HELOC payment calculator Excel spreadsheet: Calculate your payments

Knowledge is power, and that’s especially true when it comes to big financial decisions. If you need to borrow money, it’s crucial to figure out exactly how much it’ll cost you so that you can choose the best option. In particular, it’s important to know how much you’ll pay for the financing (in terms of total interest and fees), but also how much your monthly payment will be. 

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Home equity lines of credit (HELOCs) are one of the most popular home equity financing tools, and for these debts, it’s especially important to determine your monthly payment amount before you apply. HELOC payments can vary a lot more over time than most other debts, after all. We’ll review how HELOCs work, and how you can use this HELOC payment calculator Excel sheet to see your potential monthly payments. 

How a HELOC works

A HELOC is a flexible lending tool that lets you borrow as little or as much as you need against your home’s value, subject to your lender’s limits. This makes HELOCs a great option if you need to borrow money but want to avoid the lengthy process of applying for a new loan each time. The downside, however, is that HELOCs are a bit more complicated. Let’s review how they work, and how your payment might vary over time.

Draw period

A HELOC starts with a five to 10-year draw period, during which time you can borrow money as needed up to your credit limit. Lenders may have different rules that require you to take draws at certain times, such as when you first open the HELOC, and some charge fees each time you take a draw. 

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You’ll only be required to make interest-only payments during this time; a big advantage, since this means much smaller payments. You can pay more, however, to free up your credit limit for future borrowing and to save money on interest. 

Repayment period

After the draw period ends, your HELOC enters a 10 to 20-year repayment phase where it transitions into a de-facto loan. You won’t be able to borrow against your HELOC anymore once you enter the repayment period. 

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Your lender will calculate your new monthly payments at this time to cover both principal and interest, which can cause a sharp rise in your monthly payment if you’ve only been making interest-only minimum payments. It’s important to prepare for this jump in advance so that you’re not taken by surprise. Keep in mind that your minimum monthly payments may still change as interest rates rise and fall over time.

Factors that impact HELOC repayment

The transition from the draw to repayment periods can understandably cause a big change in your payments. There are also many other factors that can impact your payment, and it’s important to be aware of these too:

• Rate type: Most HELOCs have variable rates that change over time. Some lenders offer a hybrid HELOC, however, where your rate may be fixed during certain periods, such as when you enter the repayment phase. 
• Rate caps: HELOCs come with two interest rate limits: periodic rate caps dictate how much your rate can change with each adjustment, and lifetime rate caps set limits on the minimum and maximum rates you’ll ever pay with that HELOC. 
• Rate margin: Lenders typically calculate your rate by adding a set margin (usually around 0.25%, but could be more or less depending on your qualifications) to the prime rate, which changes over time. For example, you’d pay 8.75% if prime rates are 8.50%.
• Term lengths: You’ll pay more interest overall with longer-term HELOCs, although each individual monthly payment will be smaller during the repayment phase. That’s because each payment will be spread out more over time, but you’ll be paying interest for longer. 
• Market conditions: The prime rate rises and falls over time depending on policy changes from the Federal Reserve, in response to broader economic conditions like inflation. Your HELOC rate is based on the prime rate, so as it changes, so will your rate.
• Outstanding balance: If you’re not currently borrowing against your HELOC, you won’t have any monthly payments to make. The more you borrow, the higher your monthly payment will be — but you can lower it again by paying it down early. 

HELOC requirements

Lenders take many factors into account when deciding whether to approve you for a HELOC. They’ll also weigh these factors to decide how much credit they’ll extend to you, and how much it will cost — which, in turn, affects your monthly payments. Let’s review these factors, keeping in mind that the further away you are from ideal lending characteristics, the more you may have to pay: 

• Credit score: You’ll typically need a credit score of at least 620, and the higher, the better. Most HELOC borrowers have a score of 760 or higher.
• Credit history: Lenders also look through your credit reports to see your past borrowing history, particularly looking for negative marks like bankruptcies and late payments. 
• Income stability: It’ll be easier to get approved if you have a stable job with a regular income, as opposed to a spotty income over time. 
• Loan-to-value ratio (LTV): Lenders may allow you to borrow up to 80% or more of your home’s value, minus your mortgage and prospective HELOC limit. This is related to your home equity; i.e., how much of your home you “own,” free of any debt liens. 
• Debt-to-income ratio (DTI): In addition to your income stability, lenders often check that your monthly debt payments (such as from student loans, a mortgage, or a credit card) take up no more than 43% of your monthly income, although DTI requirements will vary based on the lender. 

How the HELOC payment calculator Excel spreadsheet works

First, download the home equity line of credit payment calculator Excel file. You can also choose a Google sheet version if you prefer. This is what you’ll use to enter various scenarios to get an idea of how much you’ll have to pay. 

