HELOC Calculator · Practical guide
HELOC Interest Only Payment
The draw-period payment is simple multiplication: balance times rate, divided by 12. Here's what that looks like in dollars.
At a glance
The short answer
The interest-only payment on a HELOC is balance × annual rate ÷ 12. On a $100,000 balance at 8%, that is $100,000 × 0.08 ÷ 12 = $666.67 per month. Because none of the payment touches principal, the balance stays flat no matter how long you pay this amount, and the payment itself never changes unless the rate moves.
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HELOC Calculator
Enter your own values, then compare the result with the examples below.
Interest-only payments by balance and rate
| Balance | At 6.5% | At 8.0% | At 9.5% |
|---|---|---|---|
| $25,000 | $135.42 | $166.67 | $197.92 |
| $50,000 | $270.83 | $333.33 | $395.83 |
| $100,000 | $541.67 | $666.67 | $791.67 |
Why interest-only is a feature, not a plan
During the draw period — usually 5 to 10 years — most lenders only require the interest-only amount, which keeps payments low while you are actively using the line for renovations or other projects. The catch is that a decade of $666.67 payments on a $100,000 balance at 8% totals about $80,000 in interest, and you still owe every dollar of principal when repayment begins. The P&I payment that follows on a 20-year repayment term would be about $836.43.
How variable rates change the math
Most HELOCs price at prime plus a margin, so your interest-only payment floats. On a $100,000 balance, every 0.25% rate increase adds about $20.83 to the monthly payment. If prime rises a full point, the $666.67 payment becomes $750. Use the calculator above to stress-test your budget at rates 1-2 points higher than today's.
Frequently Asked Questions
How do I calculate an interest-only HELOC payment by hand?
Multiply your outstanding balance by the annual interest rate, then divide by 12. For $75,000 at 8.5%: 75,000 × 0.085 = 6,375, divided by 12 equals $531.25 per month.
Does an interest-only payment reduce my balance?
No. Interest-only payments cover just the interest charge, so the principal balance stays exactly the same. You must pay more than the interest amount to reduce what you owe.
Can I pay principal during the HELOC draw period?
Yes, most lenders allow it, and paying down principal during the draw reduces both your future interest charges and the payment shock when the repayment period begins.
What happens if I pay less than the interest-only amount?
Unpaid interest is typically added to the balance, so the loan grows instead of shrinking. On $50,000 at 7% with no payments, the balance compounds to about $100,483 after 10 years.