HELOC Calculator — draw-period & repayment payments, payment shock

How it works

A home equity line of credit (HELOC) works in two phases. During the draw period — 10 years, for example — you can borrow against your credit line, and many plans let you pay only the interest on what you owe: the balance times the monthly interest rate (the annual rate ÷ 12). Because you pay no principal, the balance does not fall. When the draw period ends you enter the repayment period — commonly 10 to 20 years — and the outstanding balance is amortized into fixed payments that cover both interest and principal. That payment is higher, often much higher, than the interest-only payment you were making, and the gap is often called payment shock. Most HELOCs also carry a variable interest rate, so both payments can move over time; this calculator holds the rate constant to show the structure.

Worked example

Take a $50,000 balance at 6% with a 10-year draw period and a 20-year repayment period. During the draw period the interest-only payment is $50,000 × 6% ÷ 12 = $250 a month (Chase). When repayment begins, this calculator amortizes that $50,000 at 6% over 20 years to about $358 a month — a payment shock of about $108. Held to term it computes roughly $65,970 in total interest, since the ten interest-only years pay about $30,000 without reducing the balance at all. Only the $250 draw payment is a published figure (Chase); the repayment payment, the shock, and the lifetime interest are this calculator's own computation for these inputs.

Draw period vs. repayment period (default scenario)

Interest-only method: balance × annual rate ÷ 12 (Bankrate; Chase). Repayment uses standard amortization (LibreTexts §8.05). This estimate assumes the balance stays constant through the entire draw period — no additional draws and no principal paydown — and a constant interest rate. A real HELOC is usually variable-rate, and its balance changes as you borrow and repay, so treat the lifetime-interest figure as an illustration on those assumptions rather than a promise — a rising rate or further draws can push the real total above it. Every figure recomputes live from your own inputs.

Frequently asked questions

What is a HELOC?

A home equity line of credit is a revolving loan secured by your home. Instead of a lump sum, you get a credit line you can draw from as needed, up to a limit, and you pay interest only on the amount you have actually borrowed. Because the line is secured by your home, missing payments could cost you the home (CFPB).

What is the difference between the draw period and the repayment period?

The draw period is the years when you can borrow against the line — 10 years is a common example — and many plans allow interest-only payments. The repayment period follows, often 10 to 20 years, during which you can no longer borrow and must repay the outstanding balance with fully amortizing payments of principal and interest.

What does "interest-only" mean during the draw period?

It means your required monthly payment covers only the interest that accrued on your balance — the balance times the monthly rate — and none of the principal. A $50,000 balance at 6% accrues $250 of interest a month (Chase), so that is the minimum payment, and the $50,000 you owe does not go down.

What is payment shock?

Payment shock is the jump in your monthly payment when the line converts from the interest-only draw period to the amortizing repayment period. Because the repayment payment must retire the whole balance over a set number of years, it is higher than the interest-only payment — sometimes much higher, especially if the repayment period is short.

Is a HELOC's interest rate fixed or variable?

Most HELOCs have a variable rate tied to an index such as the prime rate, so your payment can rise or fall over time as rates change. Some lenders offer a fixed-rate option on part of the balance. This calculator assumes a single constant rate so you can see the two-phase structure clearly.

How is a HELOC different from a home equity loan?

A home equity loan gives you a lump sum up front and repays it with fixed amortizing payments from day one — there is no interest-only draw period and no payment shock. A HELOC is a revolving line you draw on as needed, with the two-phase draw-then-repay structure this page models.

How accurate is this, and what doesn't it include?

The two payments are exact for a fixed rate and a fixed balance. The lifetime figures assume you hold the same balance for the entire draw period — no additional draws and no principal paydown — and a constant rate, which real borrowers routinely violate, so the total-interest number is an illustration, not a quote. It also excludes annual fees, closing costs, and rate changes, and it does not estimate how large a line you qualify for. Confirm against your lender's disclosures.