What's the monthly payment on a $100,000 HELOC?

A home equity line of credit, or HELOC, is a great option for homeowners looking to make home renovations, pay for education expenses, consolidate debt, make a major purchase and more. HELOCs are attractive to many because they’re flexible and can be more affordable than a home equity loan because you only borrow what you need, when you need it, instead of getting a lump sum up front.

That leads to the question. How much would a monthly payment on a $100,000 HELOC be? Read on to see how much you may need to pay, why a HELOC might make sense for you, and more.

What's the monthly payment on a $100,000 HELOC?

The interest-only monthly payment on a fully drawn $100,000 home equity line of credit (HELOC) typically ranges from $583.33 to $666.77. This calculation is based on current interest rates that span from 7.00% to 8.00% APR. Getting the most favorable rate depends on several key factors including the total credit line amount, your credit rating, loan-to-value percentage and lien position of the HELOC.

Since HELOC rates are variable, your monthly payment amounts will fluctuate throughout the preliminary 10-year draw period as they adjust with changes to the prime rate. After the draw period concludes, the HELOC enters the repayment phase where your monthly obligations will include both repayment of principal drawn and interest on the outstanding principal balance.

Why choosing a HELOC makes sense

Home equity lines of credit provide homeowners with the opportunity to access the equity in their home, enabling them to borrow at competitive rates for diverse financial needs. A HELOC delivers unmatched flexibility when it comes to fund access. You have the freedom to withdraw small amounts as needed, make substantial draws, or customize your borrowing pattern to match your specific requirements, provided you stay within your approved credit limit. Additionally, the interest-only payment structure available during the draw period can result in significantly lower monthly obligations when compared to high-rate credit cards or short-term personal loans.

Understanding HELOC basics

A HELOC functions a lot like a credit card, where you receive approval for a predetermined credit amount based on your home's equity value. Unlike a traditional home equity loan where you receive the entire sum upfront, a HELOC allows you to access funds as needed. So if you qualify for a $100,000 HELOC but only need $25,000, you’re able to limit your draw to that amount and you’ll only pay interest on that $25,000 during the 10-year draw period. Most lenders provide convenient access to HELOC funds through digital banking platforms or smartphone applications.

HELOC terms are structured around two separate periods:

The draw period

Throughout the borrowing, or draw period of your HELOC, you have access to withdraw funds from your approved credit line. This phase generally lasts for 10 years. You maintain complete control over withdrawal amounts, whether you’re making small, periodic draws or larger lump-sum withdrawals.

During this period, your monthly payment obligation covers only the interest on funds you've actually borrowed, not on your entire available credit line. However, you always have the option to make additional payments toward the principal balance to reduce your debt more rapidly.

The repayment period

Once the draw period expires, the repayment period starts. The duration of the repayment period varies among lenders, but it's typically around 15 years. During the repayment phase, your monthly payments need to cover both the interest charges and the principal.

The majority of HELOC products feature variable interest rates that move with the prime rate. This means your interest costs may increase or decrease in response to the broader market interest rate movements during both the draw and repayment periods.

How can I determine the HELOC amount I could qualify for?

Use this HELOC calculator to determine the home equity line of credit amount you may qualify for.

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