Enter your loan amount, interest rate, and loan term into the calculator to determine your HELOC interest-only payment and monthly payment.

HELOC Interest-Only Payment Calculation Formula

The following formula is used to calculate the interest-only payment for a HELOC.

Interest-Only Payment = (Loan Amount * Annual Interest Rate / 100) / 12

Variables:

  • Interest-Only Payment is the monthly payment you make that covers only the interest ($)
  • Loan Amount is the total amount of the loan ($)
  • Annual Interest Rate is the percentage of interest charged on the loan per year (%)

To calculate the interest-only payment, multiply the loan amount by the annual interest rate, divide by 100 to convert the percentage to a decimal, and then divide by 12 to get the monthly payment.

What is a HELOC?

A Home Equity Line of Credit (HELOC) is a loan in which the lender agrees to lend a maximum amount within an agreed period, where the collateral is the borrower’s equity in their house. The interest rate on a HELOC is usually variable, meaning it can fluctuate based on changes in the market interest rate. Unlike a home equity loan, which provides a lump sum, a HELOC allows the borrower to draw funds as needed, up to the credit limit.

How to Calculate HELOC Interest-Only Payments?

Calculating HELOC interest-only payments involves understanding your loan amount and the annual interest rate. Here’s how you can calculate it step by step:

  1. Determine the loan amount you have borrowed or plan to borrow.
  2. Find out the annual interest rate for the HELOC.
  3. Use the formula: Interest-Only Payment = (Loan Amount * Annual Interest Rate / 100) / 12.
  4. Input the loan amount and interest rate into the formula to calculate the monthly interest-only payment.
  5. For more accurate and convenient calculations, you can use the HELOC Interest-Only Calculator provided above.