Enter Current home value ($), Mortgage balance ($) and Credit limit ($) and the remaining scenario settings to review draw period payment with this tool. Interest-only payments do not reduce principal.
A HELOC has two phases: the draw period and the repayment period. Here's how the calculations work:
HELOC formulas:
Key insight: During the draw period, you only pay interest. When repayment starts, your payment increases significantly as you pay back principal.
Monthly payment = P × [r(1 + r)^n] ÷ [(1 + r)^n − 1]
P = principal, r = periodic interest rate, n = number of payments.The calculation links Current home value ($), Mortgage balance ($) and Credit limit ($) to draw period payment. Interest-only payments do not reduce principal. When repayment includes principal, the required payment can rise even if the balance has not changed.
Enter Current home value ($), Mortgage balance ($) and Credit limit ($) and the remaining scenario settings to review draw period payment with this tool. Interest-only payments do not reduce principal.
Explore payment scenarios for a home equity line of credit using the phase and repayment assumptions offered by the tool. Distinguish access to credit from the cost of an outstanding draw.
Interest-only payments do not reduce principal. When repayment includes principal, the required payment can rise even if the balance has not changed.
Prepare Current home value ($), Mortgage balance ($), Credit limit ($), Amount borrowed ($), Interest rate (%), Draw period (years), Repayment period (years) and Rate type. Use the amount actually drawn rather than the unused credit limit, and check whether the selected mode includes principal repayment.
Interest-only payments do not reduce principal. When repayment includes principal, the required payment can rise even if the balance has not changed. Actual HELOCs often have variable rates, draw restrictions, fees and phase-specific rules. The home secures the debt; the calculation does not assess suitability.
Use the full settings in the worked-example table. They produce Draw Period Payment: $187; Repayment payment: $278. Compare the method and units as well as the displayed number.
The displayed relationship is Monthly payment = P × [r(1 + r)^n] ÷ [(1 + r)^n − 1] P = principal, r = periodic interest rate, n = number of payments. Use the amount actually drawn rather than the unused credit limit, and check whether the selected mode includes principal repayment.
Actual HELOCs often have variable rates, draw restrictions, fees and phase-specific rules. The home secures the debt; the calculation does not assess suitability. For a transaction or account decision, compare the inputs with the applicable statement, contract or official rules.
Worked heloc calculator example. Set Current home value ($) = 400000; Mortgage balance ($) = 250000; Credit limit ($) = 50000; Amount borrowed ($) = 30000; Interest rate (%) = 7.5; Draw period (years) = 5 years; Repayment period (years) = 15 years; Rate type = Fixed Rate. The corresponding output is Draw Period Payment: $187; Repayment payment: $278. Interest-only payments do not reduce principal.
Explore payment scenarios for a home equity line of credit using the phase and repayment assumptions offered by the tool. Distinguish access to credit from the cost of an outstanding draw.
Use the amount actually drawn rather than the unused credit limit, and check whether the selected mode includes principal repayment.
| Field | Example value | Entry check |
|---|---|---|
| Current home value ($) | 400000 | Check whether this amount is one-time, monthly or annual before entering it. |
| Mortgage balance ($) | 250000 | Use the amount for this scenario in the currency and period shown by the field. |
| Credit limit ($) | 50000 | Use the amount for this scenario in the currency and period shown by the field. |
| Amount borrowed ($) | 30000 | Use the amount for this scenario in the currency and period shown by the field. |
| Interest rate (%) | 7.5 | Enter a percentage in the form requested by the field, keeping its stated time basis. |
| Draw period (years) | 5 years | Use the period unit in the field label; months and years are not interchangeable. |
| Repayment period (years) | 15 years | Use the period unit in the field label; months and years are not interchangeable. |
| Rate type | Fixed Rate | Enter a percentage in the form requested by the field, keeping its stated time basis. |
Relationship used for this example: Monthly payment = P × [r(1 + r)^n] ÷ [(1 + r)^n − 1] P = principal, r = periodic interest rate, n = number of payments.
Interest-only payments do not reduce principal. When repayment includes principal, the required payment can rise even if the balance has not changed.
| Output | Displayed result |
|---|---|
| Draw Period Payment | $187 |
| Repayment payment | $278 |
With these settings, draw period payment is $187. Use the same units and calculation mode when reproducing this example.
Interest-only payments do not reduce principal. When repayment includes principal, the required payment can rise even if the balance has not changed. Actual HELOCs often have variable rates, draw restrictions, fees and phase-specific rules. The home secures the debt; the calculation does not assess suitability.
Replace the illustrative current home value ($) value (400000) with your own value, then complete the other inputs for the same scenario. Use the amount actually drawn rather than the unused credit limit, and check whether the selected mode includes principal repayment.