Calculate HELOC payments during draw and repayment periods with variable rate modeling, interest-only phase, and balance projections.
HELOC Payment Calculator follows a home equity line of credit from an interest-only draw phase into a principal-and-interest repayment phase. Enter the outstanding balance, phase lengths, and rate assumptions to compare monthly payments and examine the projected balance as rates change. During the draw period, payments may cover interest without shrinking principal. During repayment, that principal must be paid over the remaining term. The frequent surprise is the payment reset: it can rise sharply when repayment begins even if the interest rate never changes.
A concrete input and expected output from the current implementation.
Input
Balance: $10,000; annual rate: 6%; remaining draw period: 12 months; draw payment: interest only; additional draws: $0; repayment period: 12 months; rate changes: none.
Expected output
Interest-only draw payment: $50.00 per month. Balance entering repayment: $10,000.00. Level repayment payment: approximately $860.66 per month for 12 months, with the final payment subject to cent rounding.
During the draw period, $10,000 x 0.06 / 12 = $50, so an interest-only payment leaves the principal unchanged. Repayment uses $10,000 x [0.005 / (1 - 1.005^-12)] = $860.6643, which rounds to $860.66.
During an interest-only draw phase, each scheduled payment covers the modeled interest on the outstanding HELOC balance. Interest-only does not mean interest-free: paying exactly that amount keeps principal unchanged when there are no new draws or principal payments. The balance carried into repayment therefore reflects the starting balance and any balance changes included in the scenario.
At the repayment boundary, the outstanding balance is spread over the selected repayment period. Each scheduled payment contains interest on the remaining balance plus principal that reduces it. With an unchanged rate, the amortizing payment pays off the balance by the term's end, apart from cent rounding. Modeled rate changes can alter both the required payment and projected balance path.
No. It applies the rate assumptions entered to the projected balance; it cannot know how the loan's index, margin, caps, floors, or adjustment dates will develop. Run several plausible rate paths to examine sensitivity. Actual payments remain governed by the HELOC agreement and the lender's statement calculations.
The draw-period payment may cover interest only, while the repayment payment must cover interest and return the outstanding principal within a fixed term. No, the increase does not necessarily indicate a rate increase. The switch to amortizing payments, together with the repayment term and remaining balance, can create the jump by itself.
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