Interest-Only HELOC Calculator
See your interest-only draw payment — and exactly what it becomes when the interest-only period ends.
During a HELOC's interest-only draw period, your payment is just the interest on the balance — about $333/mo on $50,000 at 8%, with nothing going to principal. That low payment is temporary: when the interest-only period ends, the balance amortizes and the payment jumps to about $418/mo (+25.5%). This calculator shows the interest-only payment now and the payment that replaces it, so the end of the draw isn't a surprise.
These results are estimates for informational purposes only and are not financial, tax, or legal advice. Your actual figures from a lender or the IRS may differ. Consult a qualified professional before making decisions.
Payment shock when the draw ends
$333.33/mo → $418.22/mo
Your payment jumps $84.89 (+25.47%) when interest-only ends and the balance begins to amortize.
Month-by-month schedule
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About the Interest-Only HELOC Calculator
Interest-only is the feature that makes a HELOC's early payments so low — and the reason the later ones climb. During the interest-only period, your payment equals the interest that accrued that month and nothing more: balance times the monthly rate, posted and rounded to the cent. On $50,000 at 8% that is about $333, and it stays there for the entire draw because the principal never moves. The catch is built into the design: paying only interest means you owe exactly as much at the end of the interest-only period as you did at the start, and now that balance has to be repaid over a shorter remaining term. That is why the payment jumps — to roughly $418 a month here, about 25% higher. This calculator puts the two numbers side by side so you can decide whether the low payment is worth the later step-up, or whether you would rather pay some principal now to soften it. As always with a HELOC, the rate is variable: the figure you enter is an assumption to stress-test, and a higher rate lifts both the interest-only payment and the shock that follows.
Frequently asked questions
What does interest-only mean on a HELOC?+
It means your required payment during the draw period covers only the interest that accrued that month — balance times the monthly rate. None of it reduces the principal, so the payment is low and flat, and the amount you owe stays the same until the interest-only period ends (or you pay extra).
What happens when the interest-only period ends?+
The line enters repayment: you can no longer draw, and the full balance is amortized over the repayment term as principal-plus-interest. Because you are now paying down principal, the payment rises — commonly 20–35%. This tool shows the exact after payment so you can plan for it.
Should I pay only the interest-only minimum?+
Paying the minimum keeps your monthly cost low but leaves the whole balance for the repayment phase, maximizing total interest and the size of the payment shock. Even modest extra principal during the draw shrinks the balance you have to amortize later — the HELOC payoff calculator shows how much that changes things.
Is the interest-only payment the same every month?+
During the draw, yes — as long as the balance and rate hold, the interest-only payment is flat because it is always the same balance times the same monthly rate. It changes only if you draw more, pay down principal, or the variable rate moves.
By D.J. Gelner
D.J. Gelner is a former attorney and product builder who writes and verifies the math behind ManyTools' calculators. This HELOC model uses real lender-ledger conventions — interest posted and rounded to the cent every month, exactly as a line of credit accrues — and every result is checked against hand-verified test cases. It is an educational estimate, not financial advice; confirm the numbers with your lender.
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