This monetary software assists people in estimating the prices related to a house fairness line of credit score (HELOC) the place solely the accrued curiosity is paid throughout the draw interval. This calculation gives perception into the month-to-month fee obligations earlier than principal compensation begins. For instance, a house owner with a $50,000 HELOC at a 6% rate of interest might use it to find out that the month-to-month interest-only fee can be $250.
Understanding the monetary implications of an interest-only HELOC is essential for efficient budgeting and monetary planning. It permits debtors to handle money circulate in periods after they prioritize different bills or investments. The rise in recognition of those calculations coincides with the rising use of HELOCs for varied functions, from dwelling enhancements to debt consolidation, resulting in a larger want for instruments that make clear the compensation construction.