A home equity line of credit has two very different phases. During the draw period you usually pay interest only; when repayment starts, the whole balance amortises like a loan. This calculator shows both payments, the interest in each phase and the total cost — plus what an extra monthly payment during repayment would save. HELOC rates are almost always variable, so treat the APR below as today’s rate, not a promise. Everything runs in your browser.
| Phase | Monthly payment | Total interest | Total paid in phase |
|---|---|---|---|
| Draw (interest only) | — | — | — |
| Repayment | — | — | — |
| Whole HELOC | — | — | — |
—
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How it works: draw-phase payment = drawn balance × APR ÷ 12, interest only, so draw interest = that payment × draw months. Repayment payment = the standard amortising payment PMT = P × r ÷ (1 − (1 + r)−n) with r = APR ÷ 12 and n = repayment months, applied to the same balance at the same APR. Total cost = amount drawn + all interest. The extra-payment figures come from a month-by-month amortisation loop at the higher payment.
Interest-only draw payments, the repayment payment that follows, total interest per phase — and what paying extra saves.
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Work out both phases of a home equity line of credit: the interest-only monthly payment during the draw period on the balance you have drawn, then the amortising payment when repayment starts, with total interest in each phase, the total cost, your utilisation of the credit limit, and what an extra monthly payment during repayment saves.
Draw $50,000 of a $100,000 line (50% utilisation) at 8.5% APR. In a 10-year draw period the interest-only payment is $50,000 × 8.5% ÷ 12 = $354.17 a month, and because the balance never falls, draw-phase interest totals $354.17 × 120 = $42,500 (using the unrounded payment). Repayment over 15 years at the same rate uses PMT = P × r ÷ (1 − (1 + r)^−n) with r = 0.085 ÷ 12 and n = 180, giving $492.37 a month and $38,626.56 of repayment interest. Total interest is $81,126.56 and the total cost is $131,126.56. Adding $100 a month in repayment clears the balance in 130 months instead of 180 — 50 months sooner — and saves $12,170.58 of interest.
Draw phase: the monthly payment is interest only — drawn balance × APR ÷ 12 — on a static drawn balance, so draw interest is that payment times the draw months. No new draws and no principal payments are modelled during the draw. Repayment phase: the same balance amortises over the repayment period at the same APR with the standard payment formula PMT = P × r ÷ (1 − (1 + r)^−n), r = APR ÷ 12, n = repayment months; repayment interest is the payment times n minus the balance. Total cost is the amount drawn plus all interest from both phases. Utilisation is the amount drawn ÷ the credit limit × 100. The extra-payment figures come from a month-by-month loop: interest at APR ÷ 12 is added, then the higher payment is applied, until the balance clears.
The draw period is the opening phase — often 10 years — when you can borrow from the line and usually only have to pay the interest on what you have drawn. Because none of the payment touches the balance, you end the draw period owing exactly what you drew, which is why the repayment payment that follows is so much higher.
During the draw you service the debt; during repayment you also repay it. On $50,000 at 8.5%, interest-only is $354.17 a month, but amortising the same balance over 15 years takes $492.37 a month — $138.20 more. Planning for that jump, rather than the draw payment, is the safe way to size a HELOC.
Almost always variable — the APR is usually the prime rate plus a margin, so it moves when the prime rate moves. This calculator holds the rate you enter fixed so you can see the structure of the loan; rerun it a point or two higher to see what a rate rise would do to both phases.
Utilisation is how much of your credit limit you have drawn: $50,000 drawn on a $100,000 line is 50%. Lenders watch it because a line drawn close to its limit leaves no buffer, and high utilisation of revolving credit can weigh on credit decisions.
Yes, because every extra dollar is pure principal. In the worked example, $100 a month extra on a $50,000 balance at 8.5% cuts 50 months off a 15-year repayment and saves $12,170.58 of interest — the earlier the extra payments start, the more interest they avoid.
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