Crunch HELOC Calculator
A home equity line has two lives: the draw period, when payments can be interest-only, and the repayment period, when the whole balance amortizes. This calculator prices both phases — and shows what paying principal during the draw does to the second, bigger bill.
HELOC rates are variable — this model holds the rate you enter steady so you can see the phase mechanics. Re-run it 2 points higher to see your exposure if rates rise.
How it works
During the draw period the required payment is interest-only: balance × APR ÷ 12, and the balance never falls unless you pay extra. When the draw ends, the remaining balance switches to a standard amortizing payment over the repayment period — the same formula as any loan. Total interest is the sum of both phases, which is why the draw period is not "free": every interest-only month is interest with zero progress.
Formula & worked example
Formula: Payments have two phases. Draw phase (interest-only): payment = balance × APR ÷ 12, and the balance only falls by any extra principal you pay. Repayment phase: the standard amortizing payment, balance × r ÷ (1 − (1 + r)^−n) with r = APR ÷ 12, over the repayment months. Total interest is the sum of both phases.
Worked example: Draw $20,000 at 8%: the draw-phase payment is $133.33 a month, and five interest-only years cost $8,000.00 with the balance untouched. A 10-year repayment phase then charges $242.66 a month and adds $9,118.62 more interest — $17,118.62 total. Paying $100 a month extra during the draw cuts the balance to $14,000, the draw interest to $6,820.00, and the repayment payment to $169.86.
Frequently asked questions
What is the payment on a $20,000 HELOC draw at 8%?
Interest-only, it is $133.33 a month during the draw period. After a 5-year draw, a 10-year repayment period turns the same $20,000 into a $242.66 monthly payment, and the total interest across both phases reaches $17,118.62.
Why does the payment jump when the draw period ends?
Because the second phase must retire the whole balance, not just feed it interest. On the example above the payment rises from $133.33 to $242.66 — an 82% jump. Knowing that number before you draw is the entire point of this calculator.
Does paying extra during the draw help?
Enormously, because every dollar of principal you remove skips interest in both phases. Add $100 a month during a 5-year draw on $20,000 at 8% and the balance entering repayment is $14,000, the repayment payment drops to $169.86, and you save thousands in interest.
What rate should I enter for a variable HELOC?
Start with today’s rate, then re-run at +2%: a variable line reprices with the prime rate, and the honest question is whether the repayment-phase payment still fits your budget at the higher rate.
🧾 Comparing a fixed loan instead?
The APR Calculator prices a plain installment loan with fees counted — the honest alternative to a variable line.