How this number is made
During a HELOC draw period the minimum is often interest only, so the balance never falls. When the draw ends, the same balance can turn into a fully amortizing payment. This page shows both.
- Use the rate in effect now. HELOCs are usually variable.
- The amortizing years are the repayment period in the agreement, often 10 to 20.
Formula
Interest-only payment = drawn × APR ÷ 12. Amortizing payment uses that same balance over the repayment years.
Worked example
With the figures already in the form, interest-only payment is $283.33.
Questions
Is the rate fixed?
Usually no. A HELOC rate is often prime plus a margin. The payment here is only as stable as the rate you typed.
Does the payment include the principal during the draw?
The interest-only line does not. Anything extra is optional and is what actually reduces the balance.