{
  "slug": "heloc-draw-cost",
  "title": "HELOC Draw Period Cost Calculator",
  "heading": "HELOC Draw Period Cost Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/heloc-draw-cost",
  "summary": "See what an interest-only draw period actually costs before repayment kicks in.",
  "description": "Most HELOCs have a draw period (commonly 10 years) where you can borrow, repay, and re-borrow, often paying interest-only, followed by a repayment period (commonly 20 years) where the balance amortizes fully and payments jump substantially. This calculator estimates your interest-only payment during the draw period at a variable rate, projects what happens if you only make interest payments the entire draw period, and shows the payment shock when repayment begins — a scenario that catches a lot of HELOC borrowers off guard because the draw-period payment can be a third or less of the eventual repayment-period payment on the same balance.",
  "formula": "Interest-only payment = balance × (rate ÷ 12). Repayment-period payment = balance amortized over the repayment term at the (possibly different) repayment-period rate. Payment shock = repayment payment − interest-only payment.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=heloc-draw-cost",
  "inputs": [
    {
      "id": "balance",
      "label": "HELOC balance drawn",
      "kind": "number",
      "hint": null,
      "default": 45000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "drawRate",
      "label": "Current variable rate during draw period",
      "kind": "number",
      "hint": null,
      "default": 9.5,
      "unit": "%",
      "min": 0,
      "max": 18
    },
    {
      "id": "drawYearsLeft",
      "label": "Years left in draw period",
      "kind": "number",
      "hint": null,
      "default": 6,
      "unit": null,
      "min": 0,
      "max": 15
    },
    {
      "id": "repayRate",
      "label": "Expected rate at start of repayment",
      "kind": "number",
      "hint": null,
      "default": 9,
      "unit": "%",
      "min": 0,
      "max": 18
    },
    {
      "id": "repayYears",
      "label": "Repayment period length",
      "kind": "number",
      "hint": null,
      "default": 20,
      "unit": "years",
      "min": 5,
      "max": 30
    }
  ],
  "outputs": [
    {
      "id": "paymentShock",
      "label": "Payment increase when repayment starts",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "interestOnlyPayment",
      "label": "Current interest-only payment",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "repayPayment",
      "label": "Full amortizing payment at repayment",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "totalInterestDuringDraw",
      "label": "Total interest paid, remaining draw period",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "shockMultiple",
      "label": "Payment multiplies by",
      "format": "decimal",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "HELOC balance drawn: 45000 $",
      "Current variable rate during draw period: 9.5 %",
      "Years left in draw period: 6",
      "Expected rate at start of repayment: 9 %",
      "Repayment period length: 20 years"
    ],
    "outputs": [
      "Payment increase when repayment starts: $49",
      "Current interest-only payment: $356",
      "Full amortizing payment at repayment: $405",
      "Total interest paid, remaining draw period: $25,650",
      "Payment multiplies by: 1.1"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter heloc balance drawn ($).",
      "Enter current variable rate during draw period (%).",
      "Enter years left in draw period.",
      "Enter expected rate at start of repayment (%).",
      "Enter repayment period length (years).",
      "Read your payment increase when repayment starts on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "balance": 27000,
        "drawRate": 5.7,
        "drawYearsLeft": 4,
        "repayRate": 5.3999999999999995,
        "repayYears": 12
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "balance": 45000,
        "drawRate": 9.5,
        "drawYearsLeft": 6,
        "repayRate": 9,
        "repayYears": 20
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "balance": 72000,
        "drawRate": 15.200000000000001,
        "drawYearsLeft": 10,
        "repayRate": 14.4,
        "repayYears": 30
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "Why does the repayment-period payment jump so much?",
      "a": "During the draw period you're typically paying interest only, so none of the balance shrinks. When repayment begins, the same balance must fully amortize — principal plus interest — over the repayment term, which is usually a much bigger monthly number than interest alone, especially if the balance hasn't dropped at all during the draw years."
    },
    {
      "q": "Can I pay down principal voluntarily during the draw period?",
      "a": "Yes, and it's the single best way to avoid payment shock. Any principal you pay down during the draw period reduces both the balance subject to interest now and the balance that gets amortized into a bigger payment later — even modest extra payments meaningfully soften the transition."
    },
    {
      "q": "Is a HELOC rate fixed or variable?",
      "a": "Almost all HELOCs carry a variable rate tied to the prime rate (prime plus a margin), so your interest-only payment can rise even without drawing more money if the Fed raises rates. Some lenders offer a fixed-rate conversion option on all or part of the balance — worth asking about if rate risk worries you."
    },
    {
      "q": "What happens if I can't afford the repayment-period payment?",
      "a": "Options include refinancing the HELOC into a fixed home equity loan, doing a cash-out refinance to roll it into your first mortgage, or negotiating a modification with your lender. Address it well before the draw period ends — waiting until the payment jumps limits your options and negotiating leverage."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/cash-out-refi-breakeven",
    "https://www.revenuelab.fyi/toolbox/mortgage-recast-vs-refinance",
    "https://www.revenuelab.fyi/toolbox/mortgage-points-breakeven"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — HELOC Draw Period Cost Calculator (https://www.revenuelab.fyi/toolbox/heloc-draw-cost)"
}