A HELOC calculator estimates the two very different monthly payments on a home equity line of credit: the small interest-only payment during the draw period, and the larger fully-amortizing payment when the repayment phase begins. This calculator estimates HELOC payments using outstanding balance, current variable rate, draw years remaining, and repayment-phase length, expressed as a draw-period interest-only payment, a repayment-phase amortizing payment, the payment-shock dollar increase, and total interest across both phases.
HELOCs operate in two phases by design. During the draw period (typically 5 to 10 years), you can borrow against the line as needed and pay only interest on the outstanding balance. When the draw period ends, no further borrowing is allowed and the loan re-amortizes over the repayment term (typically 10 to 20 years), paying the balance to zero by the end. The Consumer Financial Protection Bureau highlights this two-phase structure, plus the variable rate, as the source of the payment-shock risk that distinguishes HELOCs from fixed-rate home equity loans (per the CFPB, 2024).
Two compounding risks deserve attention. First, the rate is variable, usually set as the Wall Street Journal prime rate plus a lender margin; the prime rate sat at 7.50 percent as of early 2025 (per the Federal Reserve H.15 release, 2025), so a HELOC at prime plus 1.5 carries a 9.00 percent rate that can move every month. Second, payment shock at the draw-to-repayment transition can lift the monthly payment 35 percent or more overnight, and 2 to 3 times for shorter repayment terms. The home is collateral; default risks foreclosure.
Key takeaway
Plan for the repayment phase from day one. The interest-only draw payment is not what your HELOC actually costs; it's a temporary teaser period that ends abruptly. Build the repayment-phase payment into your budget today, treat the difference as forced savings, and you'll have either a fund to pay down the balance early or a buffer when the payment jumps. HELOCs are powerful tools, and one of the most common drivers of mid-life foreclosures.
How it's calculated
HELOC math is two formulas glued together at the phase transition.
Draw-period interest-only payment: M_draw = Balance × (Rate ÷ 12)
Each month you pay only the interest accrued on the current balance. Principal doesn't go down unless you make voluntary additional payments. This is the "easy" phase that lulls borrowers into bad habits.
Repayment-phase amortizing payment: M_repay = Balance × r(1+r)^n / ((1+r)^n − 1)
Standard mortgage amortization: r is the monthly rate (annual ÷ 12), n is the repayment-phase months (years × 12). This payment fully pays off the balance by the end of the repayment term, including all remaining interest.
Payment shock = M_repay − M_draw. The shorter your repayment phase and the higher your balance, the larger the shock. Total interest across both phases assumes the rate stays constant, in reality, the variable rate makes total interest unknowable in advance.
Source: Standard amortization formula combined with simple interest-only HELOC draw payments
Examples
$50,000 balance at 9.0%, 5 draw years remaining, 15-year repayment
- Outstanding HELOC balance $50,000
- Current variable rate 9%
- Draw years remaining 5 years
- Repayment phase length 15 years
On a $50K HELOC balance at 9.0% with 5 draw years left and a 15-year repayment phase, the interest-only payment is $375/month, feels manageable. When the repayment phase begins, the payment jumps to $507/month, a $132 monthly increase (35% jump). Total interest across both phases is roughly $63,784, assuming the rate stays at 9% the entire time, which it almost certainly won't. At a more realistic average rate (with rate volatility factored in), total interest could easily exceed $75K.
$100,000 balance at 9.5%, 3 draw years remaining, 10-year repayment
- Outstanding HELOC balance $100,000
- Current variable rate 9.5%
- Draw years remaining 3 years
- Repayment phase length 10 years
Higher balance, shorter repayment phase: $100K at 9.5% with 3 draw years and a 10-year repayment. Draw payment $792/month; repayment-phase payment $1,294/month, a $502 jump (63% increase). This is a textbook payment-shock scenario: a borrower comfortable with $792 may not be able to absorb $1,294. Total interest assuming a flat rate is about $83,800. Borrowers in this position should aggressively pay down principal during the remaining 3 draw years or refinance into a fixed rate before the transition.
Frequently asked questions
What is HELOC payment shock and why does it matter?
Payment shock is the sudden monthly-payment increase when a HELOC moves from its interest-only draw period to its fully-amortizing repayment phase. The interest-only payment doesn't pay any principal, when amortization kicks in, the same balance must be paid off (with interest) over the remaining term, which can double or triple the monthly payment overnight. Borrowers who budgeted around the small draw-period payment can find themselves unable to afford the new payment, leading to late payments, refinancing into worse terms, or foreclosure. Always model the repayment-phase payment before opening a HELOC.
Why are HELOC rates variable?
HELOCs are typically priced as prime rate plus a margin (e.g., prime + 1.5%), and the rate adjusts whenever the WSJ prime rate changes, usually monthly. This is fundamentally different from a fixed-rate mortgage or home equity loan. When the Federal Reserve raises rates, your HELOC payment rises within 30–60 days. Some HELOCs offer fixed-rate conversion options on portions of the balance; otherwise, the only way to lock the rate is to refinance into a fixed-rate product like a home equity loan or cash-out refi. Variable-rate exposure is the biggest hidden risk of HELOC borrowing.
Can I lose my home with a HELOC?
Yes. A HELOC is secured by your home, typically as a second lien behind your primary mortgage. If you default, the HELOC lender can foreclose, just like a primary mortgage holder. Because the HELOC is junior to the first mortgage, the first mortgage gets paid first from any foreclosure proceeds, but if there's enough equity to cover both, you lose the home. This is what makes HELOCs categorically different from credit cards or unsecured personal loans: the worst-case outcome of HELOC default is losing your house. Borrow only what you can repay across both phases, factoring in realistic rate increases.
Should I use a HELOC or a home equity loan?
Use a HELOC when you need flexible, ongoing access to funds with an unknown total, for example, a multi-year renovation, recurring tuition payments, or an emergency reserve you may or may not draw. Use a home equity loan when you have a defined one-time expense with a known cost, a single contractor bid, a debt-consolidation payoff, a one-time medical bill. Home equity loans give you fixed-rate predictability; HELOCs give you draw flexibility but carry variable-rate and payment-shock risk. For most borrowers with a defined expense, the home equity loan is the safer choice.