What you actually pay each month on a $100,000 HELOC

A HELOC (home equity line of credit) does not have a fixed monthly payment the way a mortgage or car loan does. Instead, you pay interest on whatever balance you have drawn, and that payment changes month to month. On a $100,000 HELOC, your monthly payment depends entirely on three things: how much of that $100,000 you have actually borrowed, what interest rate your lender charges, and whether you are in the draw period (when you can borrow) or the repayment period (when you cannot).

If you have drawn the full $100,000 and your interest rate is 8%, you would pay roughly $667 per month in interest alone during the draw period. If you have only drawn $50,000, that same 8% rate costs about $333 per month. The moment rates change or you pay down the balance, your payment changes too. This is why a HELOC payment is unpredictable—it is not a number you can lock in.

Key Takeaways

  • Your monthly HELOC payment is calculated by multiplying your current balance by your interest rate and dividing by 12; a $100,000 balance at 8% costs roughly $667 per month in interest.
  • During the draw period (typically 5 to 10 years), you usually pay interest only, so your payment covers no principal and your debt does not shrink.
  • During the repayment period (typically 10 to 20 years after the draw period ends), you must pay both principal and interest, and your monthly payment rises sharply.
  • Interest rates on HELOCs are variable, meaning your payment will rise if rates rise and fall if rates fall, unlike a fixed-rate mortgage.
  • The actual payment you owe depends on your lender's terms and your current balance, not on the $100,000 credit limit itself.

How the draw period affects what you pay

Most HELOCs split into two phases. During the draw period, which usually lasts 5 to 10 years, you can borrow money whenever you want up to your credit limit. Your monthly payment during this phase is typically interest only on the amount you have borrowed. You are not required to pay down the principal—the actual borrowed amount—at all.

This is why a $100,000 HELOC can feel cheap at first. If you draw $50,000 at 7% interest, you pay about $292 per month. If you draw nothing, you pay nothing. But this also means your debt is not shrinking. When the draw period ends and the repayment period begins, the terms flip. You can no longer borrow, and now you must pay both principal and interest. That same $50,000 balance might now cost $500 to $600 per month for 10 to 20 years, depending on the repayment schedule your lender sets.

Why your payment changes when interest rates move

HELOC rates are variable, which means they are tied to a benchmark rate that moves with the market. Most HELOCs track the prime rate, which is set by the Federal Reserve. When the prime rate rises, your rate rises, and your payment rises. When it falls, your payment falls.

This creates real risk. If you borrowed $100,000 at 6% when rates were low, and rates rise to 10%, your monthly interest payment jumps from $500 to $833—a $333 increase with no warning. Some lenders offer a fixed-rate option on part or all of your HELOC balance, which locks in the rate for that portion. If you think rates might rise, asking about a fixed-rate conversion when you open the account can protect you later.

The difference between interest-only and principal-and-interest payments

During the draw period, most lenders require only interest payments. On a $100,000 balance at 8%, that is $667 per month. You could pay more if you wanted to—paying down principal early costs you nothing—but you are not required to.

Once the repayment period starts, the calculation changes. Now you owe a monthly payment that covers both interest and principal, and the payment is usually fixed for the remainder of the term. A $100,000 balance at 8% over a 15-year repayment period would cost roughly $955 per month. Over 20 years, it would be about $764 per month. The longer the repayment period, the lower the monthly payment, but the more total interest you pay over the life of the loan.

How to estimate your actual monthly payment

To calculate what you would owe on a $100,000 HELOC, you need three numbers from your lender: the current interest rate, the length of the draw period, and the length of the repayment period. During the draw period, multiply your balance by the rate and divide by 12. A $100,000 balance at 7.5% costs $625 per month in interest.

For the repayment period, the math is more complex because you are paying both principal and interest. Most lenders will give you an amortization schedule that shows the exact payment. You can also use an online HELOC calculator by entering the balance, rate, and repayment term. The key is to ask your lender for the repayment period terms before you sign—many borrowers are shocked when the draw period ends and their payment triples.

What happens if you only make minimum payments

If you make only the interest-only payment during the draw period, your $100,000 balance stays at $100,000. You are paying the cost of borrowing but not reducing what you owe. When the repayment period begins, you suddenly owe a much larger payment because now you have to pay off the entire balance in a fixed number of years.

Some borrowers refinance into a new HELOC or a home equity loan before the repayment period starts, essentially resetting the clock. Others pay down the balance during the draw period so the repayment phase is less painful. The worst outcome is reaching the repayment period with a large balance and no plan—your payment can jump so high that you cannot afford it, and you may be forced to sell the home or default.

Comparing a HELOC payment to a home equity loan

A home equity loan is different from a HELOC. With a home equity loan, you borrow a lump sum (say, $100,000) and receive it all at once. Your monthly payment is fixed from day one and includes both principal and interest. On a $100,000 home equity loan at 8% over 15 years, you would pay roughly $955 per month for the entire 15-year term—no surprises.

A HELOC is more flexible but less predictable. You borrow only what you need, pay interest only on what you use, and your payment changes if rates change. If you want certainty and a fixed payment, a home equity loan is simpler. If you want flexibility and lower payments in the short term, a HELOC works—but you need to plan for the repayment period shock.

Frequently Asked Questions

What is the monthly payment on a $100,000 HELOC at 7% interest?

During the draw period, if you have borrowed the full $100,000, you would pay roughly $583 per month in interest only. During the repayment period, the payment depends on how many years you have to repay. Over 15 years, it would be about $898 per month. Over 20 years, about $718 per month. Ask your lender for the exact repayment term before you borrow.

Do I have to pay the full $100,000 limit every month?

No. You only pay interest on the amount you have actually borrowed. If you have a $100,000 HELOC but have only drawn $30,000, you pay interest only on that $30,000. You can draw more later, and your payment will increase when you do.

What happens to my HELOC payment if interest rates go up?

Your payment will rise because HELOC rates are variable. If your rate goes from 7% to 9%, your monthly interest payment on a $100,000 balance increases by about $167. Some lenders offer the option to lock in a fixed rate on part of your balance to protect against future increases.

Can I avoid the repayment period shock?

Yes. You can pay down the principal during the draw period so the balance is smaller when repayment begins. You can also refinance into a new HELOC or a home equity loan before the repayment period starts. The worst choice is to ignore it and hope for a solution later.

Is a HELOC payment tax-deductible?

Interest on a HELOC may be tax-deductible if you used the borrowed money to improve your home or for certain other purposes. Interest is not deductible if you used the money for personal expenses like a vacation. Consult a tax professional about your specific situation.