The repayment phase, explained
When the draw ends, the payment jumps.
- Once the draw period ends, you can't borrow more from the line.
- You start paying principal plus interest, so the monthly payment usually rises.
- The work is to see the step-up coming and pay the balance down during the draw years.
- Avoid rolling the balance into new debt to dodge the higher payment.
- The catch: plan for the higher payment before it arrives, not after.
- Draw period used
- Balance paid down during draw
- Prepare for the payment jump
- Pay it off on schedule
- Own your equity again
You're at the step-up. The moves before it decide how hard it lands.
The step-up is the moment
A HELOC runs in two phases. During the draw period, often 10 years, you can borrow against the line and pay interest only. That keeps the monthly payment low. Then the draw ends, and the loan flips to repayment.
In repayment you can't borrow more. You now pay down the principal, the amount you borrowed, along with the interest. That balance gets spread over a set term, often 20 years. So the payment can rise sharply.
Here is the shape of it. Say you owe $50,000 at the end of the draw. Interest-only at 8% runs about $333 a month. Once principal kicks in over 20 years, the payment jumps to roughly $418. The rate didn't change. The math did. Run your own numbers with the APR calculator.
Pay down during the draw years
The step-up is set by the balance you carry into repayment. The lower that balance, the smaller the shock. So the time to act is while you're still in the draw period.
Paying more than the interest-only minimum shrinks the principal early. Every extra dollar you put in now is a dollar you don't spread over the repayment term. That work quietly lowers the payment you'll face later.
If you're weighing how much the line costs you over its full life, the cost breakdown walks through the interest, fees, and rate risk in one place.
Refinance carefully
When the payment jumps, one option is to refinance the balance into a new line or a home equity loan. That can lower the monthly payment. But it usually does so by stretching the debt over more years.
A lower monthly can hide a higher total. Refinancing $50,000 into a fresh 30-year term drops the payment but adds years of interest, so you may pay far more overall. Compare the total cost of both paths, not the monthly, before you sign.
Refinancing to dodge the step-up can just restart the clock.
A new term lowers the payment but can extend the debt for years and raise the total you pay. Do it only if it genuinely lowers that total, not only the monthly.