interest — the number that reveals how expensive a long draw period really is.

    Draw10 yrRepay20 yrRate8.50%
    Draw-period payment
    $354.17
    Interest only, no principal reduction
    Repayment payment
    $433.91
    1.23× the draw payment
    Total interest
    $96,639
    Over 30 years
    Payment shock
    +23%
    Step-up when the draw period ends
    Payment schedule
    Interest-only during the draw, fully amortising afterwards.
    30 years total
    Payment schedule
    PhaseMonthsPaymentInterest
    Draw (interest only)120$354.17$42,500
    Repayment240$433.91$54,139
    Total360—$96,639

    Assumes the full balance is drawn at the start and the rate does not change.

    Inspect the model
    Choose a quick result view, a scaled comparison, or the complete diagnostic set.
    Balance over the life of the line
    Flat during the draw period, then falling once repayment starts.
    Balance over the life of the line$0$11.2k$22.4k$33.6k$44.8k$56.0kY0Y0Y2Y2Y4Y4Y6Y6Y8Y8Y10Y10Y12Y12Y14Y14Y16Y16Y18Y18Y20Y20Y22Y22Y24Y24Y26Y26Y28Y28Y30Y30Balance
    Repayment payment against rate
    A HELOC is usually variable, so the repayment payment moves with rates.
    Repayment payment against rate$0$129$258$388$517$6464.3%4.3%5.1%5.1%5.9%5.9%6.8%6.8%7.7%7.7%8.5%8.5%9.4%9.4%10.2%10.2%11.1%11.1%11.9%11.9%12.8%12.8%Payment
    Canonical equations
    The exact relationships implemented by this engine.

    balance × rate / 12 · Interest only; the principal is untouched.

    M = P·i/(1 − (1+i)⁻ⁿ) · Fully amortising over the repayment period.

    repayment / draw payment · Typically 1.2× to 2× depending on the term.

    finance methodology

    A clear path from inputs to results.

    A home equity line of credit is two loans in one: an interest-only draw period, then an amortising repayment period. This calculator shows both payments, the step-up between them and the total interest, which is the number that reveals how expensive a long draw period really is.

    Step-by-step methodWorked exampleAssumptions explained

    How to use

    1. Enter the amount drawn.
    2. Set the variable rate.
    3. Choose the draw period and the repayment period.
    4. Compare the two payments and the step-up between them.

    The formula

    Mdraw=P⋅i,Mrepay=Pi1−(1+i)−nM_{draw} = P \cdot i, \qquad M_{repay} = \frac{P i}{1-(1+i)^{-n}}

    Reference: HELOC structure — interest-only draw, then fully amortising repayment — under Regulation Z open-end credit rules (12 CFR §1026.40).

    Worked example

    $50,000 at 8.5%, 10-year draw and 20-year repayment

    Inputs
    • Amount drawn $50,000.
    • Rate 8.5%.
    • Draw 10 years, repayment 20 years.
    Calculation path
    1. 1

      Draw payment: 50,000 × 0.085/12 = $354.17 interest only.

    2. 2

      Draw-period interest: 354.17 × 120 = $42,500.

    3. 3

      Repayment payment over 240 months: $433.91.

    4. 4

      Repayment interest: 433.91 × 240 − 50,000 = $54,138.79.

    5. 5

      Total interest: $96,638.79. The payment steps up 1.23× when the draw ends.

    Result

    Draw $354.17 → repay $433.91 · total interest $96,639.

    Interpreting the result

    The interest-only period feels cheap because the balance never falls. Over ten years that costs $42,500 with nothing repaid, and then the payment jumps by almost a quarter. A HELOC is a tool for a bridge, not for permanent borrowing.

    Assumptions & limitations

    • The full balance is drawn at the start.
    • The rate stays fixed for the illustration; real HELOCs are variable.
    • No fees, draw-period charges or early-closure penalties.

    Frequently asked questions

    Why is the repayment payment so much higher?

    Because the same balance now has to be repaid over a shorter period, so each payment includes principal as well as interest.

    Can I pay principal during the draw period?

    Usually yes, and it is the single best way to reduce the step-up. The calculator assumes no voluntary principal payments.

    What happens if rates rise?

    The draw payment and the repayment payment both move with the index. A one-point rise adds about $42 a month per $50,000 during the draw.

    Methodology last reviewed 2026-10-21. Results are informational and not financial or engineering advice — see our disclaimer.