Calculate HELOC payments for both the interest-only draw period and principal + interest repayment period. See your full amortization schedule and payment shock analysis.
Draw period + repayment period breakdown
A home equity line of credit (HELOC) has two distinct phases that this calculator models separately. During the draw period — typically 5 or 10 years — you borrow up to your credit limit and make interest-only payments on the outstanding balance. If you draw the full $100,000 on a HELOC at 8.5%, your monthly interest payment during the draw period is $708. That feels manageable. Then the draw period ends and the repayment phase begins — usually 10 or 20 years of full principal plus interest payments on the balance. That $708 interest-only payment becomes $868 per month in P+I over 20 years, or $1,234 if you chose a 10-year repayment term. This "payment shock" surprises many borrowers who didn't plan for it.
HELOCs are variable-rate products tied to the Prime Rate, which is set by the Federal Reserve's federal funds rate decisions. In 2022–2023, the Prime Rate rose from 3.25% to 8.50% in 18 months — and HELOC rates followed automatically, with no opt-out. Homeowners who borrowed heavily on HELOCs during the low-rate era saw payments increase dramatically. Before opening a HELOC, model the payment at rates 2–3 percentage points higher than today's rate to stress-test your budget. The maximum HELOC credit line is typically limited to 85% of combined loan-to-value: on a $500,000 home with a $300,000 mortgage, the max HELOC is $125,000.
Average HELOC APR in May 2026: 8.0%–9.5% (prime rate sensitive). HELOCs are variable — tied to Prime Rate. A 1% Prime Rate increase automatically raises your HELOC rate by 1%, with no advance notice required.
When the draw period ends, your payment can jump 20%–75% overnight. A $100,000 HELOC at 8.5%: draw period = $708/mo (interest only) → repayment = $868/mo over 20 years or $1,234/mo over 10 years.
Lenders cap combined LTV at 85%. Formula: (Home Value × 0.85) minus Mortgage Balance = max HELOC. On a $500k home, $300k mortgage: max HELOC = $125,000. Some lenders go to 90%–95% at higher rates.
HELOCs have variable rates and flexible draws — ideal for phased home improvement projects. Cash-out refis offer fixed rates for the full term — better for large, one-time needs when today's rates are attractive.
A home equity line of credit is a revolving facility secured on your home, and it behaves in two quite different phases. During the draw period, typically ten years, you may borrow and repay freely and the required payment is usually interest only — which keeps payments low but retires no principal at all. When the repayment period begins the line closes and the full balance must amortize over the remaining term, commonly twenty years. The transition produces the notorious HELOC payment shock. Rates are almost always variable, quoted as prime plus a margin, so the payment moves with Federal Reserve policy.
Available credit = (Home value × max LTV) − First mortgage balanceDraw period payment = Balance × (prime + margin) ÷ 12Repayment period payment = amortize balance over remaining termwhere:
Assumptions: Variable rate — the payment changes when prime changes. Interest may be deductible only when the funds are used to buy, build or substantially improve the home securing the loan. The house is collateral, so default risk is loss of the home.
A $480,000 home with a $290,000 first mortgage, an 85% CLTV limit, and $50,000 drawn at 8.5%.
Result$354.17 a month interest-only — rising to $433.91 when repayment begins
That is a 23% jump on an unchanged balance, and a rate rise compounds it. Paying $600 a month during the draw period instead of the required $354 would clear the balance before the repayment period starts and eliminate the shock entirely.