A home equity line of credit (HELOC) can make it difficult to determine your payments or how long it will take to pay your loan off. Because HELOCs are adjustable-rate loans during their draw period, the rate can fluctuate, sending your payments up or down.
This calculator shows you your line of credit amortization schedule. In other words, you can calculate how many months it will take you to pay off your HELOC, even if you want to make additional payments or future draws from your line.
About HELOC Loans
A home equity line of credit, or HELOC, allows homeowners to borrow cash against the equity they’ve built in their homes by giving them a line of credit with a specific limit they can repay over time.
A HELOC is like having a credit card secured by your home equity but with a much lower interest rate than you can get with a credit card or other unsecured loan. Since home equity loans are a type of mortgage, the interest you pay is tax-deductible up to certain limits.
So, how much can you borrow? Our home equity loan calculator can help you see how big of a loan you can secure with your available home equity.
Home Equity Line of Credit (HELOC) vs. Home Equity Loan
HELOCs operate like a credit card with a predetermined credit limit, allowing borrowers to withdraw funds as needed during a draw period. On the other hand, home equity loans provide borrowers with a lump sum upfront, usually with a fixed interest rate and a fixed repayment term, commonly ranging from 5 to 30 years.
With a HELOC, borrowers only have to make interest payments at first, whereas with a home equity loan, borrowers receive the entire loan amount at once and begin repaying both the principal and interest immediately.
Phase 1is the draw period, where you can borrow against the line of credit as you wish.
HELOCs function as interest-only loans during the draw phase, which usually lasts for 5 to 10 years. In other words, you’re only required to pay the interest charges during this time and don’t have to repay any loan principal.
Phase 2 is the repayment period during which you must repay the borrowed money. The repayment phase usually lasts 10 to 20 years, and you cannot borrow additional funds during this time. Monthly payments in the repayment period include both principal and interest, and the interest rate may still be variable, leading to potential fluctuations in the payment amounts.
Many borrowers refinance into a new HELOC at the end of the draw period. Some borrowers refinance to avoid the shock of the higher monthly payments required to repay both loan principal and ongoing interest charges. Other borrowers refinance to keep their line of credit open.
Here are some strategies you can use to pay off your HELOC faster:
Increase Payment Amount: While you do not have to repay the principal during an interest-only draw phase of a HELOC, you can do so without penalty. This reduces what you have to repay when the draw period ends.
Make Extra Payments: Instead of monthly payments, you could switch to a biweekly payment schedule. Biweekly payments means making 26 half-payments each year, effectively equating to 13 monthly payments. Over time, this can significantly reduce the overall repayment period. Use our Bi-Weekly Payment Calculator to see how much you could save by switching your payment schedule.
Refinance to a Fixed-Rate Loan: If interest rates have risen or if you prefer stability in your payments, consider refinancing your HELOC into a fixed-rate home equity loan. This allows you to lock in a consistent interest rate, potentially saving money on interest over the long term.
Current Mortgage Rates
Current Home Equity Rates
Current Auto Rates
Refi.com is a property of Three Creeks Media. Neither Refi.com nor Three Creeks Media are associated with or endorsed by the U.S. Departments of Defense or Veterans Affairs. The content on Refi.com is produced by Three Creeks Media, its partners, affiliates and contractors, any opinions or statements on Refi.com should not be attributed to the Dept. of Veterans Affairs , the Dept. of Defense or any governmental entity. If you have questions about Veteran programs offered through or by the Dept. of Veterans Affairs, please visit their website at va.gov. The content offered on Refi.com is for general informational purposes only and may not be relevant to any consumer’s specific situation, this content should not be construed as legal or financial advice. If you have questions of a specific nature consider consulting a financial professional, accountant or attorney to discuss. References to third-party products, rates and offers may change without notice.
Advertising Notice: Refi.com and Three Creeks Media, its parent and affiliate companies, may receive compensation through advertising placements on Refi.com; For any rankings or lists on this site, Refi.com may receive compensation from the companies being ranked and this compensation may affect how, where and in what order products and companies appear in the rankings and lists. If a ranking or list has a company noted to be a “partner” the indicated company is a corporate affiliate of Refi.com. No tables, rankings or lists are fully comprehensive and do not include all companies or available products.
Editorial Disclosure: Editorial content on Refi.com may include opinions. Any opinions are those of the author alone, and not those of an advertiser to the site nor of Refi.com.
Information from your device can be used to personalize your ad experience.