What is HELOC Calculator?
Free HELOC calculator with draw + repayment phase modeling and 3-rate stress test. See your current interest-only payment, the payment shock when the draw period ends, and what happens if Prime rises 1–2%. Free to embed on your website. No signup required.
HELOC runs entirely in your browser using JavaScript (browser). Your data never leaves your device.
Free HELOC Calculator
HELOCs feel cheap during the draw period because you pay interest only — but the payment can double or triple overnight when the repayment phase starts. This calculator quantifies that payment shock before you sign. Enter your balance, rate, and remaining draw period; see the interest-only payment today, the amortizing payment when draw ends, the payment shock in dollars, and how it all changes if rates rise 1–2%. Models extra principal during draw to show how aggressive paydown crushes the payment cliff.
Your HELOC
What you've drawn so far on the line of credit.
HELOCs are variable-rate (typically Prime + margin). Check your most recent statement.
During the draw period you pay interest only. Most HELOCs have a 10-year draw period.
After the draw period ends, the balance amortizes over this many years. Typically 20.
Most HELOCs allow extra principal payments. Adding even $100–$300/mo dramatically reduces the post-draw payment shock.
Current monthly payment (interest-only)
$375.00
When draw period ends
$449.86/mo
That's +$74.86 (20% higher) than your current payment.
Rate stress scenarios
| Rate | Now | After draw | Lifetime int. |
|---|---|---|---|
| 9.00% (today) | $375.00 | $449.86 | $102,967 |
| 10.00% (+1%) | $416.67 | $482.51 | $115,803 |
| 11.00% (+2%) | $458.33 | $516.09 | $128,863 |
HELOCs are variable-rate. The stress rows show what happens if your rate rises 1–2% over the loan's life.
Current monthly payment (interest-only)
$375.00
When draw period ends
$449.86/mo
That's +$74.86 (20% higher) than your current payment.
Rate stress scenarios
| Rate | Now | After draw | Lifetime int. |
|---|---|---|---|
| 9.00% (today) | $375.00 | $449.86 | $102,967 |
| 10.00% (+1%) | $416.67 | $482.51 | $115,803 |
| 11.00% (+2%) | $458.33 | $516.09 | $128,863 |
HELOCs are variable-rate. The stress rows show what happens if your rate rises 1–2% over the loan's life.
Now (interest-only)
$375.00
After draw
$449.86
When to use this HELOC calculator
HELOCs are seductive because the interest-only draw payments are tiny — often half of what a traditional home equity loan or refinance would cost. But the structure has a sting in the tail: when the draw period ends (typically after 10 years), the entire outstanding balancestarts amortizing over a much shorter window, and your monthly payment can double or triple overnight. This calculator quantifies that payment shock before you ever sign the line.
Use it whenever you're considering opening a HELOC, when you're partway through one and wondering what the payment cliff looks like, or when rates have moved and you want to model +1% or +2% scenarios. HELOCs are variable-rate — most are tied to Prime — so the rate you qualify for today may not be the rate you're paying in year 8. The rate-stress table in the results panel models exactly that.
How HELOC payments actually work
A HELOC has two distinct phases, and the math for each is completely different:
Phase 1: The draw period
During the draw period (typically 10 years), you can borrow up to your credit limit and your required monthly payment is interest-only on the outstanding balance. The formula is straightforward:
monthly_payment = balance × annual_rate ÷ 12
On a $50,000 balance at 9%, that's 50,000 × 0.09 ÷ 12 = $375/month. You can pay more if you want (and most HELOCs encourage it), but you don't have to. This is why HELOCs feel cheap up front. The catch: paying only the minimum means your balance never goes down, and when the draw period ends you still owe every dollar you borrowed.
Phase 2: The repayment period (the payment cliff)
When the draw period ends, no more draws are allowed and the outstanding balance amortizes over the repayment term (typically 20 years). The monthly payment uses the standard amortization formula:
M = P × r × (1+r)n ÷ ((1+r)n − 1)
On the same $50,000 balance at 9% over 240 months, the new payment is $450/month. That's a 20% jump — and on higher balances or higher rates, the jump is much steeper. A $100,000 HELOC at 11% jumps from $917 interest-only to about $1,032 amortizing — manageable. But the same line at 8% draw to 11% repayment (rates rose during your draw) goes from $667 to $1,032: a 55% increase. The rate-stress table in the results panel shows these scenarios directly.
Why extra principal during draw is so valuable
Every dollar of principal you pay during the draw period does double duty: it reduces your current interest (because the next month's interest is calculated on a lower balance), and it reduces the amortizing balance you'll face when the draw period ends. Even a modest $200/month extra over 10 years pays down $24,000 of principal — turning a $50,000 balance into $26,000 at the end of draw, which cuts the amortizing payment from $450 to about $235. Use the “extra principal during draw” input to model your strategy.
