Can You Afford the Monthly Payment?
Calculate your payment and see how it fits into your monthly income.
HELOC Monthly Payment Calculator - Budget Planner
Taking out a HELOC is a big financial commitment. It's not just about the interest rate—it's about whether the monthly payment fits your budget. This calculator helps you estimate your monthly payments for both the draw and repayment periods and analyzes them against your monthly income to ensure affordability.
Monthly Payment & Affordability Check
Draw Period Payment
(Interest Only)
$354
% of Income
7.1%
Repayment Period Payment
(Principal + Interest)
$492
% of Income
9.8%
Affordability Analysis
Draw Period: Affordable
Your payment is under 10% of your monthly income. This is generally considered very manageable.
Repayment Period: Affordable
Your future payment is under 15% of your monthly income. You should be able to handle this increase.
Budgeting for Your HELOC
Managing a variable monthly payment requires careful planning. Here are key strategies:
The 15% Rule
Try to keep your HELOC payment under 15% of your net monthly income to ensure you have room for other expenses and savings.
Buffer Fund
Since rates can rise, build a "rate buffer" in your budget. Can you afford the payment if rates go up by 2%?
Payment Shock Prep
Simulate the repayment period payment now. Pay the extra amount into a savings account to get used to the higher outflow.
Income Fluctuations
If your income varies (commission, freelance), base your affordability on your lowest earning months, not your average.
Frequently Asked Questions
What percentage of my income should my HELOC payment be?
Ideally, your total debt payments (mortgage + HELOC + cars + cards) should not exceed 36-43% of your gross income. For the HELOC specifically, keeping it under 10-15% of your net income is a safe benchmark for most budgets.
How do I budget for a variable rate HELOC?
Always budget for a higher rate than you currently have. If your rate is 8.5%, calculate payments at 10.5% or 11% to see if you could still afford it. This "stress test" prevents panic if the Prime Rate increases.
Does this calculator include escrow for taxes/insurance?
No, HELOC payments typically do not include escrow for property taxes or homeowners insurance. Those are usually paid through your primary mortgage or separately. This calculator shows the principal and interest portion only.
Why is the repayment period payment so much higher?
Two reasons: (1) You are now paying back the principal, not just interest, and (2) You have to pay back the entire balance over a set term (e.g., 15 years), which requires larger monthly chunks than just covering the interest cost.