Home Equity Line of Credit (HELOC) Calculator
Estimate the monthly payment needed to pay off your HELOC in a set number of months. Enter your balance, interest rate, payoff goal, new monthly charges, and annual fee to see the required payment.
HELOC Monthly Payment Calculator
HELOC Payment Formula
Where:
- \(P\) — new monthly payment ($)
- \(B\) — current outstanding HELOC balance ($)
- \(r\) — monthly interest rate (annual rate divided by 12)
- \(n\) — payoff goal in months
- \(C\) — new charges added to the line each month ($)
- \(F\) — annual fee charged on the HELOC ($)
The first term is the standard amortizing loan payment: it is the level payment that fully repays the balance \(B\) over \(n\) months at monthly rate \(r\). The new charges and one-twelfth of the annual fee are added on top, since they must also be covered each month.
HELOC – Calculation Example
Example: you owe $20,000 on your HELOC at a 6% annual interest rate and want to pay it off in 60 months. You make no new charges and the line has no annual fee.
\[ r = \frac{6\%}{12} = 0.005 \]
\[ P = \frac{20{,}000 \times 0.005}{1 - (1 + 0.005)^{-60}} = \frac{100}{1 - 0.74137} = \frac{100}{0.25863} \]
\[ P \approx 386.66 \]
Result: you need to pay about $386.66 per month to clear the balance in 60 months. Over that period you will pay roughly $23,200 in total, of which about $3,200 is interest.
How to Use the HELOC Calculator
- Enter your Current Balance — the amount you currently owe on the line of credit.
- Enter your Current Monthly Payment — this is shown for comparison against the calculated payment (the new payment is computed from your balance, rate, and payoff goal, not from what you currently pay).
- Enter the Interest Rate — the annual rate on your HELOC, as a percentage.
- Enter your Payoff Goal (in months) — the target number of months in which you want the balance repaid.
- Enter New Charges per Month — any amount you plan to keep drawing from the line each month. Leave at 0 if the line is frozen during repayment.
- Enter the Annual Fee — the yearly maintenance fee your lender charges, if any. The calculator spreads it evenly across the 12 monthly payments.
- Read the results: Payoff Credit Line in Months confirms your target, and New Monthly Payment shows the payment required to hit it.
What a HELOC Is and How Repayment Works
A Home Equity Line of Credit is a revolving credit line secured by your home's equity — the difference between your home's market value and what you owe on your mortgage. Like a credit card, you can borrow against it, repay, and borrow again during the draw period, which typically lasts 5–10 years. After that, the repayment period begins and you can no longer draw funds.
Most HELOCs have variable interest rates tied to a benchmark such as the prime rate, which means your rate — and therefore your required payment — can rise or fall over time. This calculator assumes a fixed rate for the entire payoff period, which is the simplest way to plan, but keep in mind that actual payments on a variable-rate line may differ if rates change.
During the draw period many lenders require only interest-only payments. That keeps monthly costs low, but the balance does not shrink. When the repayment period starts, the balance is amortized over the remaining term and payments can jump sharply — often by hundreds of dollars. This calculator helps you see what a full amortizing payment looks like so you can budget for that transition, or pay down the balance aggressively before it arrives.
If the calculated New Monthly Payment is much higher than your current payment, your current payment is probably only covering interest (or less). If it is close to or below your current payment, you are already on track to pay off the line within your goal, and the difference between the two numbers tells you how much cushion you have.
Assumptions, Limitations and Practical Tips
- Fixed rate assumed. Real HELOC rates are usually variable. If your rate rises, your payoff will take longer at the same payment — or require a higher payment to stay on schedule.
- New charges extend the payoff. The calculator adds new monthly draws to the payment so the target payoff date is preserved. In reality, if you only pay the calculated amount while still drawing on the line, the balance and payment needs grow over time.
- Interest-only minimums are not modeled. The result is a fully amortizing payment. If you currently pay only interest, expect the calculated figure to be noticeably higher than your present payment.
- Annual fee is spread evenly. Some lenders bill the fee as a single charge in a specific month; the calculator averages it to \( \text{Annual Fee} / 12 \) per month for budgeting purposes.
- Fees, prepayment penalties, and closing costs are not included. Check your loan agreement, and if you are considering paying off a HELOC early, review whether any prepayment penalty applies.
- Tip: experiment with a shorter payoff goal. Because HELOC interest compounds monthly, paying the line off sooner can save a surprising amount — compare the total interest at 36 vs. 60 months by running the calculator twice.
To see how a HELOC payoff compares with other debt or financing options, try our Loan Calculator, the Mortgage Payment Calculator, or the general Mortgage Calculator. If you are weighing a HELOC against releasing home equity another way, the Reverse Mortgage Loan Calculator is also worth a look.
Frequently Asked Questions
How do I calculate a HELOC payment by hand?
Divide your annual interest rate by 12 to get the monthly rate \(r\). Then compute \( \frac{B \times r}{1 - (1 + r)^{-n}} \), where \(B\) is your balance and \(n\) is the number of months in your payoff goal. Add any new monthly charges and one-twelfth of your annual fee. For example, a $20,000 balance at 6% over 60 months gives a payment of about $386.66 before fees.
What is a good payoff timeline for a HELOC?
There is no single right answer, but many borrowers target 3–10 years. Shorter timelines save the most interest because HELOC interest compounds monthly, while longer ones keep payments manageable. A practical approach is to choose the shortest term whose monthly payment fits comfortably in your budget — run the calculator twice, say at 36 and 60 months, and compare total interest to see the trade-off.
Why is my calculated payment so much higher than what I pay now?
Most likely you are currently making interest-only payments, which are common during the draw period. Interest-only payments cover the cost of borrowing but never reduce the balance. The calculator shows a fully amortizing payment — one that retires the balance entirely by your goal date. The gap between the two numbers is a preview of the payment shock many borrowers face when the repayment period begins.
Does the calculator handle a 0% or very low interest rate?
Yes. At 0% interest the formula simplifies: the payment is just the balance divided by the number of months, plus new charges and the monthly share of the annual fee. While true 0% HELOCs are rare, some lenders offer introductory or promotional rates, and the math still works correctly for them.
What happens if I keep drawing on the line while paying it down?
Each dollar you draw adds to the balance and slows your payoff. The calculator adds your planned new monthly charges directly to the payment so the target payoff date is preserved, but in reality the required payment grows every month you keep borrowing. If your goal is to eliminate the debt, the most effective move is to freeze new charges and treat the line as a plain amortizing loan.
How does a variable interest rate affect my actual payoff?
Most HELOC rates float with a benchmark like the prime rate, so this calculator's fixed-rate assumption is a planning simplification. If your rate rises by 1 percentage point, your required payment on a typical balance increases noticeably and the payoff stretches out at the same payment. It is wise to redo the calculation with a rate 1–2 points higher to build a cushion into your budget.
Is paying off a HELOC early ever a bad idea?
It can be, in a few situations. Some loans carry prepayment penalties or early-closure fees — check your agreement first. Also compare your HELOC rate with other debts: if a credit card charges more, pay that first. Finally, keep an emergency fund rather than draining every dollar into the line, since a paid-down HELOC can usually be redrawn, which is a flexibility other loans lack. Consider consulting a financial advisor for your specific situation.