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HELOC payment

What is the interest-only cost of a drawn HELOC versus a fully amortizing payment?

Your numbers

Amortizing monthly payment

$694

Interest-only monthly payment$567
Monthly principal if amortizing$128
Total interest if fully amortized$86,622

Tip. Educational estimate with the assumptions listed on this page. Not tax, legal, or investment advice.

Assumptions

  • Rate is fixed for the comparison. Real HELOCs often adjust.
  • Draw period vs repayment period is not staged.
  • Tax deductibility is not assumed.

Explore the numbers

Examples

Load a scenario, then change one input at a time.

Example 1

Furnish an STR

$80k draw at 8.5%.

Amortizing monthly payment

$694

Example 2

Rate shock

Same draw at 11%.

Amortizing monthly payment

$826

Example 3

Smaller bridge

$25k over 10 years.

Amortizing monthly payment

$310

What this calculates

Compare interest-only and amortizing payments on a drawn home-equity line, plus total interest if you amortize the draw.

How to use it

  1. Use the amount you would actually draw, not the full limit.
  2. Stress a higher rate. HELOC risk is the reset.
  3. If this is a down-payment bridge, pair it with a written payoff date.

Common mistakes

  • Comparing interest-only to a mortgage without noticing principal is not being paid.
  • Ignoring closing costs on a cash-out refinance alternative.
  • Using teaser rate as the life rate.

Formula

Interest-only = draw × rate ÷ 12. Amortizing = standard mortgage payment on the draw.

FAQ

Is HELOC interest deductible?

Only in some cases, usually when the funds buy or improve the secured home. Ask a CPA; this page is cash flow.

HELOC vs cash-out refinance?

Refi resets the first mortgage. A HELOC stacks a second lien. Payment shape is not the only risk.

What about a Solo 401(k) loan instead?

Different collateral and opportunity cost. See the related comparison page.

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