Number 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.
When to use this
- A bank offers a home equity line and the low interest-only payment is doing all the selling — you want the second-phase number before you draw.
- You are funding a renovation in stages and want to know what a specific draw amount costs in each phase.
- You can pay some principal during the draw and want to see what that discipline does to the repayment payment.
- Rates are expected to move and you want to test the same draw at a rate a couple of points higher.
How to use it, step by step
- Enter the credit line limit and, separately, the amount you actually plan to draw — interest is charged only on the drawn part.
- Enter today's APR, remembering it is variable.
- Set the draw period and the repayment period in years.
- Add any extra principal you will pay each month during the draw.
- Read the two payments side by side: interest-only now, amortizing later, and the total interest across both phases.
What the inputs mean
| Input | What it is | Typical values |
|---|---|---|
| Amount drawn | The balance you actually take from the line | A single project draw is often $15k–$75k |
| Credit line limit | The maximum the lender lets you draw | Interest applies only to what you draw, not the limit |
| Interest rate (APR) | The variable rate, modelled here as fixed so the phases are visible | Usually prime plus a margin; test it 2 points higher as well |
| Draw period (years) | Interest-only phase when you can still borrow | Commonly 5–10 years |
| Repayment period (years) | Amortizing phase after the draw closes | Commonly 10–20 years |
| Extra principal per month (draw phase) | Principal paid down while only interest is required | Even $100–$200 reshapes the second phase |
Another worked example
Draw $30,000 at 7.75% with a 5-year draw and a 15-year repayment period, and pay $175 a month of extra principal during the draw. The interest-only payment starts at $193.75 a month, the draw phase costs $9,624.53 of interest, and the extra payments cut the balance entering repayment to $19,500.00. The repayment payment is then $183.55 a month — slightly less than the draw payment, because the balance shrank — with $13,538.78 of repayment interest and $23,163.31 of interest across both phases.
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.
What happens if I draw more money later in the draw period?
The new money joins the same balance, so the interest-only payment climbs in direct proportion — the payment is always the current balance times the APR divided by 12 — and the balance that eventually lands in the repayment phase climbs with it. Model the total you expect to have drawn by the end of a project, not just the first cheque, or the second phase will ambush you.
Is the credit line limit the amount I owe?
No. The limit is only the ceiling the lender allows. You owe — and pay interest on — just the amount drawn, which is why this calculator takes the two as separate entries. The undrawn part still matters: it is borrowing capacity sitting against your home, and lenders can freeze or reduce it in some circumstances, so never treat an undrawn line as guaranteed cash.