Short answer: a HELOC has two lives. During the draw period (often 10 years) you pay interest only — on $50,000 at 8.5%, that’s $354 a month and the balance does not fall by one dollar. During repayment, the full balance amortizes at once, and the payment jumps — here to $492 a month. All-in, that $50,000 line costs $81,127 of interest if you ride both phases to the end. This calculator shows both phases, the payment shock between them, and what extra principal in either phase saves you — the picture the lender’s “payments as low as…” headline leaves out.
| Payment during draw (interest-only) | $0 |
| Interest paid during the draw period | $0 |
| Balance when repayment begins | $0 |
| Payment during repayment (principal & interest) | $0 |
| Interest paid during repayment | $0 |
| Debt-free after | — |
| Credit line still available | $0 |
See the year-by-year schedule
| Year | Phase | Interest that year | Balance at year end |
|---|
Educational estimate only — not financial advice and not a credit offer. Assumes you draw the amount entered once and make no further draws, and that the APR never changes — real HELOCs are usually variable-rate, so rerun this at a rate 2 points higher to see the risk. Payments during draw are interest-only unless you add extra principal. Minimum payments and phase terms vary by lender; your credit agreement governs. Your numbers never leave your browser.
How this calculator works
- Draw phase: monthly payment = balance × (APR ÷ 12), interest only. Unless you add extra principal (there’s a field for it — it’s the single smartest HELOC move), the balance at the end of the draw equals the balance at the start. Total draw interest is simply rate × balance × years when the balance never moves.
- Repayment phase: the balance entering repayment is amortized over the repayment term with the standard formula, Payment = L × i / (1 − (1 + i)^−n), plus any extra monthly principal you enter.
- Assumptions, stated plainly: you draw the entered amount once and never draw again; the APR never changes. Real HELOCs are usually variable-rate, which is why the verdict tells you to rerun at +2% — the chart’s flat draw-period line is the risk in visual form.
The worked example
Credit line $100,000 · drawn $50,000 · APR 8.5% · draw 10 years interest-only · repayment 15 years.
| Amount | |
|---|---|
| Payment during draw | $354.17/mo |
| Interest during draw (balance never moves) | $42,500 |
| Balance entering repayment | $50,000 |
| Payment during repayment | $492.37/mo |
| Interest during repayment | $38,627 |
| Total interest | $81,127 |
| Payment shock at repayment | +$138/mo |
Two comparisons worth a reader’s minute: pay $200/month of principal during a 3-year draw on a $10,000 draw at 9%, and the balance entering repayment drops to $2,800 — total interest for the whole line falls to $2,442. And on a $25,000 draw at 7% (5-year draw, 10-year repayment), adding just $100/month in repayment ends the debt 39 months early and cuts total interest to $15,144.
FAQs
What happens when my HELOC draw period ends? The line closes to new draws and the entire balance converts to an amortizing loan over the repayment term — principal and interest, at the then-current variable rate. The payment jump is the shock this calculator exists to preview: on the worked example it’s $354 → $492, and it arrives whether you’re ready or not.
Is a HELOC cheaper than a home equity loan? During the draw, usually yes on a monthly basis — because you’re not paying principal. Over the full life, the interest-only years are expensive: $42,500 of interest with nothing to show in equity on the example above. Compare total interest, not the teaser payment.
Should I pay extra principal during the draw period? It’s the highest-leverage move on this page: every dollar paid down during the draw stops accruing interest for the rest of the draw and shrinks the balance that hits the repayment cliff. The “extra principal during draw” field quantifies it for your numbers.
What if rates rise after I draw? Most HELOCs are variable, tied to the prime rate. Rerun this calculator 2 points higher: the example’s draw payment rises from $354 to about $437, and total interest climbs by tens of thousands. If that scenario would strain you, the line is too big — that’s the stress test lenders don’t run for you.
Educational content only — not financial advice and not a credit offer. Estimates assume a fixed APR and no further draws; your credit agreement governs actual terms, and HELOC availability, freezes, and rate caps vary by lender and state. Your numbers never leave your browser.
Sources: CFPB: what is a HELOC?, FRED DPRIME (bank prime loan rate) Figures last verified Report a wrong number