HELOC Payment & Draw Period Calculator

A Home Equity Line of Credit (HELOC) works differently from a traditional loan. Instead of receiving a lump sum, you get access to a revolving credit line secured by your home's equity—like a credit card backed by your house. This flexibility makes HELOCs popular for home improvements, debt consolidation, and emergency funds, but the two-phase payment structure catches many borrowers off guard.

During the draw period (typically 5-10 years), you can borrow and repay repeatedly up to your credit limit. Payments during this phase are often interest-only, keeping monthly costs low. But when the draw period ends and the repayment periodbegins (typically 10-20 years), you can no longer borrow—and payments spike because you're now paying both principal and interest.

This payment jump, called "payment shock," can be dramatic. A borrower paying $500/month during the draw period might suddenly owe $1,200/month in repayment. Without planning, this can strain household budgets significantly. This calculator helps you see exactly what to expect in both phases so you can plan ahead.

Whether you're considering a new HELOC, approaching the end of your draw period, or trying to understand your current loan, this tool models your payments across both phases with adjustable rate scenarios and payment options.

The Draw Period: Low Payments, Maximum Flexibility

During the draw period, most HELOCs require only interest-only paymentson your outstanding balance. You're not required to pay down principal, so payments stay low. Example: A $75,000 balance at 8% = $500/month interest-only payment. You can draw more funds, repay some, then draw again—the line revolves like a credit card.

The Repayment Period: The Payment Jump

When the draw period ends, everything changes:

• You can no longer borrow additional funds
• The balance "freezes" and must be paid off over the repayment term
• Payments now include both principal AND interest (fully amortizing)
• Monthly payment increases significantly—often 50-100% or more

Why the Payment Shock Happens

Let's compare: $100,000 balance at 8%:

• Draw period (interest-only): $667/month
• Repayment period (15 years): $956/month (+43%)
• Repayment period (10 years): $1,213/month (+82%)

The shorter the repayment term, the higher the payment jump.

Variable Rates Add Uncertainty

Unlike fixed-rate loans, most HELOCs have variable interest rates tied to the prime rate plus a margin. When the prime rate rises, your payment rises—in both draw and repayment periods. A rate increase from 7% to 9% on a $100,000 balance raises interest-only payments from $583 to $750/month.

HELOC vs. Home Equity Loan

A home equity loan gives you a lump sum with fixed payments from day one. A HELOC offers flexibility with variable rates and two-phase payments. HELOCs work better if you need funds over time; home equity loans work better for one-time expenses with predictable payments. Compare loan options with our Loan Comparison Calculator.

Step 1: Enter Your Credit Line Details

Input your total credit limit and current balance. If you've drawn $50,000 of a $100,000 HELOC, enter both numbers. You can also specify planned additional draws if you intend to borrow more during the draw period.

Step 2: Set Your Time Periods

Enter how many months remain in your draw period and how long your repayment period will be (in years). Check your HELOC agreement for these terms—they significantly affect your payment calculations.

Step 3: Enter Interest Rate Information

Input your current APR. Optionally, enter an assumed future rate to see how a rate increase would affect payments. This is especially useful for planning since HELOC rates are variable.

Step 4: Choose Payment Options

Select your minimum payment rule: interest-only (most common) or interest plus a percentage of principal. Some HELOCs require small principal payments even during the draw period—check your loan terms.

Step 5: Review Both Payment Phases

Click Calculate to see payments for both the draw period and repayment period. The results show the payment difference, total interest, and how your balance changes over time. Charts visualize the payment timeline.

Step 6: Model "What If" Scenarios

Use the simulation options to see worst-case scenarios (full draw at max limit) or best-case (no further draws). The AI assistant can help you understand specific scenarios like "What if I pay $200 extra monthly during the draw period?"

Interest-Only Payment Formula (Draw Period)

During the draw period with interest-only payments:

Example: $75,000 balance at 8% APR = $75,000 × (0.08 ÷ 12) = $500/month

This payment covers only interest—your balance stays the same unless you make additional principal payments.

Amortizing Payment Formula (Repayment Period)

When repayment begins, payments use the standard amortization formula:

Where P = principal balance, r = monthly rate (APR ÷ 12), n = number of payments.

Calculating Payment Shock

Example: $100,000 balance at 8% entering a 15-year repayment:

• Interest-only payment (draw): $100,000 × 0.08 ÷ 12 = $667
• Amortizing payment (repay): $100,000 × [0.00667(1.00667)^180] / [(1.00667)^180 - 1] = $956
• Payment increase: $956 - $667 = $289/month (+43%)

How Rate Changes Affect Payments

Variable-rate HELOCs typically adjust with the prime rate. If your HELOC is "Prime + 1%" and prime rises from 7.5% to 8.5%, your rate goes from 8.5% to 9.5%. On a $75,000 balance:

• Old interest-only payment: $531
• New interest-only payment: $594
• Increase: $63/month just from the rate change

Impact of Repayment Term Length

$100,000 at 8% with different repayment terms:
• 20-year repayment: $836/month
• 15-year repayment: $956/month
• 10-year repayment: $1,213/month
Shorter terms mean higher payments but less total interest.

Scenario 1: Planning for Repayment Shock

Situation: Jennifer has a $150,000 HELOC with $80,000 drawn. Her draw period ends in 2 years, with a 15-year repayment term at 8.5% APR.

