How does a HELOC draw period work?

During the draw period (typically 5-10 years), you can borrow up to the credit limit and typically make interest-only payments. After the draw period, the repayment period begins (10-20 years) with full principal and interest.

What is the payment shock when the HELOC repayment period begins?

Significant — on a $100,000 HELOC balance at 8%, draw period payment: $667/month (IO). Repayment period (15 years): $956/month — a 43% increase. Higher balances create larger shocks.

Are HELOC rates fixed or variable?

HELOCs are almost always variable rate, tied to the prime rate. A fixed-rate HELOC option is offered by some lenders but is less common. Rate caps vary by lender.

HELOC Draw Period Payment Calculator

Calculate interest-only payments during a HELOC draw period and the full payment after draw period ends. Includes analysis of variable rate impact.

Principal ($)

Annual Rate (%)

Years

Compounding / Year

$ Finance Disclaimer: These calculators are for educational and illustrative purposes only. Results do not constitute financial advice. Consult a licensed financial advisor before making investment or borrowing decisions.

How to Use

Enter the values for the scenario you are assessing. Calculate interest-only payments during a HELOC draw period and the full payment after draw period ends. Includes analysis of variable rate impact. Use the heloc draw period result to inform your calculation.

Related Calculators

Home Equity Loan vs HELOC

Finance & Accounting

HELOC vs Personal Loan

Finance & Accounting

LTV Ratio

Finance & Accounting

HELOC Draw Period Payment Calculator

How to Use

Related Calculators

Frequently Asked Questions

How does a HELOC draw period work?

What is the payment shock when the HELOC repayment period begins?

Are HELOC rates fixed or variable?