HELOC Draw Period Payment Calculator
See exactly what your HELOC payment will be during the interest-only draw period and during the repayment phase. Calculate payment shock so it doesn't surprise you.
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How HELOC Draw Periods Work
A Home Equity Line of Credit (HELOC) has two phases: a draw period and a repayment period. During the draw period (typically 10 years), you can borrow against your credit limit and most lenders only require interest-only minimum payments. When the draw period ends, you can no longer borrow, and the loan converts to a fully amortizing repayment phase — usually 15 or 20 years — where you pay both principal and interest on the outstanding balance (source: Consumer Financial Protection Bureau, cfpb.gov).
Payment Shock — The Hidden Cost
The transition from interest-only to fully amortizing payments often causes "payment shock" — a sudden 50% to 200% increase in monthly payment. Example: $50,000 balance at 9% interest-only equals $375 per month during draw. After conversion to a 20-year amortization at 9%, the same balance requires roughly $450 per month, or $675 per month if amortized over 10 years instead. Many borrowers don't realize this jump is coming until they get the first repayment-phase statement. Federal regulations require lenders to disclose this in initial HELOC paperwork, but the language is dense.
How to Avoid HELOC Payment Shock
Three strategies protect you. First, pay extra principal during the draw period — even $100 per month over 10 years can cut your starting repayment balance by $15,000+. Second, plan to refinance the HELOC into a fixed-rate home equity loan before the draw ends if rates have dropped. Third, treat the HELOC's interest-only period as if it were a 20-year amortizing loan from day one — calculate that payment, set it as your minimum, and you'll never face shock. The CFPB recommends Strategy 3 (source: cfpb.gov consumer guide).
HELOC Variable Rate Risk in 2026
Most HELOCs are tied to the Prime Rate plus a margin (typically Prime + 0% to 2%). When the Federal Reserve raises rates, your HELOC payment rises within 1-2 billing cycles. In 2022-2023, Prime jumped from 3.25% to 8.50% — HELOC borrowers saw payments more than double. As of June 2026, Prime sits at roughly 8.00%, and HELOC rates run 8.0% to 9.75%. Build a 2-percentage-point cushion into your budget for rate increases.
What Happens at the End of the HELOC Draw Period
About 60–90 days before your draw period ends, your lender will send a written notice — required under Regulation Z of the federal Truth-in-Lending Act 12 CFR §1026.40 — confirming the conversion date, the outstanding balance, the new amortization term, and the first fully amortizing payment amount. On the conversion date, three things happen at once: (1) you can no longer draw new funds; (2) the loan freezes the principal balance at the closing-day amount; (3) monthly payments switch from interest-only to principal-and-interest based on the remaining 10-, 15-, or 20-year repayment schedule. At that point your options are: keep the new amortizing payment, refinance the HELOC into a fixed-rate home equity loan, do a cash-out refinance on the first mortgage to pay off the HELOC, or sell the home and settle the balance at closing. Run the calculator above with your real conversion date and current rate to see exactly what the new payment will be.
Last updated: June 2026. Sources: consumerfinance.gov (CFPB), 12 CFR §1026.40 (Reg Z / TILA), federalreserve.gov (Prime Rate H.15).