How to use the HELOC Payment
- Enter your home value and outstanding mortgage to find available equity.
- Enter the amount drawn and the variable rate.
- Set the draw period and repayment period lengths.
- Compare the interest-only payment with the amortising payment that follows.
How the calculation works
Available credit is usually capped by a combined loan-to-value limit, commonly 80–85%: multiply home value by the limit and subtract the existing mortgage. During the draw period, payment is simply balance × monthly rate, so it moves with both your balance and the index rate. Nothing is repaid unless you choose to overpay.
At the end of the draw period the outstanding balance amortises over the repayment term. Because the balance has not fallen, the payment jump is steep — a 60,000 balance at 8.5% costs 425 a month interest-only, then about 744 amortised over ten years. HELOC rates are variable and secured against your home, so a rate rise raises the payment and default risks the property.
Draw payment = balance × (rate/12) ; repayment = P × r(1+r)^n / ((1+r)^n − 1)Source: Combined loan-to-value limits and two-phase HELOC structure per standard US home-equity lending practice.
Worked example
Home worth 430,000, mortgage 248,000, 85% CLTV limit, 60,000 drawn at 8.5%, 10-year draw then 15-year repayment.
- Max lending = 430,000 × 0.85 = 365,500.
- Available line = 365,500 − 248,000 = 117,500.
- Draw-period payment = 60,000 × 0.085/12 = 425.
- Repayment phase = 60,000 amortised over 180 months at 8.5% = 591.
425 a month while drawing, rising to 591 once principal repayment begins — with the balance untouched in between.
Frequently asked questions
How much can I borrow?+
Typically up to 80–85% of home value minus your existing mortgage, subject to income and credit checks.
Is the rate fixed?+
Usually variable, tracking a published index plus a margin, so payments change as rates move.
What happens at the end of the draw period?+
The line closes to new draws and the balance amortises, often causing a large payment increase.
Can I lose my home?+
Yes — a HELOC is secured against the property, so missed payments can lead to foreclosure.
Last reviewed August 31, 2026. We review this page whenever the underlying formula, tax year, published rate or standard changes.