How to Calculate HELOC Payments: Six Steps for 2026

Why a HELOC has two payments, not one

A home equity line of credit is not a loan with one monthly payment. It has two phases. During the draw period — usually 10 years — you pay interest only, and the balance does not fall. During the repayment period — usually 20 years — you can no longer draw, and the balance is amortized like an ordinary loan. That is why the same $50,000 costs $354.17 a month in one phase and $433.91 a month in the other. This guide works through both phases on one example: a $50,000 draw at 8.5% APR, a 10-year draw period and a 20-year repayment period. Every figure here is checked against the HELOC calculator.

Step 1: Find the balance drawn

The balance is the amount you have actually drawn on the line, not the credit limit. A $100,000 line with $50,000 drawn costs interest on $50,000, not $100,000. Our example balance is $50,000. If you draw more later, the payments rise in proportion — doubling the balance to $100,000 doubles the draw payment to $708.33 a month and the total interest to $193,276.80, while halving it to $25,000 halves the draw payment to $177.08 a month. Write the balance down first, because every later step multiplies it.

Step 2: Work out the monthly rate

The APR is an annual rate, but the payments are monthly, so divide it by 12. At 8.5% APR the monthly rate is 8.5% ÷ 12 = 0.708333% a month. This is the single most common mistake in HELOC maths: using 8.5% as the monthly rate would give a draw payment of $4,250.00 a month instead of $354.17. Keep the monthly rate written down — steps 3 and 5 both use it. Most HELOCs are variable-rate, so 8.5% is the rate you are testing today, not a promise: if the prime rate rises, both payments move.

Step 3: Calculate the draw payment (interest only)

During the draw period you pay interest only, so the draw payment is the balance times the monthly rate: $50,000.00 × 0.708333% = $354.17 a month. That is the whole draw payment — there is no principal in it, so after 10 years of paying $354.17 a month you still owe the full $50,000. Two checks: the draw payment is proportional to the balance ($25,000 costs $177.08 a month, $100,000 costs $708.33) and to the APR (7% costs $291.67, 10.5% costs $437.50). If you want the draw payment to be exactly $500 a month on a $50,000 draw, the APR has to be 12.00% — $50,000.00 × 12% ÷ 12 = $500.00 exactly, and at 11.99% the payment is $499.58. And if you want the draw payment to be $300 a month at 8.5%, the smallest balance that does it is $42,352.95 — the exact balance is $42,352.9412, and one cent less gives an unrounded payment of $299.99999, just below $300.

Step 4: Work out the draw-period interest

The draw interest is the balance times the APR times the draw years: $50,000.00 × 8.5% × 10 years = $42,500.00. That is $354.17 a month for 120 months, and it buys nothing — the balance is exactly where it started. A shorter draw period cuts this figure directly: a 5-year draw period halves it to $21,250.00, and the total interest falls from $96,638.40 to $75,388.40. A useful milestone: the draw interest reaches $25,000 after 71 months — at 71 months it is $25,145.83, and at 70 months it is $24,791.67. So in the first six years of the draw period you will have paid $25,000 of interest and still owe the whole $50,000.

Step 5: Calculate the repayment payment (amortization)

When the draw period ends, the balance is amortized over the repayment period: $50,000 over 240 months at 0.708333% a month is $433.91 a month — higher than the draw payment, because it also pays the principal down. Over 20 years the repayment total is $433.91 × 240 = $104,138.40, of which $54,138.40 is interest. The repayment period is the second big lever after the APR: repaying over 10 years instead of 20 raises the payment to $619.93 a month but cuts the repayment interest to $24,391.60 and the total interest to $66,891.60 — a saving of $29,746.80 for $186.02 more a month. If you want the repayment payment to stay at or below $500 a month, the repayment period has to be at least 175 months (14.58 years): at 175 months the payment is $499.37, and at 174 months it is $500.82.

Step 6: Add up the total interest and the total paid

Add the two phases together. The total interest is the draw interest plus the repayment interest: $42,500.00 + $54,138.40 = $96,638.40. The total paid is the draw interest plus the repayment total: $42,500.00 + $104,138.40 = $146,638.40. That is the full cost of borrowing $50,000 on these terms: you pay back almost three times what you drew. All figures are rounded to cents half-up, and totals are computed from the rounded payment figures, so rounded parts can differ by a cent from their rounded sum.

Three mistakes to avoid

First, budgeting on the draw payment alone. The $354.17 a month feels manageable; the $433.91 repayment payment arrives 10 years later, when the balance is still the full $50,000. Work out both before you draw. Second, treating the APR as fixed. Most HELOCs are variable-rate, so the 8.5% you test today can move — try 10.5% as well ($437.50 a month to draw, $499.19 a month to repay, $122,305.60 of total interest) and make sure you can afford that too. Third, forgetting that the draw period interest buys nothing. Ten years at $354.17 a month is $42,500.00 paid and $50,000 still owed. If you can pay more than the interest during the draw period, the balance entering repayment falls, and every later figure falls with it.

What to do next

Run your own numbers through the HELOC calculator and compare the two payments and the total interest before you draw. If the repayment payment worries you, test a shorter repayment period or a smaller balance first. For the wider choice, see the HELOC vs home equity loan comparison, the cash-out refinance vs HELOC comparison, the home equity loan calculator and the mortgage calculator.