Quick answer: 200,000 drawn at 7% costs 1,166.67 a month interest-only during a 10-year draw period, then 1,550.60 a month over 20 years of repayment; total interest is 312,143.49.
How it's calculated
During the draw period most HELOCs require only the interest: balance × annual rate ÷ 12. The balance does not fall unless you pay more.
When the draw period ends, the balance is repaid over the repayment period with the amortization formula M = B·r ÷ (1 − (1 + r)^−n). The jump in payment at that point is the main risk to plan for.
HELOCs are common in the US and Canada; Gulf banks more often offer a fixed equity-release loan, which you can price with the home equity loan calculator.
Worked examples
- 200,000 at 7%, 10-year draw, 20-year repayment: 1,166.67 → 1,550.60
- Interest over the draw period: 1,166.67 × 120 = 140,000.00
Frequently asked questions
Can I pay principal during the draw period?
Usually yes. Every amount you repay lowers the interest and can be drawn again until the draw period ends.
Is the rate fixed?
Most HELOC rates are variable, tied to a benchmark such as the prime rate. Try a higher rate here to see the effect of a rise.
How much can I draw?
The credit limit is based on your home's value and mortgage balance, usually up to 80% to 85% of the value in total.
Why does the payment jump after the draw period?
You start repaying the balance as well as interest, over fewer years. In the worked example, 1,166.67 a month rises to 1,550.60.
How is a HELOC different from a home equity loan?
A HELOC is a credit line you draw from as needed, often at a variable rate. A home equity loan pays one lump sum, usually at a fixed rate.
What happens if the rate goes up?
Your payments rise with it. Try a higher rate in the calculator to see whether you could still afford them.