HELOC payoff calculator

Paying off a HELOC

A home equity line of credit (HELOC) is convenient but can linger for years, because many have a variable rate and an interest-only draw period during which the balance never shrinks. To actually pay it down you must pay more than the monthly interest. This calculator shows how long a fixed monthly payment takes and the total interest you will pay.

Worked example

A $50,000 HELOC balance at 8%, paying $800 a month:

• Time to pay off: about 82 months (roughly 6.8 years)
• Total interest paid: about $14,895

If you only paid the monthly interest (about $333 at the start), the balance would never go down. The calculator flags when a payment is below that threshold.

Why HELOCs deserve priority

• Higher, variable rates. HELOC rates are usually well above mortgage rates and can rise, making the debt more expensive over time.
• Guaranteed return. Paying it off earns you the HELOC rate, risk-free - often a better deal than uncertain market returns.
• Restores your borrowing power and reduces what is secured against your home.

How to pay it down faster

• Pay well above the interest-only minimum - every extra dollar goes to principal.
• Target it before lower-rate debts in a debt-payoff plan, since the rate is usually highest.
• Consider a fixed-rate refinance of the balance if rates are rising and you want payment certainty.

Common mistakes

• Paying only the interest during the draw period and making no progress.
• Treating a variable-rate HELOC as if the payment will never change.
• Ignoring it while investing, when its rate likely beats market returns.

To fold the HELOC into a broader payoff plan, see the debt avalanche calculator; to lower a mortgage payment with a lump sum instead, see the mortgage recast calculator.