Analysis: Current interest-only payment: $567/month. Repayment payment: $788/month. That's a $221/month (39%) increase.

Strategy: Jennifer starts paying $788/month now—treating the draw period like repayment. The extra $221 pays down principal, so when repayment officially starts, she'll owe less and her payments won't jump.

Scenario 2: Home Renovation Planning

Situation: The Garcias have a $200,000 HELOC credit limit with $0 current balance. They're planning a $75,000 kitchen renovation and want to understand future payments. Draw period: 10 years. Repayment: 20 years. Rate: 7.5%.

Analysis: If they draw $75,000: Draw period payment: $469/month (interest-only). Repayment payment: $604/month. They have 10 years at lower payments before the jump.

Strategy: The Garcias plan to pay $604/month from the start, building the habit and paying down principal. By repayment time, they'll owe significantly less.

Scenario 3: Rising Rate Concern

Situation: Michael has $120,000 drawn on his HELOC at 7% (Prime + 1%). He's worried rates will rise. Draw period has 5 years remaining; repayment is 15 years.

Analysis: Current: $700/month interest-only. If prime rises 2%: $900/month. When repayment starts at 9%: $1,217/month—74% higher than today!

Strategy: Michael considers refinancing to a fixed-rate home equity loan to lock in predictable payments, or accelerates principal payments now while rates are lower.

Scenario 4: Emergency Fund Line

Situation: Sarah has a $50,000 HELOC as an emergency fund. Current balance: $0. She wants to know what payments would look like if she had to draw the full amount.

Analysis: At 8% with 10-year draw, 15-year repayment: Full draw would mean $333/month during draw period, rising to $478/month in repayment.

Strategy: Sarah uses the "simulate full draw" feature to plan for worst-case scenarios, ensuring her budget could handle the maximum payment.

Scenario 5: Approaching Draw Period End

Situation: David's HELOC draw period ends in 6 months. Balance: $95,000. Rate: 8.25%. Repayment term: 10 years.

Analysis: Current payment: $653/month. Repayment payment: $1,167/month. That's an 79% increase—nearly doubling his payment in 6 months.

Strategy: David explores options: (1) Refinance to a new HELOC (restarts draw period), (2) Refinance to a fixed home equity loan, (3) Start paying repayment amount now to build the habit, (4) Pay lump sum from savings to reduce balance.

• ❌ Ignoring payment shock: Many borrowers don't realize their payment will jump significantly when the draw period ends. This calculator shows exactly what to expect—plan for repayment payments from day one.
• ❌ Treating interest-only payments as the norm: Interest-only payments are temporary. They don't reduce your balance, and when repayment starts, you'll still owe everything you borrowed. Make principal payments during the draw period whenever possible.
• ❌ Forgetting about variable rates: HELOCs typically have variable rates. A 2% rate increase on $100,000 adds $167/month to interest-only payments. Model rate increases to see if you can still afford payments if rates rise.
• ❌ Maxing out the credit line: Just because you can draw $150,000 doesn't mean you should. Higher balances mean higher payments—both now and in repayment. Only draw what you truly need.
• ❌ Not knowing your terms: When does your draw period end? How long is repayment? Is your rate Prime + 0.5% or Prime + 2%? Read your HELOC agreement and enter accurate terms into this calculator.
• ❌ Using HELOC funds for depreciating purchases: HELOCs are secured by your home. Using them for vacations, cars, or everyday expenses puts your home at risk for assets that lose value. Best uses: home improvements (add value), debt consolidation (lower rate), or true emergencies.
• ❌ Waiting until repayment to plan: Don't be surprised when repayment starts. Use this calculator years in advance to see what's coming and adjust your financial plan accordingly.

1. Pay Like You're in Repayment

Calculate your repayment payment using this tool, then pay that amount during the draw period. You'll pay down principal, reduce total interest, and when repayment officially starts, you'll already be used to the payment amount— or even owe less than expected.

2. Use Windfalls to Reduce Balance

Tax refunds, bonuses, and unexpected income can dramatically reduce your HELOC balance. A $5,000 extra payment on a $100,000 HELOC at 8% saves ~$400/year in interest—and reduces your eventual repayment payment.

3. Consider Rate Lock Options

Some HELOCs allow you to "lock" a portion of your balance at a fixed rate. This protects against rate increases while keeping the flexibility of a HELOC. Ask your lender about fixed-rate lock features.

4. Refinance Before Repayment Starts

If payment shock will strain your budget, explore options before repayment begins: (1) Refinance to a new HELOC (restarts draw period), (2) Convert to a fixed-rate home equity loan, (3) Cash-out refinance to roll HELOC into primary mortgage. Compare total costs carefully. Use our Refinance Savings Calculator to evaluate your options.

5. Track Your Equity Position

HELOCs are secured by your home equity. If home values drop, you could owe more than your equity allows. Monitor your loan-to-value ratio and avoid drawing to the maximum credit limit during uncertain housing markets.

6. Plan for Rate Increases

Use this calculator's "assumed future rate" feature to stress-test your budget. What if rates rise 2%? 3%? Can you still make payments? If not, consider paying down the balance or refinancing while rates are lower.

7. Understand Balloon Payment Risk

Some older HELOCs require a balloon payment (full balance due) at the end of the draw period instead of entering a repayment period. Review your loan documents carefully. If you have a balloon HELOC, plan refinancing well in advance.