How much will my HELOC payment be?

How is my HELOC credit line calculated?

Lenders calculate your available HELOC credit line from your home’s value, your existing mortgage balance, and a maximum combined loan-to-value (CLTV) percentage they’re willing to lend against — commonly in the 80–90% range, though the exact cap varies by lender, credit profile, and property type. The formula is:

Available credit line = (Home value × CLTV cap) − Current mortgage balance

Enter your own numbers in the calculator above to see your estimated credit line, your interest-only payment during the draw period, and your fully amortizing payment once repayment begins.

What will I pay during the draw period?

During the draw period (typically 5–10 years), most HELOCs are interest-only: your required monthly payment is just the interest that accrued on whatever balance you have actually drawn, not the full credit line. Drawing less keeps this payment lower; you can also choose to pay down principal voluntarily during this period even though it isn’t required.

Because the rate is variable, this payment moves when the index it’s tied to moves — the calculator above uses the rate you enter as a snapshot, not a guarantee it will stay fixed for the whole draw period.

What happens when the repayment period starts?

Once the draw period ends, you can no longer borrow against the line, and the repayment period begins. Your payment converts to a fully amortizing principal-and-interest payment, calculated to pay off whatever balance you carried into repayment over the remaining term (commonly 10–20 years). Because this payment now includes principal, it is typically noticeably higher than the interest-only draw-period payment on the same balance.

Why does my payment jump when repayment begins?

The jump happens because the draw-period payment only ever covered interest — none of it reduced the balance. When repayment starts, the same balance now has to be paid off in full within the repayment term, so each payment must include a principal portion on top of interest. The larger the balance you carry into repayment, the shorter the repayment term, or the higher the rate, the bigger that jump will be. Some homeowners reduce the jump by paying down principal voluntarily during the draw period.

Sources

• Consumer Financial Protection Bureau — general guidance on home equity lines of credit, draw periods, and repayment periods.
• Internal Revenue Service — Publication 936, Home Mortgage Interest Deduction (for questions about whether HELOC interest is deductible in your situation).

What this calculator is not

This calculator produces an estimate only, using the numbers you enter and standard interest-only / amortization formulas. It is not a loan offer, a rate lock, a credit decision, or a guarantee of the CLTV cap, rate, or terms any specific lender will actually offer you. Actual HELOC terms depend on your credit profile, property, lender, and market conditions at the time you apply, and variable rates can change the payment amounts shown here over time.

FreeRateUpdate operates a network of licensed lenders and brokers and may be compensated if you are matched with and choose to work with a network lender. This calculator does not favor, rank, or discourage any specific lender or product in FRU’s network.

Disclosure: This is general information, not advice about your specific situation.

What is the draw period on a HELOC?

The first years of the line, commonly five to ten, when you can borrow against it. Most HELOCs require only the interest on what you have drawn during that time.

Why does a HELOC payment go up when repayment begins?

Once the draw period ends, the balance is repaid with principal and interest over the remaining term, so the required payment is higher than the interest-only payment before it.

Is a HELOC rate fixed?

Usually not. HELOC rates are typically variable and move with an index, so your payment can change. This calculator uses the rate you enter as a snapshot, not a promise that it will stay the same.