How HELOC payments work
A HELOC (home equity line of credit) has two phases. During the draw period — usually 10 years — you can borrow as needed and typically pay interest only on the balance you've used. When the draw period ends, the HELOC enters its repayment period, and you begin paying back principal plus interest, which sharply raises the monthly payment. That jump is the number most borrowers overlook.
Because most HELOCs carry a variable rate, your payment can move if the prime rate changes. Compare a line of credit against a fixed lump sum in our HELOC vs. home equity loan guide, and see how much you could borrow with the home equity calculator.
Frequently asked questions
Why does my HELOC payment go up later?
Interest-only payments during the draw period don't reduce the balance. Once repayment begins you amortize the full balance over a shorter window, so the payment rises.
Can I pay principal during the draw period?
Yes — paying down principal early lowers your interest cost and softens the payment jump later.