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HELOC Payment Formulas:
Draw Period (Interest-only):
\[ PMT = P \times r \]Repayment Period:
\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]
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The HELOC (Home Equity Line of Credit) Payment Calculator helps estimate monthly payments for both the draw period (interest-only) and repayment period (principal + interest) of a HELOC loan.
The calculator uses different formulas for each phase:
Draw Period (Interest-only):
\[ PMT = P \times r \]Repayment Period:
\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]Where:
Explanation: During draw period (typically 7-10 years), you pay only interest. During repayment (typically 10-20 years), you pay both principal and interest.
Details: HELOCs have variable rates, so payments can change over time. This calculator provides estimates based on current rates.
Tips: Enter principal amount, annual interest rate, select loan phase (draw or repayment), and for repayment period, enter the term length.
Q1: What's typical HELOC draw period length?
A: Most HELOCs have 7-10 year draw periods where you can borrow funds and make interest-only payments.
Q2: How does repayment period differ?
A: During repayment (typically 10-20 years), you can no longer borrow and must pay both principal and interest.
Q3: Are HELOC rates fixed or variable?
A: Most HELOCs have variable rates tied to prime rate, so payments may change over time.
Q4: What's the difference between HELOC and home equity loan?
A: HELOCs are revolving credit lines with variable rates, while home equity loans are lump sums with fixed rates.
Q5: Are there prepayment penalties?
A: Most HELOCs don't have prepayment penalties, but check your specific terms.