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Your HELOC may come with different term lengths for the draw and repayment phases. We’ve simplified things for this HELOC payment calculator Excel file to use a 10-year draw phase, followed by a 10-year repayment phase. Your numbers may differ if you have a shorter or longer period, however. 

Inputs and outputs for the HELOC payment calculator Excel spreadsheet

Here are the different factors you can adjust:

• Interest rate: Enter your interest rate. Note that this may be different than your HELOC’s annual percentage rate (APR), which also includes fees. The calculator assumes this rate doesn’t change over time. 
• Draw amount: Enter how much you plan to borrow. The calculator also assumes that this is your outstanding balance as you enter the repayment phase

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In turn, here is the information you’ll get:

• Monthly payment during the draw phase: Your minimum interest-only payment during the draw phase. Pay more to replenish your line of credit and save money on interest. 
• Monthly payment during the repayment phase: Your minimum payment covers interest and principal once the draw phase ends. 

How to use the HELOC payment calculator Excel spreadsheet

It can be particularly difficult to predict your HELOC payments due to so many changing factors. You can’t predict how much you’ll need to borrow, for example, or where interest rates will head in the future. Here are a few suggestions on how to use the calculator to account for these factors:

• See your maximum potential payment: Enter your maximum credit line and an interest rate of 13.25% (or your lifetime interest rate cap, if you know it). This gives you a rough estimate of your maximum potential monthly payment. 
• See the effect of paying down your balance early: Enter a smaller balance to see how much smaller your monthly payment might be during the repayment phase if you pay beyond the minimum interest-only payment in the draw phase. 
• See how a lower rate impacts your payment: Enter a smaller interest rate to see what impact it could have on your monthly payment amount if rates head south in the future, or if you work on building your credit and other qualifications before applying. 

HELOC alternatives

In order to make a sound financial decision, you’ll need to analyze more than just your potential monthly payments. It’s important to consider alternatives as well because something else might work better, depending on your needs. Here are popular alternatives that allow you to tap into your home equity:

HELOC vs. home equity loan

A home equity loan is very similar to a HELOC, except in one key aspect: they’re dispensed as one lump sum that you begin repaying immediately with fixed payments, rather than a shifting but flexible HELOC. If you’re making a specific purchase and you don’t want the added availability (or temptation, in some cases) of a line of credit, you can often save a lot of money by choosing a home equity loan instead.  

HELOC vs. cash-out refinance

Another option for lump-sum funding is a cash-out refinance, which offers you cash back in exchange for refinancing your current mortgage for a larger amount. This spreads your repayment out over a 15- or 30-year term, making for more affordable payments (although your total interest costs may be higher by the time you pay it off). A cash-out refinance can be a particularly good idea if you can qualify for a lower interest rate than you’re already paying. 

HELOC vs. home equity agreement

One final option for a lump sum is a home equity agreement, also known as a home equity investment, or HEI. These operate as a partnership with an investor who offers you funds now in exchange for a cut of your home’s future value, with the idea that your home’s value will rise over time. You won’t need to make any monthly payments in the meantime; rather, you’ll repay it in 10 or 30 years, depending on the company you choose. 

Frequently asked questions

How much does a HELOC cost?

HELOC costs can be measured in many ways: APR, interest rate, individual fees, total interest and fees paid, minimum payment amount, etc. In 2023, HELOC rates tended to hover around 9% APR. Other costs vary depending on how much you borrow against your line of credit.

What is a fixed-rate HELOC?

While HELOCs typically come with variable rates, some lenders may incorporate fixed rates into some or all of the different HELOC phases. A hybrid HELOC may feature fixed rates during the repayment phase, for example, or offer a fixed rate on specific draws, even as the rates will otherwise float up and down over time.

Can you refinance a HELOC?

Yes, you can refinance a HELOC in several ways. You may be able to renew your HELOC’s draw period with the same lender or take out a new HELOC entirely at a different bank to pay off your first one. You can also use other types of debts to pay off your HELOC, such as a cash-out refinance or home equity loan. 

The bottom line

No one has a crystal ball to see into the future, which makes it hard to know how much you’ll have to set aside each month to pay your HELOC. That’s one of the biggest disadvantages of HELOCs, in fact — but that doesn’t mean you can’t make some educated estimates to help you prepare. 

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Our HELOC payment calculator Excel spreadsheet can be a valuable resource in helping you see how different factors could impact your monthly payment. In particular, it’s important to ensure you have bandwidth in your budget to make your payments in a worst-case scenario. This can happen if you’ve maxed out your credit line right before you enter the repayment phase during a high-interest-rate environment. 

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If you know you can make these payments when they come due, you’ll have the peace of mind to fully enjoy the many benefits of your HELOC. If the monthly payments you see don’t fit into your budget, consider an HEI from Point. 

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