Updated · Built and checked by the PlinzoTools team, formulas tested against published sources
Estimate your interest-only monthly HELOC payment during the draw period.
A Home Equity Line of Credit (HELOC) typically has a draw period where you can make interest-only payments, followed by a repayment period where principal is included too. This tool estimates just the interest-only payment during the draw period, as (balance × annual rate) ÷ 12 -- it does not model the later repayment-period payment, which will be higher once principal is included.
Enter your current HELOC balance and annual interest rate. Your estimated interest-only monthly payment appears instantly.
The number this calculator produces is the interest that accrues on your current balance each month at the rate you enter, and nothing else. It is calculated as balance times annual rate divided by 12. Since none of it goes toward principal, making only this payment leaves your balance unchanged. That is the point of an interest-only draw period, but it also means the payment says nothing about how long it would take to become debt-free.
Interest-only payment = balance x (annual rate / 100) / 12
Suppose your line of credit has a 40,000 dollar balance at an 8 percent annual rate. The monthly interest-only payment is 40,000 x 0.08 / 12, or about 266.67 dollars. If you draw another 10,000 dollars, the balance becomes 50,000 dollars and the payment rises to about 333.33 dollars. If the rate moved from 8 percent to 9 percent on the original 40,000 dollars, the payment would increase to 300 dollars. These small experiments show that both the amount you borrow and the rate matter, and that a variable rate can change your budget without you doing anything.
Most lines of credit eventually shift from a draw period, when you can borrow and often pay only interest, to a repayment period when the balance must be paid down. Because principal must then be paid over a fixed number of years, the required payment can be substantially larger than the interest-only figure shown here. Terms differ, and some lenders require a balloon payment or have other structures, so read your agreement or ask your lender for the exact schedule. Planning for the higher payment early can prevent a budget shock.
This is a snapshot for one balance and one rate. It does not model a changing balance, a repayment amortization, or fees. Your home secures the line, so falling behind on payments can put the property at risk. If you are relying on a HELOC to cover ongoing expenses or to consolidate other debt, talk with a nonprofit credit counselor or financial adviser about the long-term picture. The Home Equity Calculator on this site can help you see how much equity you currently have.
No -- most HELOCs move from an interest-only draw period into a repayment period (often 10-20 years) where principal is included, raising the monthly payment substantially. Check your HELOC's specific terms for when that transition happens.
No -- most HELOCs have a variable rate that can change over time. Use your current rate for a snapshot estimate, and recalculate if your rate changes.
Your billing cycle length, day count method, fees, or a rate change can all make the real charge differ slightly. The calculator uses a simple one twelfth of the annual interest.
No. An interest-only payment covers just the interest, so the balance stays the same unless you pay extra toward principal.
Use your balance. Interest is charged on the amount drawn, not on the total limit available to you.
No. This tool covers only the interest-only draw period. A standard loan payment calculator is a better fit for a principal-and-interest repayment estimate.
Reference: Consumer Financial Protection Bureau