HELOC Draw Period Ending: Why the Payment Jumps and What You Can Do
During a HELOC's draw period you can borrow, and many plans let you pay only the interest. When the draw period ends, borrowing stops and repayment of the principal begins, either through larger monthly payments or, under some plans, one balloon payment. The CFPB says monthly payments "are often significantly higher once you enter repayment." This page shows how to estimate the jump from your own balance, then sets out the options, from paying down early to a fixed-rate lock or a refinance. The line is secured by your home; the CFPB warns that "if you fall behind or can't repay the loan on schedule, you could lose your home."
Key takeaways
- Draw periods are commonly 10 years and repayment periods 10 to 20 years. Bank of America describes a typical 10-year draw and 20-year repayment; Axos lists 10 and 10; Navy Federal lists 20 and 20.
- In our illustration (a hypothetical 8.00% variable rate held constant, excluding taxes and insurance), a $40,000 balance moves from 120 interest-only payments of $266.67 to 240 payments of $334.58 over 20 years or 120 payments of $485.31 over 10 years: a 25.5% or 82.0% jump.
- A variable rate can add to the jump. If the illustrative rate rose to 10.00% at the end of draw, the schedule would be 120 interest-only payments of $266.67 followed by 120 payments of $528.60 (taxes and insurance not included).
- Some plans require the whole balance at once. The CFPB says if you cannot pay a balloon payment, "you could lose your home."
- Start 6 to 12 months ahead: pay down principal, ask about a fixed-rate lock, compare a refinance, or ask the lender about an extension.
This page is part of our guide to home equity loans, HELOCs and refinancing.
What happens when a HELOC draw period ends?
Three things change on the end-of-draw date:
- You can no longer borrow. The CFPB: "After the draw period ends, you stop being able to borrow from your HELOC and enter the 'repayment period.'"
- Principal comes due. "Your lender may set a schedule so that you repay the full balance, often over ten or 20 years" (CFPB).
- Some plans end with a balloon. "In some cases, you may have to pay back the whole amount you borrowed as soon as the repayment period begins" (CFPB). The CFPB brochure adds that you must be prepared to pay it "by refinancing it with the lender, getting a loan from another lender, or some other means."
Federal bank regulators call the result "payment shock." Their 2014 interagency guidance says that at the end of draw "the outstanding principal is either due immediately in a balloon payment or is repaid over the remaining loan term through higher monthly payments, resulting in payment shock."
| Lender | Draw period | Repayment period | Source, checked October 26, 2026 |
|---|---|---|---|
| Bank of America | "typically 10 years" | "typically 20 years" | Bank of America HELOC explainer |
| Axos Bank | 10 years, interest-only payments required | 10 years | Axos HELOC disclosures |
| Navy Federal Credit Union | 20 years | 20 years | Navy Federal HELOC page |
Your own dates are in your HELOC agreement and on your statements. Check whether your plan amortizes, has a balloon, or allows a renewal.
How much will your HELOC payment go up?
Payment in repayment = P × r ÷ (1 − (1 + r)^−n), where P is the balance at end of draw, r is the annual rate ÷ 12, and n is the number of repayment months. The interest-only payment during draw is P × r.
Illustration: a $40,000 balance at a hypothetical 8.00% rate
This is an illustration, not an offer. It assumes a balance of $40,000 at the end of draw and a variable rate that stays at 8.00% for the whole term. A real HELOC rate usually moves with an index such as the prime rate, so every payment below could change. Payments exclude property taxes and homeowners insurance.
| Phase | Months | Monthly payment | Change from interest only |
|---|---|---|---|
| Draw period, interest only | 120 | $266.67 | |
| Repayment over 20 years | 240 | $334.58 | +$67.91 (25.5%) |
| Repayment over 15 years | 180 | $382.26 | +$115.59 (43.3%) |
| Repayment over 10 years | 120 | $485.31 | +$218.64 (82.0%) |
Every payment in each schedule, stated in full:
- 10-year draw, 20-year repayment: 120 payments of $266.67, then 240 payments of $334.58. Total paid $112,299.60, of which $72,299.60 is interest.
- 10-year draw, 15-year repayment: 120 payments of $266.67, then 180 payments of $382.26. Total paid $100,807.20, of which $60,807.20 is interest.
- 10-year draw, 10-year repayment: 120 payments of $266.67, then 120 payments of $485.31. Total paid $90,237.60, of which $50,237.60 is interest.
The final payment of each schedule may differ by a few cents because of rounding. The longer repayment period cuts the monthly jump but adds interest: the 20-year schedule costs $22,062.00 more than the 10-year one, and the 15-year schedule $10,569.60 more, in this illustration. All three assume the rate never changes, which a variable-rate HELOC does not promise.
If the rate had risen to 10.00% by the end of draw, the same $40,000 would be 120 interest-only payments of $266.67 followed by 240 payments of $386.01 over 20 years, or 120 payments of $528.60 over 10 years (taxes and insurance not included). The CFPB booklet makes the same point with its own example: interest-only payments on $10,000 are $83 at 10% and $125 at 15%.
Find your number now. Take the balance on your latest statement, the current rate, and the repayment term in your agreement, and run the formula above, or ask the lender for the projected first repayment-period payment. Do it at least six months before the end-of-draw date.
What are your options before the draw period ends?
1. Pay down principal while you still can. Every dollar repaid before the switch lowers the new payment. In the illustration, paying the balance down to $30,000 cuts the 10-year repayment payment from $485.31 to $363.98 at the same hypothetical 8.00% rate: after the interest-only draw period, 120 payments of $363.98 instead of 120 of $485.31, excluding taxes and insurance.
