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Free HELOC calculator
HELOC Interest-Only Payment Calculator
During the draw period, most HELOCs require interest-only payments on whatever you’ve actually drawn. Enter your drawn amount and APR to see that payment instantly.
Your result
Estimates only, for education — not financial advice. Most HELOC rates are variable and payments will change if your rate changes. Verify figures with your lender.
The simple formula
Interest-only payment = drawn balance × APR ÷ 12. That’s it — no amortization math. On $50,000 at 8.5%: $50,000 × 0.085 ÷ 12 = $354.17 a month.
The catch: your balance never shrinks
Interest-only payments feel affordable, but every dollar goes to the lender — the principal stays exactly where it was. After 10 years of interest-only payments on $50,000, you still owe $50,000, and then the repayment payment (about $434 a month over 20 years) begins. Borrowers who pay a little principal during the draw period face far less payment shock.
Watch out for rate changes
Because most HELOCs have variable rates, an interest-only payment moves with the prime rate. Each 1% rate rise adds about $41.67 a month per $50,000 drawn. Our HELOC rates guide explains how the index-plus-margin pricing works.
Frequently asked questions
How long is the interest-only period on a HELOC?
The interest-only phase usually matches the draw period — commonly 10 years. During this time you may make interest-only minimum payments, though paying extra principal is allowed and wise.
Can I pay principal during the draw period?
Yes. The interest-only amount is the minimum, not the maximum. Any extra you pay reduces principal directly, cutting future interest and softening the repayment-phase payment jump.
What happens to my payment if rates rise?
It rises immediately on most HELOCs. A 1% rate increase adds roughly $8.33 per month for every $10,000 drawn — about $41.67 on a $50,000 balance.
Is making interest-only payments a good idea?
It keeps payments low, which suits short-term or irregular borrowing. As a long-term strategy it’s expensive: the balance never falls, so you pay interest on the full amount for the entire draw period.
How is interest-only different from a normal loan payment?
A normal amortizing payment includes principal, so the balance shrinks each month. An interest-only payment covers just the month’s interest — the balance stays flat until you voluntarily pay principal.