Interest-Only Payment Calculator
Calculate exactly how much interest you'll pay each month during your HELOC's draw period.
HELOC Interest Only Calculator
During the initial phase of a HELOC (the draw period), you are typically only required to pay interest on the amount you borrow. This calculator helps you determine your monthly interest-only payments and shows how changes in your interest rate can impact your monthly costs.
Calculate Interest Payments
Your Monthly Interest-Only Payment
$354.17
Daily Interest
$11.64
Annual Interest
$4,250
What if rates change?
Since HELOC rates are variable, your interest-only payment can change. Here's how rate hikes affect your payment:
| Interest Rate | Monthly Payment | Difference |
|---|
Frequently Asked Questions
How is interest-only payment calculated?
The formula is simple: (Loan Balance × Interest Rate) ÷ 12. For example, if you
owe $50,000 at 8%, your annual interest is $4,000. Divide that by 12 months to get a monthly
payment of $333.33.
Does my balance go down with interest-only payments?
No. Interest-only payments cover only the cost of borrowing. Your principal balance (the amount you owe) remains exactly the same unless you choose to pay extra.
Can I pay more than the interest-only amount?
Yes! You can almost always pay more than the minimum interest-only payment. Any extra amount goes directly toward reducing your principal balance, which will lower your future interest payments.