2. Lock part of the balance at a fixed rate. Some lenders let you convert a portion to a fixed rate during the draw period. Bank of America offers to "convert $5,000 or more of your balance to a fixed rate"; U.S. Bank lets you "lock in a fixed interest rate for up to 20 years on some or all the money you borrow during your draw period," with a maximum of three active fixed-rate options. The CFPB says the fixed rate "is usually higher than the variable rate but is also more predictable," and that some lenders charge a conversion fee. A lock removes rate risk; it does not by itself lower the payment.
3. Refinance the balance. Options include a new HELOC (a new draw period, but new closing costs and possibly an early-closure fee on the old line), a fixed-rate home equity loan, or a cash-out refinance of the first mortgage. Each one is still secured by your home. Compare them in home equity loan vs HELOC and HELOC vs cash-out refinance, and price the fees with HELOC closing costs and fees.
4. Ask your lender about an extension or modification. The 2014 interagency guidance from federal bank and credit union regulators is supervisory guidance for lenders, not a right you can enforce. It lists lender responses including "short-term extensions, temporary modifications, permanent modifications, and renewals into new draw periods or longer-term amortization." It also notes that lenders often find successful outreach starts "at least six to nine months or more before end-of-draw dates." Nothing requires a lender to offer these, but you can ask.
5. Sell or downsize. A sale normally pays off both the first mortgage and the HELOC from the proceeds, so check that the price covers both loans and selling costs. If the new payment is not sustainable and you planned to move, selling before the jump avoids it.
The line can also shrink before the end. Regulation Z (12 CFR 1026.40) lets a lender stop new draws or reduce the limit while the home's value "declines significantly below the dwelling's appraised value," or while it "reasonably believes" you cannot repay "because of a material change" in your finances. If you were counting on drawing more before the end date, have a backup.
What if you cannot afford the repayment payment?
Call the lender before you miss a payment and ask what it offers; the interagency guidance says institutions that offer modifications should provide information that explains "the basic options available, general eligibility criteria, and the process for requesting a modification." A HUD-approved housing counselor can help you prepare; the CFPB lists them at consumerfinance.gov/find-a-housing-counselor. What happens after missed payments, including when lenders can freeze a line and how foreclosure works, is covered in can you lose your home with a HELOC.
Common questions
What happens when my HELOC draw period ends?
You can no longer borrow, and you start repaying principal, usually over 10 to 20 years. Some plans instead require the whole balance at once as a balloon payment.
How much will my HELOC payment increase?
It depends on your balance, rate and repayment term. In our illustration, $40,000 at a hypothetical 8.00% rate held constant goes from 120 interest-only payments of $266.67 to 240 payments of $334.58 over 20 years or 120 payments of $485.31 over 10 years. A variable rate can change these figures, and they exclude taxes and insurance.
Can I extend my HELOC draw period?
Some lenders offer renewals into a new draw period or other modifications. Federal guidance lists them as options, but lenders are not required to offer them. Ask yours well before the end date.
Can I refinance a HELOC at the end of the draw period?
Yes, if you qualify: into a new HELOC, a fixed-rate home equity loan, or a cash-out refinance. Each has closing costs and is secured by your home.
Can I lose my home if I cannot pay after the draw period?
Yes. The CFPB says that if you cannot pay a balloon payment, "you could lose your home," and the same risk applies to any missed HELOC payments.
Sources
- Consumer Financial Protection Bureau, "What is a home equity line of credit (HELOC)?", last reviewed August 28, 2026, accessed October 26, 2026.
- Consumer Financial Protection Bureau, "What you should know about Home Equity Lines of Credit (HELOC)" brochure, last updated August 2022, accessed October 26, 2026.
- Consumer Financial Protection Bureau, "What you should know about home equity lines of credit" (booklet), accessed October 26, 2026.
- Consumer Financial Protection Bureau, "What fees can my lender charge if I take out a HELOC?", accessed October 26, 2026.
- Board of Governors of the Federal Reserve System and other agencies, "Interagency Guidance on Home Equity Lines of Credit Nearing Their End-of-Draw Periods", July 1, 2014, accessed October 26, 2026.
- 12 CFR 1026.40, Requirements for home equity plans (Regulation Z), via eCFR, accessed October 26, 2026.
- Bank of America, "What is a home equity line of credit (HELOC)?", accessed October 26, 2026.
- U.S. Bank, "Home Equity Line of Credit (HELOC)", accessed October 26, 2026.
- Axos Bank, "HELOC Disclosures and Assumptions", accessed October 26, 2026.
- Navy Federal Credit Union, "Home Equity Line of Credit (HELOC)", accessed October 26, 2026.
- Consumer Financial Protection Bureau, “What you should know about Home Equity Lines of Credit (HELOC) (brochure, last updated 08/22)”
- Consumer Financial Protection Bureau, “What you should know about home equity lines of credit (booklet)”
- Board of Governors of the Federal Reserve System, “Interagency Guidance on Home Equity Lines of Credit Nearing Their End-of-Draw Periods (July 1, 2014)”
Loans Generator is not a lender or mortgage broker and does not make credit decisions. A HELOC is secured by your home; if you cannot repay it, you could lose your home. Payment figures on this page are illustrations at a hypothetical rate, exclude taxes and insurance, and are not offers. Terms quoted here were checked on October 26, 2026 and change without notice. Availability and terms vary by lender and by state. This page is general information, not legal, tax or financial advice.