HELOC Payment Calculator
Calculate how your HELOC payment will jump when the draw period ends and full principal-plus-interest repayment begins, especially if rates are expected to change. Use it to prepare for payment shock before it hits.
About this calculator
A Home Equity Line of Credit (HELOC) has two phases. During the draw period, you typically pay interest only on the outstanding balance: interestOnly = balance × (rate / 12). When the draw period ends, the line closes and the balance converts to a fully amortizing repayment loan. If rates change at that transition — common with variable-rate HELOCs tied to the prime rate — both the rate and the payment structure shift simultaneously. The repayment payment is calculated with the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where r = (currentRate + expectedRateChange) / 12 / 100 and n = repaymentPeriod × 12. The result is the difference between the repayment payment and the current interest-only payment, showing the exact monthly payment increase you need to budget for.
How to use
You have a $80,000 HELOC balance at 8.5%, with a 15-year repayment period and an expected rate increase of 1% at repayment. Current interest-only payment: $80,000 × (0.085/12) = $567/month. Repayment rate: (8.5 + 1) / 100 / 12 = 0.7917%/month, n = 180. Repayment payment: $80,000 × [0.007917 × (1.007917)^180] / [(1.007917)^180 − 1] ≈ $845/month. Payment increase = $845 − $567 = $278/month — a 49% jump to prepare for.
Frequently asked questions
What happens to HELOC payments when the draw period ends?
When the draw period ends (typically 5–10 years), you can no longer borrow from the line and the outstanding balance converts to a fixed repayment schedule. Your payment changes from interest-only to fully amortizing, meaning each payment now covers both principal and interest over the repayment term. This transition — often called payment shock — can double or nearly triple your monthly obligation, particularly if you've drawn a large balance or if rates have risen. Planning ahead with this calculator helps you decide whether to start paying down principal during the draw period to reduce that future shock.
How does a variable interest rate affect HELOC repayment payments?
Most HELOCs use a variable rate tied to the prime rate plus a margin, so your payments fluctuate as the Federal Reserve adjusts monetary policy. A 2% rise in the prime rate translates directly into a 2% increase in your HELOC rate, raising both your current interest-only payments and your future repayment payments. The expected rate change field in this calculator lets you stress-test different scenarios — for example, modeling what happens if rates rise another 1%–3% by the time your draw period ends. Building in a rate buffer ensures you're not caught off guard.
Should I pay down my HELOC balance before the repayment period starts?
Paying down your HELOC balance before the draw period ends is one of the most effective ways to reduce future payment shock because the repayment payment is proportional to the outstanding balance at conversion. Even reducing the balance by 20%–30% during the draw period can meaningfully lower the fully amortizing payment. If you have surplus cash flow now, comparing the guaranteed interest savings on the HELOC (at its current variable rate) against other uses of capital — like higher-yielding savings accounts — can guide the decision. In rising rate environments, aggressively paying down a variable-rate HELOC often provides a compelling guaranteed return.