Common HELOC mistakes to avoid
- Paying only the interest-only minimum. 10 years of interest payments with the principal balance never going down. You owe just as much at the end as the start, and the amortizing payment hits hard.
- Forgetting HELOCs are variable. The Prime rate can move 2–3% in a tightening cycle. Always run the +1% and +2% scenarios — that's your real worst case.
- Using a HELOC for a depreciating purchase. Vacations, cars, consumer goods — paying for them with home equity means a 30-year loan against your house for a short-lived item. The math almost never works.
- Maxing out the line. Your credit limit isn't a target — it's a ceiling. Drawing 90%+ of available credit hurts your credit score and leaves no margin for emergencies.
- Not understanding the rate floor / ceiling. Some HELOCs have rate floors (you don't get the benefit if Prime drops below the floor) and lifetime caps (caps how high it can go). Read your note carefully.
- Ignoring the tax-deduction change. Post-2017 TCJA, HELOC interest is only tax-deductible when the proceeds “substantially improve” the home that secures the loan. Using a HELOC to pay off credit cards no longer gives you a deduction.
Frequently Asked Questions
What is the payment shock on a HELOC?+
When the draw period ends (typically after 10 years), you can no longer borrow against the line, and the entire outstanding balance starts amortizing over the repayment period (typically 20 years). Your monthly payment goes from interest-only — which can be very small — to a fully amortizing payment that includes principal. The difference is called payment shock, and on a $50,000 balance at 9% it's about $75/month (20% jump). On a $150,000 balance with rising rates, it can be $300–$700/month or more. This calculator shows your exact payment shock.
How is the interest-only payment calculated?+
Interest-only payment = balance × annual rate ÷ 12. On a $50,000 balance at 9% that's 50,000 × 0.09 ÷ 12 = $375/month. The principal balance does NOT go down with this payment — every dollar you pay is interest. You can pay more if you want (and on most HELOCs you should), but interest-only is the minimum.
How is the repayment-period payment calculated?+
When the draw period ends, the outstanding balance amortizes over the repayment term using the standard amortization formula: M = P × r(1+r)^n / ((1+r)^n − 1). For a $50,000 balance at 9% over 240 months, that's about $450/month. You can prepay during the repayment period if you want to pay it off faster.
Why do HELOC rates change?+
Most HELOCs are variable-rate, tied to the Prime Rate plus a margin (e.g. Prime + 1.5%). The Prime Rate moves with the Federal Reserve's Federal Funds Rate — when the Fed raises rates, your HELOC rate rises too, usually within a billing cycle. Between 2022 and 2024, Prime moved from 3.25% to 8.50% — a 5.25-point jump. The rate stress table shows what happens to your payment in milder +1% and +2% scenarios.
Is HELOC interest tax-deductible?+
Only when the proceeds are used to "buy, build, or substantially improve" the home that secures the loan, per the 2017 Tax Cuts and Jobs Act (IRC § 163(h)(3)(F)). Using a HELOC to pay off credit cards, fund a vacation, or pay tuition does NOT qualify for the deduction under current law (set to expire after 2025, but currently in effect). Even when deductible, you must itemize to take the benefit.
Should I prepay principal during the draw period?+
In most cases, yes — strongly. Every dollar you pay against principal during draw reduces both your current interest cost AND your future amortizing payment. A $200/month extra principal payment over 10 years pays down $24k of principal, which can cut your post-draw payment in half. The "extra principal during draw" field models this directly. The only reason not to prepay is if you have higher-interest debt elsewhere — pay that off first.
What happens if I can't afford the new payment when the draw period ends?+
Your options are: refinance the HELOC into a fixed home equity loan (locks in the rate but you'll qualify based on income), refinance into a new first mortgage that pays off both your existing mortgage and the HELOC (cash-out refi), sell the home to pay it off, or work with the lender on a modification (rare). The best strategy is to prevent the cliff: prepay principal during draw, use the rate stress table to plan for the worst case, and set aside a buffer in the last 1–2 years of draw.
HELOC vs home equity loan — which is better?+
A HELOC is a flexible line of credit with a variable rate, interest-only draws, and a payment cliff. A home equity loan is a fixed-rate, fixed-payment lump-sum loan from day one. Use a HELOC for unpredictable expenses (gradual home renovation, business cash flow) where flexibility matters. Use a home equity loan for a specific lump-sum purpose (one big remodel, debt consolidation) where you want rate certainty. Many borrowers regret HELOCs after the draw period ends; few regret home equity loans.
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