HELOC Payoff Calculator

How a HELOC works

• Draw period (typically 10 years): you can borrow up to your credit limit, and you pay interest only on the outstanding balance. The rate is usually variable (Prime + margin).
• Repayment period (typically 10–20 years): the line closes to new draws and the outstanding balance fully amortizes — monthly payments jump significantly because you are now paying both principal and interest.
• The payment shock: many borrowers are surprised by the payment increase when repayment starts. This calculator shows the exact jump so you can plan ahead or decide to pay down principal during the draw period.
• Extra payments during the draw: any dollar you put toward principal during the draw period reduces both your interest-only payment and your future repayment payment. Enter an extra amount to see the impact.
• Variable rate risk: this calculator uses a fixed rate for simplicity. If Prime rises, your actual payments will be higher than shown. Model a stress scenario using a rate 2–3% above current.

Worked example

HELOC balance: $80,000 at 8.5% (Prime 5.5% + 3%), 5 years left in draw period, 20-year repayment term. Interest-only payment now: $80,000 × (8.5% ÷ 12) = $567/mo. At repayment start: monthly payment = $693/mo (a $126/mo jump). Total interest over 25 years: ~$123,000.

Adding $500/mo of extra principal during the 5-year draw period: balance at repayment start drops to $50,000. New repayment payment: $433/mo. Total interest: ~$74,000 — saving ~$49,000 in interest and cutting the repayment payment by $260/mo. The extra payments pay for themselves many times over.

Frequently asked questions

What happens to my HELOC when the draw period ends?

The line closes to new draws and enters repayment. Your servicer re-amortizes the outstanding balance over the repayment term (usually 10–20 years). The new payment is calculated exactly like a fixed-rate mortgage payment on the remaining balance — often significantly higher than the interest-only draw payment.

Can I refinance my HELOC into a fixed loan?

Yes. You can refinance a HELOC into a home equity loan (fixed rate, fixed payment) or roll it into a new first mortgage cash-out refinance. This trades variable-rate risk for a fixed payment, usually at a slightly higher rate than a comparable first mortgage. If you are approaching the end of your draw period and cannot afford the payment jump, refinancing into a fixed product is worth evaluating.

Does the calculator assume a variable or fixed rate?

Fixed, for simplicity. Most HELOCs have variable rates tied to Prime. If you expect Prime to rise, model a stressed scenario by entering a rate 2–3% higher. A 2% Prime increase on an $80,000 balance adds about $133/mo to the interest-only payment.

Can I pay off a HELOC early?

Yes — most HELOCs have no prepayment penalty. Paying extra during the draw period is especially powerful because every dollar of principal you pay down immediately reduces your required interest-only payment and reduces your repayment-phase balance. After the draw period, the line is closed and extra payments simply reduce your remaining term, as with any amortizing loan.

Formulas last reviewed October 20, 2026. Results are estimates for educational use; not financial advice. Methodology →