HELOC Draw and Repayment Period

A HELOC is a revolving line secured by your home equity, and its life splits into two distinct stages. The draw period, commonly around 10 years, is when you can borrow, repay, and borrow again up to your limit. Many HELOCs allow interest-only payments during this stage, which keeps the monthly cost low but does nothing to reduce the principal.

When the draw period ends, the repayment period begins, often lasting 20 years. You can no longer draw on the line, and your payments now include principal as well as interest, so they can jump sharply, especially if you only made interest payments before. HELOC rates are usually variable, so the payment can also move with interest rates. Know which phase you are in and when it ends, so the payment jump at the transition does not catch you by surprise.